Note 13: Guarantee of Securities of Subsidiaries

Boardwalk Pipelines (subsidiary issuer) has issued securities which have been fully and unconditionally guaranteed by the Partnership (parent guarantor). The Partnership's subsidiaries have no significant restrictions on their ability to pay distributions or make loans to the Partnership except as noted in the debt covenants and have no restricted assets at June 30, 2013, and December 31, 2012. Note 9 contains additional information regarding the Partnership's debt and related covenants.

The Partnership 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 June 30, 2013

(Millions)



Assets	Parent Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Cash and cash equivalents	$	—	$	1.2	$	8.7	$	—		$	9.9
Receivables	—		2.4		99.3		(7.0		)	94.7
Gas and liquids stored underground	—		—		1.6		—			1.6
Prepayments	0.2		0.1		18.0		—			18.3
Other current assets	0.2		—		24.2		(9.7		)	14.7
Total current assets	0.4		3.7		151.8		(16.7		)	139.2
Investment in consolidated subsidiaries	1,412.4		6,012.3		—		(7,424.7		)	—
Property, plant and equipment, gross	0.6		—		8,522.0		—			8,522.6
Less–accumulated depreciation and amortization	0.6		—		1,345.3		—			1,345.9
Property, plant and equipment, net	—		—		7,176.7		—			7,176.7
Other noncurrent assets	—		4.3		500.3		1.4			506.0
Advances to affiliates – noncurrent	2,773.9		140.9		573.5		(3,488.3		)	—
Investment in unconsolidated affiliates	—		—		25.0		—			25.0
Total other assets	2,773.9		145.2		1,098.8		(3,486.9		)	531.0

Total Assets	$	4,186.7	$	6,161.2	$	8,427.3	$	(10,928.3	)	$	7,846.9



Liabilities and Equity	Parent Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Payables	$	0.3	$	—	$	48.3	$	—		$	48.6
Payable to affiliates	1.0		—		7.0		(7.0		)	1.0
Other current liabilities	0.3		22.0		135.0		(8.0		)	149.3
Total current liabilities	1.6		22.0		190.3		(15.0		)	198.9
Total long-term debt	—		1,379.4		1,878.9		—			3,258.3
Payable to affiliate	16.0		3,347.4		140.9		(3,488.3		)	16.0
Other noncurrent liabilities	—		—		184.6		(0.3		)	184.3
Total other liabilities and deferred credits	16.0		3,347.4		325.5		(3,488.6		)	200.3
Total partners’ capital/member’s equity	4,169.1		1,412.4		6,012.3		(7,424.7		)	4,169.1
Noncontrolling interest	—		—		20.3		—			20.3
Total Equity	4,169.1		1,412.4		6,032.6		(7,424.7		)	4,189.4
Total Liabilities and Equity	$	4,186.7	$	6,161.2	$	8,427.3	$	(10,928.3	)	$	7,846.9

Condensed Consolidating Balance Sheets as of December 31, 2012

(Millions)



Assets	Parent Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Cash and cash equivalents	$	0.1	$	1.0	$	2.8	$	—		$	3.9
Receivables	—		—		119.5		(7.3		)	112.2
Gas and liquids stored underground	—		—		10.8		—			10.8
Prepayments	—		—		15.2		—			15.2
Advances to affiliates	—		—		2.0		(2.0		)	—
Other current assets	0.4		—		18.1		(3.6		)	14.9
Total current assets	0.5		1.0		168.4		(12.9		)	157.0
Investment in consolidated subsidiaries	1,257.0		5,785.7		—		(7,042.7		)	—
Property, plant and equipment, gross	0.6		—		8,422.7		—			8,423.3
Less–accumulated depreciation and amortization	0.6		—		1,233.5		—			1,234.1
Property, plant and equipment, net	—		—		7,189.2		—			7,189.2
Other noncurrent assets	0.1		4.8		511.4		—			516.3
Advances to affiliates – noncurrent	2,638.5		84.4		582.6		(3,305.5		)	—
Total other assets	2,638.6		89.2		1,094.0		(3,305.5		)	516.3

Total Assets	$	3,896.1	$	5,875.9	$	8,451.6	$	(10,361.1	)	$	7,862.5



Liabilities & Equity	Parent Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Payables	$	0.1	$	—	$	96.2	$	(7.3	)	$	89.0
Payable to affiliates	2.7		2.0		—		(2.0		)	2.7
Other current liabilities	0.2		16.9		150.4		(3.4		)	164.1
Total current liabilities	3.0		18.9		246.6		(12.7		)	255.8
Total long-term debt	—		1,378.9		2,160.3		—			3,539.2
Payable to affiliate	16.0		3,221.1		84.4		(3,305.5		)	16.0
Other noncurrent liabilities	—		—		174.6		(0.2		)	174.4
Total other liabilities and deferred credits	16.0		3,221.1		259.0		(3,305.7		)	190.4
Total partners’ capital/member’s equity	3,877.1		1,257.0		5,785.7		(7,042.7		)	3,877.1
Noncontrolling interest	—		—		—		—			—
Total Equity	3,877.1		1,257.0		5,785.7		(7,042.7		)	3,877.1
Total Liabilities and Equity	$	3,896.1	$	5,875.9	$	8,451.6	$	(10,361.1	)	$	7,862.5

Condensed Consolidating Statements of Income for the Three Months Ended June 30, 2013

(Millions)



	Parent Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations				Consolidated Boardwalk Pipeline Partners, LP
Operating Revenues:
Transportation	$	—		$	—		$	264.6		$	(22.3	)		$	242.3
Parking and lending	—			—			7.1			—				7.1
Storage	—			—			27.4			—				27.4
Other	—			—			11.9			—				11.9
Total operating revenues	—			—			311.0			(22.3		)		288.7

Operating Cost and Expenses:
Fuel and transportation	—			—			49.7			(22.3		)		27.4
Operation and maintenance	—			0.3			43.5			—				43.8
Administrative and general	—			0.8			28.1			—				28.9
Other operating costs and expenses	0.1			0.1			77.3			—				77.5
Total operating costs and expenses	0.1			1.2			198.6			(22.3		)		177.6
Operating (loss) income	(0.1		)	(1.2		)	112.4			—				111.1

Other Deductions (Income):
Interest expense	—			18.0			22.7			—				40.7
Interest (income) expense, affiliate, net	(8.2		)	10.2			(2.0		)	—				—
Interest income	—			—			(0.1		)	—				(0.1		)
Equity in earnings of subsidiaries	(62.4		)	(91.8		)	—			154.2				—
Total other (income) deductions	(70.6		)	(63.6		)	20.6			154.2				40.6

Income before income taxes	70.5			62.4			91.8			(154.2		)		70.5
Income taxes	—			—			0.1			—			—	0.1

Net Income	70.5			62.4			91.7			(154.2		)		70.4
Net loss attributable to noncontrolling interests	—			—			(0.1		)	—				(0.1		)
Net income attributable to controlling interests	$	70.5		$	62.4		$	91.8		$	(154.2	)		$	70.5

Condensed Consolidating Statements of Income for the Three Months Ended June 30, 2012

(Millions)



	Parent Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Operating Revenues:
Transportation	$	—		$	—		$	266.6		$	(21.6	)	$	245.0
Parking and lending	—			—			7.8			—			7.8
Storage	—			—			19.0			(0.1		)	18.9
Other	—			—			4.1			—			4.1
Total operating revenues	—			—			297.5			(21.7		)	275.8

Operating Cost and Expenses:
Fuel and transportation	—			—			36.7			(21.7		)	15.0
Operation and maintenance	—			—			41.9			—			41.9
Administrative and general	(0.1		)	—			25.3			—			25.2
Other operating costs and expenses	0.1			—			85.1			—			85.2
Total operating costs and expenses	—			—			189.0			(21.7		)	167.3
Operating income	—			—			108.5			—			108.5

Other Deductions (Income):
Interest expense	—			15.8			25.7			—			41.5
Interest (income) expense, affiliate, net	(8.6		)	13.8			(3.2		)	—			2.0
Interest income	—			—			(0.1		)	—			(0.1		)
Equity in earnings of subsidiaries	(56.5		)	(86.1		)	—			142.6			—
Miscellaneous other income, net	—			—			(0.1		)	—			(0.1		)
Total other (income) deductions	(65.1		)	(56.5		)	22.3			142.6			43.3

Income before income taxes	65.1			56.5			86.2			(142.6		)	65.2
Income taxes	—			—			0.1			—			0.1

Net Income	$	65.1		$	56.5		$	86.1		$	(142.6	)	$	65.1

Condensed Consolidating Statements of Income for the Six Months Ended June 30, 2013

(Millions)



	Parent Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Operating Revenues:
Transportation	$	—		$	—		$	570.4		$	(44.0	)	$	526.4
Parking and lending	—			—			15.0			—			15.0
Storage	—			—			55.6			(0.1		)	55.5
Other	—			—			20.3			—			20.3
Total operating revenues	—			—			661.3			(44.1		)	617.2

Operating Cost and Expenses:
Fuel and transportation	—			—			94.2			(44.1		)	50.1
Operation and maintenance	—			0.3			83.7			—			84.0
Administrative and general	—			0.8			59.5			—			60.3
Other operating costs and expenses	0.1			0.1			169.8			—			170.0
Total operating costs and expenses	0.1			1.2			407.2			(44.1		)	364.4
Operating (loss) income	(0.1		)	(1.2		)	254.1			—			252.8

Other Deductions (Income):
Interest expense	—			35.2			46.0			—			81.2
Interest (income) expense, affiliate, net	(16.6		)	20.5			(3.9		)	—			—
Interest income	—			—			(0.3		)	—			(0.3		)
Equity in earnings of subsidiaries	(155.4		)	(212.3		)	—			367.7			—
Miscellaneous other income, net	—			—			(0.2		)	—			(0.2		)
Total other (income) deductions	(172.0		)	(156.6		)	41.6			367.7			80.7

Income before income taxes	171.9			155.4			212.5			(367.7		)	172.1
Income taxes	—			—			0.3			—			0.3

Net Income	171.9			155.4			212.2			(367.7		)	171.8
Net loss attributable to noncontrolling interests	—			—			(0.1		)	—			(0.1		)
Net income attributable to controlling interests	$	171.9		$	155.4		$	212.3		$	(367.7	)	$	171.9

Condensed Consolidating Statements of Income for the Six Months Ended June 30, 2012

(Millions)



	Parent Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Operating Revenues:
Transportation	$	—		$	—		$	575.9		$	(43.4	)	$	532.5
Parking and lending	—			—			11.8			—			11.8
Storage	—			—			38.8			(0.1		)	38.7
Other	—			—			5.7			—			5.7
Total operating revenues	—			—			632.2			(43.5		)	588.7

Operating Cost and Expenses:
Fuel and transportation	—			—			77.2			(43.5		)	33.7
Operation and maintenance	—			—			79.5			—			79.5
Administrative and general	(0.1		)	—			59.5			—			59.4
Other operating costs and expenses	0.1			—			173.9			—			174.0
Total operating costs and expenses	—			—			390.1			(43.5		)	346.6
Operating income	—			—			242.1			—			242.1

Other Deductions (Income):
Interest expense	—			31.7			48.8			—			80.5
Interest (income) expense, affiliate, net	(17.8		)	27.4			(5.6		)	—			4.0
Interest income	—			—			(0.2		)	—			(0.2		)
Equity in earnings of subsidiaries	(139.9		)	(199.0		)	—			338.9			—
Miscellaneous other income, net	—			—			(0.2		)	—			(0.2		)
Total other (income) deductions	(157.7		)	(139.9		)	42.8			338.9			84.1

Income before income taxes	157.7			139.9			199.3			(338.9		)	158.0
Income taxes	—			—			0.3			—			0.3

Net Income	$	157.7		$	139.9		$	199.0		$	(338.9	)	$	157.7

Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended June 30, 2013

(Millions)



	Parent Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Net Income	$	70.5		$	62.4		$	91.7		$	(154.2	)	$	70.4
Other comprehensive income (loss):
Gain (loss) on cash flow hedges	7.0			7.0			7.0			(14.0		)	7.0
Reclassification adjustment transferred to Net Income from ash flow hedges	1.0			0.4			0.6			(1.0		)	1.0
Pension and other postretirement benefit costs	(1.9		)	(1.9		)	(1.9		)	3.8			(1.9		)
Total Comprehensive Income	76.6			67.9			97.4			(165.4		)	76.5
Comprehensive loss attributable to noncontrolling interests	—			—			(0.1		)	—			(0.1		)
Comprehensive income attributable to controlling interests	$	76.6		$	67.9		$	97.5		$	(165.4	)	$	76.6

Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended June 30, 2012

(Millions)



	Parent Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Net Income	$	65.1		$	56.5		$	86.1		$	(142.6	)	$	65.1
Other comprehensive income (loss):
(Loss) gain on cash flow hedges	(7.2		)	(7.2		)	(7.2		)	14.4			(7.2		)
Reclassification adjustment transferred to Net Income from cash flow hedges	0.1			0.4			(0.3		)	(0.1		)	0.1
Pension and other postretirement benefit costs	(1.8		)	(1.8		)	(1.8		)	3.6			(1.8		)
Total Comprehensive Income	$	56.2		$	47.9		$	76.8		$	(124.7	)	$	56.2

Condensed Consolidating Statements of Comprehensive Income for the Six Months Ended June 30, 2013

(Millions)



	Parent Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Net Income	$	171.9		$	155.4		$	212.2		$	(367.7	)	$	171.8
Other comprehensive income (loss):
Gain (loss) on cash flow hedges	2.5			2.5			2.5			(5.0		)	2.5
Reclassification adjustment transferred to Net Income from cash flow hedges	1.1			0.9			0.2			(1.1		)	1.1
Pension and other postretirement benefit costs	(3.6		)	(3.6		)	(3.6		)	7.2			(3.6		)
Total Comprehensive Income	171.9			155.2			211.3			(366.6		)	171.8
Comprehensive loss attributable to noncontrolling interests	—			—			(0.1		)	—			(0.1		)
Comprehensive income attributable to controlling interests	$	171.9		$	155.2		$	211.4		$	(366.6	)	$	171.9

Condensed Consolidating Statements of Comprehensive Income for the Six Months Ended June 30, 2012

(Millions)



	Parent Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Net Income	$	157.7		$	139.9		$	199.0		$	(338.9	)	$	157.7
Other comprehensive income (loss):
(Loss) gain on cash flow hedges	(6.6		)	(6.6		)	(6.6		)	13.2			(6.6		)
Reclassification adjustment transferred to Net Income from cash flow hedges	0.5			0.8			(0.3		)	(0.5		)	0.5
Pension and other postretirement benefit costs	(3.5		)	(3.5		)	(3.5		)	7.0			(3.5		)
Total Comprehensive Income	$	148.1		$	130.6		$	188.6		$	(319.2	)	$	148.1

Condensed Consolidating Statements of Cash Flow for the Six Months Ended June 30, 2013

(Millions)



	Parent Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations				Consolidated Boardwalk Pipeline Partners, LP
Net Cash Provided by (Used In) Operating Activities	$	17.6		$	(52.5	)	$	320.1		$	—			$	285.2

Investing Activities:
Capital expenditures	—			—			(132.2		)	—				(132.2		)
Proceeds from sale of operating assets	—			—			21.2			—				21.2
Proceeds from insurance and other recoveries	—			—			1.4			—				1.4
Advances to affiliates, net	(135.4		)	(56.5		)	11.1			180.8				—
Investment in consolidated subsidiary	—			(15.1		)	—			15.1				—
Investment in unconsolidated affiliate	—			—			(21.4		)	—				(21.4		)
Net Cash (Used in) Provided by Investing Activities	(135.4		)	(71.6		)	(119.9		)	195.9				(131.0		)

Financing Activities:
Proceeds from borrowings on revolving credit agreement	—			—			458.0			—				458.0
Repayment of borrowings on revolving credit agreement	—			—			(740.0		)	—				(740.0		)
Contribution from parent	—			—			15.1			(15.1		)		—
Advances from affiliates, net	(2.4		)	124.3			56.5			(180.8		)		(2.4		)
Distributions paid	(256.4		)	—			—			—				(256.4		)
Capital contribution from noncontrolling interests	—			—			16.1			—			—	16.1
Proceeds from sale of common units	368.7			—			—			—				368.7
Capital contribution from general partner	7.8			—			—			—				7.8
Net Cash Provided by (Used in) Financing Activities	117.7			124.3			(194.3		)	(195.9		)		(148.2		)

(Decrease) increase in Cash and Cash Equivalents	(0.1		)	0.2			5.9			—				6.0
Cash and Cash Equivalents at Beginning of Period	0.1			1.0			2.8			—				3.9
Cash and Cash Equivalents at End of Period	$	—		$	1.2		$	8.7		$	—			$	9.9

Condensed Consolidating Statements of Cash Flow for the Six Months Ended June 30, 2012

(Millions)



	Parent Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Boardwalk Pipeline Partners, LP
Net Cash Provided by (Used In) Operating Activities	$	(4.1	)	$	53.4		$	329.1		$	(94.1	)	$	284.3

Investing Activities:
Capital expenditures	—			—			(90.9		)	—			(90.9		)
Proceeds from sale of operating assets	—			—			2.4			—			2.4
Proceeds from insurance and other recoveries	—			—			5.4			—			5.4
Advances to affiliates, net	(20.3		)	(36.9		)	(370.7		)	427.9			—
Investment in consolidated subsidiary	—			(26.1		)	—			26.1			—
Net Cash Provided by (Used in) Investing Activities	(20.3		)	(63.0		)	(453.8		)	454.0			(83.1		)

Financing Activities:
Proceeds from long-term debt, net of issuance costs	—			—			296.5			—			296.5
Proceeds from borrowings on revolving credit agreement	—			270.0			730.0			—			1,000.0
Repayment of borrowings on revolving credit agreement	—			(370.0		)	(873.5		)	—			(1,243.5		)
Payments of financing fees related to revolving credit facility	—			(3.8		)	—			—			(3.8		)
Contribution from parent	—			—			26.1			(26.1		)	—
Advances from affiliates, net	2.6			390.6			37.4			(428.0		)	2.6
Repayment of contribution received related to predecessor equity	—			(284.8		)	—			—			(284.8		)
Distributions paid	(228.9		)	—			(94.2		)	94.2			(228.9		)
Proceeds from sale of common units	245.0			—			—			—			245.0
Capital contribution from general partner	5.2			—			—			—			5.2
Net Cash (Used in) Provided by Financing Activities	23.9			2.0			122.3			(359.9		)	(211.7		)

Decrease in Cash and Cash Equivalents	(0.5		)	(7.6		)	(2.4		)	—			(10.5		)
Cash and Cash Equivalents at Beginning of Period	0.5			10.7			10.7			—			21.9
Cash and Cash Equivalents at End of Period	$	—		$	3.1		$	8.3		$	—		$	11.4