BWP - Earnings call transcript Q1 2018 | Boardwalk Pipeline Partners L.P.

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Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2018 Boardwalk Pipeline Partners, LP Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] I would now like to turn the call over to Molly Ladd, Director of Investor Relations and Corporate Communications. Please go ahead.

Molly Whitaker

[ph]. Ella you, Thank and Boardwalk the Pipeline everyone, earnings quarter call for Partners. welcome morning, first to XXXX Good I'm pleased to be joined today by Mr. President Stan our and Mr. and Horton, CEO; Jamie Buskill, our CFO.

with of If website our earnings a would www.bwpmlp.com. please copy you release it like at associated this from call, download the

that are statements call and in materially information for to that update differ by during for matters range to set obligation Company wide to of prepared a to forth to using call. during any I would our beliefs not to our Statements this this achieved forward-looking in of expressly historical may statement will SEC the certain available statements. are use over in regard you are and also conference due cash including that the from facts The those These related like and such morning, or currently comparable With non-GAAP please statement We'd EBITDA and management's today, such release are this results we forward-looking distributable Company like nature. turn flow. may are that documents. to measures, risks the GAAP we measures. call those financial financial expectations. projected Actual earnings made Following our that any based questions. revise disclaims remind earnings measures, refer discuss as most in will to on reconciliation statements uncertainties, forward-looking the this forward-looking assumptions call remarks call any your this remind you include

the turn would Horton. like Now call over to to I Stan

Stanley Horton

hope the release good this we press to the and opportunity had Molly, you've you, morning, issued morning. everyone. I Thank review

of going a provide summary to quarterly addition will distribution first I'm and a commercial unit per of quarter we update. or financial provide results a update $X.XX a annualized. our Jamie financial announced $X.XX and to earnings, In reporting

serve demand compressor of to earnings Since Texas headway projects support the Coast, construction number next that XX% years. the have call, Louisiana Gulf over a Freeport region growth news LNG facilities a have U.S. Phase and the project. growth markets of the X that last we on than station will We significant made underway of of our the few along more represents

We service advancing on system. the also compressor other one have Gulf station on is legacy Gulf We in compressor made began anticipated and second which on XXXX. the be are these be It progress construction and of Station the on on fourth construction of on of phase stations the pipeline quarter pipeline. ready the final largest our facilities two Wilson South the legacy Compressor will for the will stations South compressor

project this obligations of The facility the in the quarter quarter of the One to to contractual of our approximately the expected long-term stations XXXX consistent with placed the of service is with feet service to in XXXX. shippers the be be in million our fourth interim a commence to contracts XXX cubic in of and associated second placed is the train until second second day. capacity provide the to transportation anticipated other quarter in phase is the service XXXX

capacity a a X, XXXX cubic day. was a XXX day, first approximately in feet The phase billion into placed service of the feet million X.X making which February cubic capacity also project has total

and be the on-time We project below expect to budget.

in in $XXX on announced serve represent three Gulf and plants; We growth in approximately power which one have Texas, Louisiana capital. new previously South to million projects two

of into new and power service project expect Construction and customer be quarter compressor first service will we of XXXX. of The a will transportation MMBtu pipeline Louisiana. the underway fourth station project provide firm approximately new placed our the XXX,XXX are in in the to

February, The in received We of the expecting approximately towards the the in Louisiana South assessment the environmental provide end of commence late this approval project construction year anticipate second MMBtu from are also in service XXXX and lateral day FERC firm a project service. transportation We quarter quarter. approvals. project targeted station and XXX,XXX customer of date will the third will FERC of third the the compressor and a to has second subject of quarter at of the end this

plant The in MMBtu transportation a day firm proposed new third a will of also to Texas. provide XXX,XXX project service power

customary certificate We to of FERC targeted second and expect mid-XXXX, for quarter again project application service is with the late the in this the to end approvals. file subject the date

the to the recently are to We Baton completed in serve storage two area. support service first Midstream's projects service brine transportation the Rouge and ethylene brine Boardwalk supply construction growth at customers Choctaw Louisiana of Louisiana. drilling South We planned in progress with wells our production that our Hub continuing project including to

have We have the that expands treating the Evangeline project capacity pipeline begun pump civil system. the and on service, we begun gas of engineering ethylene and work to our station of provide

capital to these the for projects XXXX. in growth Boardwalk Midstream Louisiana our petrochemical provide dates in total Now opportunities represent through in service approximately industry operations. have and $XXX million Growth of Louisiana continues

continue We And project, to encouraged our producers. are Katy discussion to our the a Sempra. development or we joint project with Permian market PXK by with

expansion potential of the in XX-year XXXX those also our service for are projects discussions replacing timeframe with the ongoing the and existing XXXX customers available that contract to in as expire. capacity We

bill Greenville steps to on Texas and remarketing are We positive take capacity towards laterals. continuing Gas

contracts capacity a on XXXX executed diligently contracts transportation potential existing a XXXX. contracts production XXXX of of reduced On when And During increased area. existing that there working quarter South and maturity certain recently the customer demand an the laterals. Gulf with market Crossing, expire XX, capacity those customers in from contracts extends October the we and series first seeing contracted with through services we of increased the to to are is related Gulf Haynesville at for

sector. with numbers policy include updated new MLP issued these service the FERC an to an mostly transportation On service shortly. XXXX, statement income Energy Regulatory We and agreement intermediate FERC Federal taxes actions allowance recover longer revised that the contracts, and affected of terms. March took to for our going The the Boardwalk firm service. is cost shorter have cost MLP will that entered backlog XX, MLPs, policy, to held treatment Commission Jamie no tax income a into provide long and of permit reversing of their on pipeline entire it's new

policy and FERC filed to XX, handle the this NOPR associated or Now whether of pipelines our We the revised jurisdictional and near their the result addressing how income to a as XXXX. that rate statement. reduction of issued should in term recent The we're that parties also issued hearing tax. FERC notice enquiry will future. plan We making comments are allow service filed proposing the changes a accumulated and over-collecting on file clarification in reduction a revised the in request cost comments corporate of number process corporate income for on tax The maybe rule the whether to a what of NOPR; it the are of proposed statement. taxes a proceeding April policy deferred the FERC notice have the of with in

the a continuing notice revenues assessment enquiry NOPR are not impact near-term. to and our in of preliminary upon we based to material review the do on revised expect While statement, our policy have we the the them

we moratorium of and rate transmission currently majority the unaffected agreements discounted believe pipeline not Texas contracts Gulf firm policy are will [ph] on South place which it's XXXX by FERC's or FERC ordinarily Crossing All customers the which a pipeline has negotiated by Gulf actions. these with of rate be the are on contracts The affected Gas revisions. in until

However, statement, effects we a and of Tax the publicly are including revised master-limited is Boardwalk. policy appropriate the & of factors Jobs structure evaluating of whether given Acts the traded, partnership a number for the XXXX Cuts remaining

our of near-term preceding the FERC's actions, allow could right to able future impact equal our addition, would our partner units would on LP the our in the the consecutive exercise The the able of prices general effect rates agreement. price our to XXX view of be These applicable terms outstanding of general partner on exercise at a the under to three days general partner average closing right. regarding the give the in partnership we for our revenues day In trading may days being call it's purchase daily result limited actions call for terms charge it's the formula recent to the the despite partnership when our FERC's units the of notice price. maximum the formula prior of potential

that been in would today. Now our by our SEC further an has amended [ph] Loews right in be and form and in XX-Q has filed disclosed and filings XXD discussed is since this IPO our existed

is purchase right and Loews Loews the informed Boardwalk exercise partnership recent the analyzing has is actions FERC's the right that under to us any Now not it's considering a decision it agreement. decision, decision. a seriously

Now we filings in process making decision. given disclosures rely the to relevant timing need are are process, of this any to SEC the on and decision we the questions and such or answer the concerning where unable possible

Now to for over I financial will Jamie turn the call the update.

Jamie Buskill

standard impact on year morning, Thank X revenue a of new which on material you, We revenues. good January implemented our net and not Stan this recognition the did everyone. have reported

to of and first storage XXXX. XXX decrease expenses first X% transported first of liquids of million, quarter million million TBtu For This $XXX of and conditions TBtu contract barrels natural XX XXXX restructuring XXXX. Southwestern the in or services. due a barrels and gas was million approximately revenues park net decrease our with quarter, we in of compared fuel XXX of of and associated the and XX quarter We transportation lending $XX and the approximately market the unfavorable primarily reported of from quarter with

of $XXX XX% compared income quarter and in of of expenses increased quarter, timing the increase reflect million from for Net the quarter capital was the base the $XXX of for $XXX expenses maintenance million income, Excluding the or period revenue. invested recently in last of of fuel from an of which due and spending in We first $XX operating first million the decrease projects. $X generated $XXX the EBITDA reported million X%. million capital. The for quarter quarter growth asset an $XX a the and cash comprised $XX We distributable comparable first million $XXX Net was distributable generated million and million, completed $XXX to growth or our flow decrease million, XXXX. increase was transportation we $XX quarter maintenance decrease capital of EBITDA, million primarily in $XX flow operating and XXXX. cash million in for year. million a a or was and depreciation, of from from X%

We capital. forecasting under are growth maintenance of the $XX our approximately capital expenditures cash, ended we capital agreement borrowing of quarter credit million billion million facility. of with XXXX, the and of capacity billion $XXX of debt over For $X.X full total revolving our million and $XXX capacity million $XXX million, subordinated $XXX $X.X of

expect Our however, on fee our adding to debt to of X.Xx. of presentation was the standard year $XX we've end earn represents ratio the our to fee of we under quarter, requirement provided to in fixed the revenues XXXX material revised contract first to revenues did to EBITDA adjusted the a not presentation. executed agreement million impact some term under billion. disclosure are changes include fixed fee end confirm overall fee on disclosure the new at Under agreement; $X.XX have perform changes standard. new the of our recognition an are revenue the to new first revenues fixed for from based of billion. at with all remaining during adding related accounting amount fixed $X.XX quarter over signed This biggest the The revenues services the contract revenues, the of spread the making The increase the we

of XXXX we year-end have XXXX, would fee an to are we Fixed are to revenues reported after $X.XX from contracts $XXX we billion of approximately end. fee fixed million earn increase from approximately the until $X.X comparable year amount earn increase expect expect the an the million of revenues $XX representing billion, end amount For adjusted at million. $XXX

XX-Q. during years $X.X years So fixed the in I the this which in signed our in takes contract the agreements quarter to $XXX review total summary, full for approximately revenues we to revenues for first under fixed item added fee all billion. recommend related quarter million all you disclosure fee first for

review So in closing, we covered new XX-Q you a this and information morning. our of that suggest lot we filed strongly

operator relevant to making where rely As the timing SEC a will call process answer concludes in questions remarks. such filings Loews exercise turn are to reminder, We giving on concerning need disclosures the we my or That call questions. of and possible right. decisions. to the the process over it's the the now potentially regarding in I unable decision the of for are

Operator

from [Operator Instructions] with Our first Jeremy JPMorgan. question is Tonet

Your line now open. is

Jeremy Tonet

GCX What I back been differentials basis going starting of come competitors guess, indicate I in the guess like and -- holding need saying to commitments to seems I where a [ph] for want or certainly PXK kind line what have and is finish giving there because such point wondering to the Permian see. up what pipeline, there trying off, potentially takeaway? project, if some the kind the they like you or market guys obstacles futures -- it WAHA as this in about you to PXK update online, is Kinder was of out enough talking for getting [ph], get been been have you've another just those it demand the bringing need more commitment-wise. at time you seems us a for sufficient bit on -- it's are this do see I to could the

Stanley Horton

second pipeline I'll but service can't not right that with been to who color as I of part Kinder [ph] having more knows, pipeline. the you had that -- a for But and gas is the for constraints project ready our and end need ease quarter may service being my right and is liquids I contract. there latter third to out near-term We And on remarks, product some now it together were that that producers the I basis. little quarter even before we've and before a they have producers the a is and it's new are so I've to to pipeline got a out much; I think in working the right bit second you people be infrastructure I discussions will the that's going The not in into third thought now being too, need would which said commit it's there, try ready lot to good producers. I are time, of project, it's is of there of feel that produced to believe be coming a flows. of think think the there what the is time there crude is a be in the commit of producers producers to in to put going they or a that just think be produced a it's XXXX we there give give there telling

color now. So right them, we're I about the can that but with optimistic only that's give you we're working

Jeremy Tonet

with threshold their Loews thanks. just see buy-in their ownership helpful, decision I we of but to affect you're understand, pass-through outstanding of the a need That's a been if From impacted. XX% regards benefits about they to process the adversely to purposes that the making materially unable drops for level. want appreciate talk that to units they buy-in only has to tax believe to with over the XX% what affect ability to own entity or the

just right? So that guess, kind is what's at FERC that notice here; I the I I'm am this driver point, here driving of understanding this -- -- this wondering discussion that's

Stanley Horton

that's in refer that. I a me XX-Q of to to do could discussion interest detailed of all XX-Q don't you very the and in is there detailed The I'm and for read think anyone's refer our so time, that. for the discussion clear you now to a to I XX-Q I thing just of that review only this XX-Q and is going good the right you best think of let

Operator

question Levine next from Citi. Ryan Our with is

is line now Your open.

Ryan Levine

Texas What Gas portion us of has cost service today?

Stanley Horton

mean, Well, that not a cost covers I but pipeline -- understand sure of of is a service so… your all there Gas. of cost I'm question service, Texas so I every has

Ryan Levine

portion what you impact. just change impact; of remarks FERC to to all prepared be the that I'm percentage Gas that the get not exact a my trying to FERC policy would the indicated your In subject Texas colors

Stanley Horton

have rates; your that's our understand I maximum question. your I what question. Since cost rates are contracts at of rates, think think rate and level service and storage discounted I we negotiated of

that's to not so know, it anyone, You something material needless that to to expect have taken call say, don't we disclosed that on effect I'm we revenue. into disclose impact that not but going on the near-term was said we when any

Ryan Levine

days XXX-day starts the decides general regarding [indiscernible] that And partner three provision; the so to rate. Okay. the then rate whack call before call

to to So notice rate? you're has potentially is formal going that the a that could or comment the trigger that there be that making call here, is public exercise they're

Stanley Horton

I refer you again, those Again again, answer as out repetitive, XX-Q. in detailed would answers think to seeking there I time and questions Form that is XX-Q the thought you're of can't questions but about of don't are think and those will all want we and point said, in to that -- in Form this I well XX-Q most very but be our a Jamie disclosure at I and them answer both the I

Ryan Levine

the And the is the [indiscernible]? Loews then to [ph] financing that's provide of some regarding develop to fund type us the on it on intended update any the the could synthetic something the drops, current mechanism? have you do and intent table project Is option or there to is PXK, through

Jamie Buskill

as I we look can't at have at did point our I to all we're options. going project; the speculate haven't this obviously

be time. to backlog our have just and a the is at lot on, Right decide what's going announced a a working best before, the what we growth to of capital this lot I look feel we As on at that like I've we'll time. of invested now going in to are where we've depend available year; are backlog just lots projects said our then options with is that point to it. financing at But so and have other

Ryan Levine

the lateral [ph] there portion port-off last expense of one new of any in lateral? of question; your could for terms to guidance. the around their And potential partners in included [ph] that color then Is PCGT already in has Indiana, provide the I that Texas Gas guess you

Jamie Buskill

projects frankly, can't. don't we to been have customer always the our No, to and ready we mean okay. quite discuss; -- signed, I has really it's project tells that discuss and don't relationship we a I policy sealed until customer and us delivered in the until usually

just the time, point for So has speak at let what this customer I'll the in itself. filed with PSE

Operator

is Dennis Our next Bank America. from question Coleman with of

is open. line Your now

Dennis Coleman

wonder the -- of option don't Do you go their you to I know just want that you I on [ph] about Loews talked them we take a is but to the this for on position, you questions or answers? expect call or -- it bit terms little address in there suggesting that. Loews are

Stanley Horton

any answer this can't now. those we would that not questions said, just stick on statements a decision in I decision; was a to that. Boardwalk my I so I As prepared right said Loews remarks a did and

Dennis Coleman

wonder the on discounted, that bit projected numbers that correct? is more you revenue are uptick; those they Jamie, -- gross numbers, I not a little just those are gave

Jamie Buskill

The numbers what in current the under contract have and rates I under -- we today gave are effect.

rate those of of rates current mentioned, As being under in it's the discounted effect lot this agreements negotiated time. at but Stan a agreements are

Dennis Coleman

those just not it's are… trying I'm -- it's MTB -- an number, But to Right.

Jamie Buskill

like straight there not No, it's not, -- revenue, that. anything not discounted is or just it's it's

Dennis Coleman

an think of bigger said over you -- bit less in added about years million about obviously than beyond and -- the XXXX think basis can said in something sort and a that; little I number how we know $XXX you XXXX annual is million can that? you've I XX anything XXXX you $XX contracts, on say

Jamie Buskill

are you related a number contracts bigger think power here. storage into. couple the way we a probably about it look number that new bigger of are at and of -- mentioned Stan storage by things agreements announced that half if we then those And the under of I some XXXX out Well, on mentioned; the had new XXXX, numbers driven think that Stan more Fayetteville, XX-year those entered extended -- the in and even agreement. signed we out you drivers that years The in plant February are that in is also of we

Stanley Horton

system. the forget these cubic our represented sometimes that, that that mean to people three think billion incremental more start than load talked X.X that alone loads like about power power -- we I on talking things feet loads of when I South and new I just Gulf

when amount we contract that of within recontracting look a the and Company, to our of So load. talking capacity we that's everything we at about significant do contracts start

Operator

And no any like for questions. now I'm would further Ladd showing turn to to call further back I the remarks. Molly

Molly Whitaker

like we'd Once and joining Boardwalk this continued you morning to for us Partners. interest again, your thank in for Pipeline

replay call of a this available and As at a Thank website great you concludes reminder, an This conference www.bwpmlp.com. day. is at online have call. today's our

Operator

participating conference. Ladies and gentlemen, today's for thank in you

now may Everyone disconnect. You have day. a great

Boardwalk Pipeline Partners (BWP) 30 Apr 182018 Q1 Earnings call transcript