Boardwalk Pipeline Partners Earnings Call INSIGHTS: Distribution Growth Policy, G&A Decrease
On Monday, Boardwalk Pipeline Partners LP (NYSE:BWP) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Distribution Growth Policy
Paul Jacob – Raymond James: Real quick just to touch on the distribution growth policy. Do you think it’d be fair to say that it might make some sense to postpone that until after the Class B units convert in 2013?
Jamie L. Buskill – CFO, SVP and Treasurer: I’m not sure, Paul, of your question. Postpone – what are you asking to postpone?
Paul Jacob – Raymond James: The distribution growth. I mean you’re keeping that distribution flat Q-over-Q and I’m just kind wondering if I could get some – a little bit of insight whether or not you might postpone growing that distribution out through 2013?
Jamie L. Buskill – CFO, SVP and Treasurer: Well, I’ll just point back to what Stan mentioned on how we determine the distribution. I think he laid that out fairly well as to how we look at that. As far as to – so I don’t really think that as a relation to the Class B question that you’re asking.
Paul Jacob – Raymond James: Then touching real quick on the P&L segment, given the contango curve for natural gas, how do you see that shaping out in the back half of the year? I mean, this Q was pretty good relative to what we were thinking and definitely a big step change over 1Q. Do you think that continues or you think that’s going to taper off into 3Q and 4Q?
Stanley C. Horton – President and CEO: I think the forward curve is a pretty good indication about what we think is going to happen over time. That said, it’s probably the best answer right there.
Paul Jacob – Raymond James: Then last question from me on maintenance CapEx. How do you see that shaping out for last two quarters?
Jamie L. Buskill – CFO, SVP and Treasurer: Well, we spent approximately I believe $37 million or so on maintenance capital through the first half and for the year we’re anticipating a total spend of approximately $91 million.
John Edwards – Credit Suisse: Jamie, what was behind the G&A decrease?
Jamie L. Buskill – CFO, SVP and Treasurer: It’s something John that we’ve been focused on over the last year or so trying to reduce our G&A cost mainly dealing with outside type services.
John Edwards – Credit Suisse: So, contractors and consultants and so on?
Jamie L. Buskill – CFO, SVP and Treasurer: Right.
John Edwards – Credit Suisse: Okay. Just, maybe I guess this relates to Stan’s comments earlier regarding contract renewals. I think you indicated that there is going to be about $100 million in annual renewals and you were flat this year relative to 2011. Are you expecting that to change going forward, then also if you could also give us the volumetric data, the throughput data?
Jamie L. Buskill – CFO, SVP and Treasurer: Let me look at the first six months and if you look at the revenues there John, we’re up $34 million for the first six months on net revenues. Roughly $24 million of that is HP Storage and about $4 million is Petal, that’s $28 million of the $34 million. The other $6 million is the slight increase in our revenues, mainly transportation revenues. So, you can see that our contract renewals to Stan’s point earlier have been relatively flat so far and you see that in the numbers. As far as your question on volumes, we moved in the quarter at about 621 TBtus year-to-date that puts us at 1,295 TBtus.
Louis Shamie – Zimmer Lucas: 621 TBtus year-to-date or was that for the quarter?
Jamie L. Buskill – CFO, SVP and Treasurer: 621 TBtus is for the quarter, year-to-date 1,295.
John Edwards – Credit Suisse: 1,295 TBtus for the quarter.