SOURCE: El Paso Pipeline Partners

El Paso Pipeline Partners

December 10, 2009 07:15 ET

El Paso Pipeline Partners Expects Continued Growth for 2010

HOUSTON, TX--(Marketwire - December 10, 2009) - El Paso Pipeline Partners (NYSE: EPB) today announced its financial and operational outlook for 2010.

"We are pleased with the performance of our partnership, which has been delivering growth both through organic projects and though acquisitions," said Jim Yardley, president and chief executive officer of El Paso Pipeline Partners. "Since the partnership's initial public offering in 2007 we have placed in-service seven organic growth projects and completed nearly $1 billion in acquisitions. In turn, we have delivered consistent growth in quarterly distributions for our unitholders. The committed backlog of organic projects and our confidence in making future successful acquisitions provide a solid platform for continued growth."

El Paso Pipeline Partners is targeting 2010 distributable cash flow of $240 million to $250 million. Total capital expenditures are expected to be $210 million to $240 million, including $175 million to $200 million of expansion capital. A significant amount of the construction and materials price risk of these projects has been mitigated. Maintenance capital is expected to be $35 million to $40 million.

The partnership expects to deliver its remaining construction backlog of expansion projects on time and on budget.

El Paso Pipeline Partners will include a discussion of its 2010 plan at the end of El Paso Corporation's annual investor and analyst meeting, today, December 10, 2009. The webcast begins at 8 a.m. Eastern Time, 7 a.m. Central Time, and the El Paso Pipeline Partners discussion is expected to begin at 11:30 a.m. EST. The webcast may be accessed online through El Paso Pipeline Partners' Web site at www.eppipelinepartners.com in the Investors section. During the webcast, management will refer to slides that will be posted on El Paso Pipeline Partners' Web site. The slides will be available one hour before the webcast and can be accessed in the Investors section.

A replay of the webcast will be available online through El Paso Pipeline Partners' Web site in the Investors section.

El Paso Pipeline Partners, L.P. is a Delaware limited partnership formed by El Paso Corporation to own and operate natural gas transportation pipelines and storage assets. El Paso Corporation owns a 65 percent limited partner interest and a 2 percent general partner interest in the partnership. El Paso Pipeline Partners, L.P. owns Wyoming Interstate Company, an interstate pipeline system serving the Rocky Mountain region, a 58 percent interest in Colorado Interstate Gas Company which operates in the Rocky Mountain region, and a 25 percent interest in Southern Natural Gas Company, which operates in the southeastern region of the United States. For more information about El Paso Pipeline Partners, visit www.eppipelinepartners.com.

Disclosure of Non-GAAP Financial Measures

The SEC's Regulation G applies to any public disclosure or release of material information that includes a non-GAAP financial measure. In the event of such a disclosure or release, Regulation G requires (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. We use the non-GAAP financial measure Distributable Cash Flow as it provides important information relating our financial operating performance to our cash distribution capability. Additionally, we use Distributable Cash Flow in setting forward expectations and in communications with our board of directors of our general partner. We define Distributable Cash Flow as Adjusted EBITDA less cash interest expense, maintenance capital expenditures, and other income and expenses, net, which primarily includes a non-cash allowance for equity funds used during construction and other non-cash items. We use EBIT as a measure to assess the operating results and effectiveness of our business, which consists of consolidated operations as well as investments in unconsolidated affiliates. We define the non-GAAP financial measure EBIT as net income adjusted for interest and debt expense, net of interest income, and net income attributable to non-controlling interests so that investors may evaluate our operating results without regard to our financing methods or capital structure. We believe EBIT is useful to our investors as it provides them with the same measure used by El Paso to evaluate our performance. Adjusted EBITDA, which is also a non-GAAP financial measure, is defined as net income plus, (i) depreciation and amortization expense, (ii) interest and debt expense, net of interest income, (iii) the partnership's share of distributions declared by unconsolidated affiliates for the applicable period, (iv) net income attributable to non-controlling interests, less (i) affiliated interest income, net of affiliated interest expense, (ii) earnings from unconsolidated affiliates, and (iii) CIG's declared distributions to El Paso Corporation. We believe that the non-GAAP financial measures described above are also useful to investors because these measurements are used by many companies in the industry as a measurement of operating and financial performance and are commonly employed by financial analysts and others to evaluate the operating and financial performance of the partnership and to compare the operating and financial performance of the partnership with the performance of other publicly traded partnerships within the industry. Distributable Cash Flow, EBIT and Adjusted EBITDA should not be considered an alternative to net income, earnings per unit, operating income, cash flow from operating activities or any other measure of financial performance presented in accordance with GAAP. These non-GAAP measures both exclude some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, Distributable Cash Flow, EBIT and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, these non-GAAP measures should not be viewed as indicative of the actual amount of cash that we have available for distributions or that we plan to distribute for a given period, nor does it equate to available cash as defined in our partnership agreement.

                                                        Twelve Months
Non-GAAP Reconciliation Schedule                           Ending
($ Millions)                                          December 31, 2010
-----------------------------------------------------------------------

Net income                                               $300 - $310

Net income attributable to noncontrolling interests        65 - 70

Net income attributable to El Paso Pipeline
 Partners, L.P.                                           230 - 240

Add:  Interest and debt expense, net                       85 - 90
                                                      -----------------
EBIT                                                     $315 - $325

Add:  Depreciation and amortization                        70 - 75

Distributions declared by unconsolidated affiliate         50 - 55

Net income attributable to noncontrolling interests        65 - 70

Less:  Equity earnings from unconsolidated affiliates      60 - 65

CIG declared distributions to El Paso Corporation          60 - 65
                                                      -----------------
Adjusted EBITDA                                          $385 - $395

Less:  Cash interest expense, net                          85 - 90

Maintenance capital expenditures                           35 - 40

Other, net                                                 15 - 20
                                                      -----------------
Distributable cash flow                                  $240 - $250
                                                      -----------------


Cautionary Statement Regarding Forward-Looking Statements

This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. El Paso Pipeline Partners has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including, without limitation, the ability to obtain necessary governmental approvals for proposed pipeline projects and to successfully construct such projects on a timely basis and within estimated costs; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; the ability to meet our 2010 projections s described in this release, the risks associated with contracting and recontracting of transportation commitments; regulatory uncertainties associated with pipeline rate cases; actions taken by customers, third-party operators, processors and transporters; conditions in geographic regions or markets served by El Paso Pipeline Partners and its affiliates and equity investees or where its operations and affiliates are located; the effects of existing and future laws and governmental regulations; competitive conditions in our industry; changes in the availability and cost of capital; and other factors described in El Paso Pipeline Partners' (and its affiliates') Securities and Exchange Commission filings. While these statements and projections are made in good faith, El Paso Pipeline Partners and its management cannot guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. El Paso Pipeline Partners assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made, whether as a result of new information, future events, or otherwise.

Contact Information


  • Contacts:

    El Paso Pipeline Partners
    Investor-Media Relations
    Bruce L. Connery
    Vice President
    Office: (713) 420-5855

    Media Relations
    Bill Baerg
    Manager
    Office: (713) 420-2906