NISOURCE, INC. MERRILLVILLE, Ind., Aug. 3, 2015 /PRNewswire/ -- NiSource Inc. (NYSE: NI) today announced net operating earnings per share - controlling interest (non-GAAP) of $56.8 million, or $0.18 per share, for the three months ended June 30, 2015, compared with $77.9 million, or $0.25 per share for the same period in 2014. Operating earnings (non-GAAP) for the second quarter were $212.1 million, compared to $219.1 million in the prior period.
Second quarter net operating earnings - controlling interest (non-GAAP) were lower primarily due to additional interest expense related to Columbia Pipeline Group's (CPG) long-term debt issuance prior to its separation from NiSource and the impact of non-controlling interest in Columbia Pipeline Partners, which was formed in February 2015.
On a GAAP basis, NiSource reported a loss from continuing operations - controlling interest of $36.1 million, or $0.11 per share, for the three months ended June 30, 2015, compared with income of $78.5 million, or $0.25 per share, for the same period in 2014. Operating income for the second quarter was $165.1 million, compared to $219.6 million in the prior period. Schedules 1 and 2 of this news release contain a reconciliation of net operating earnings and operating earnings to GAAP net income and operating income, respectively.
On July 1, 2015, NiSource successfully completed the separation of CPG through a distribution of all of the common stock of CPG held by NiSource to NiSource shareholders. CPG is now an independent public company trading on the NYSE under the symbol CPGX. NiSource maintains no ownership interest in CPG or Columbia Pipeline Partners following this separation. The financial information presented today includes CPG reportable segment results, as CPG remained part of NiSource through June 30, 2015. Beginning with the third quarter, CPG will be reported as discontinued operations in NiSource financial results.
"Now that the separation is complete, the foundation is set for NiSource to execute on our pure-play utility growth strategy which will enhance services to our customers and communities, and is expected to deliver sustainable earnings and dividend growth," said NiSource President and Chief Executive Officer Joseph Hamrock. "With solid, investment-grade credit ratings, $30 billion of identified long-term gas and electric system enhancement opportunities, and constructive regulatory environments across our seven states, our path forward is clear."
Hamrock reaffirmed that NiSource expects to deliver non-GAAP net operating earnings per share of $1.00-$1.10 in 2016 with planned infrastructure enhancement investments reaching approximately $1.4 billion. NiSource continues to project long-term earnings and dividend growth of 4-6 percent annually.
On July 2, NiSource declared a quarterly dividend of 15.5 cents per share, consistent with the company's intention, announced in May, to increase the combined (NiSource and CPG) dividend.
In June, NiSource received confirmation of its post-separation investment-grade credit ratings. Standard & Poor's upgraded NiSource's credit rating to BBB+ from BBB-, Fitch Ratings revised its outlook on NiSource to BBB- (positive) from BBB- (stable), and Moody's reaffirmed its rating of NiSource at Baa2.
NiSource's utilities continue execution of core infrastructure investment programs supported by complementary regulatory and customer initiatives.
NiSource remains on track to invest approximately $1.3 billion during 2015 as part of its $30 billion of long-term regulated utility infrastructure investment opportunities across its natural gas and electric utilities. Approximately 75 percent of these investments are expected to be revenue-generating investments, which help improve reliability and safety, enhance customer service and reduce emissions - all while generating sustainable long-term growth.
Gas Distribution Operations
-- Columbia Gas of Massachusetts (CMA) has reached a settlement agreement
in principle with the Massachusetts Attorney General in its base rate
case. The settlement agreement is expected to be finalized and filed for
approval with the Massachusetts Department of Public Utilities (DPU) in
August 2015. The case seeks to recover costs to support CMA's multi-year
modernization plan to maintain the safety and reliability of natural gas
service for customers.
-- Columbia Gas of Pennsylvania's (CPA) base rate case is progressing on
schedule and remains pending before the Pennsylvania Public Utility
Commission. Filed in March, the case supports the continuation of CPA's
infrastructure modernization and safety programs. If approved as filed,
the case would increase annual revenues by approximately $46 million. A
decision is expected by the end of this year.
-- On June 30, the hearing examiner in Columbia Gas of Virginia's pending
base rate case recommended specific fixed customer charges for each rate
class, addressing the final outstanding issue in the case. The
commission had previously found that the stipulated annual revenue
increase of $25.2 million is reasonable. A final order in the case is
expected later this year.
-- As announced previously, CMA received DPU approval of its 2015 Gas
System Enhancement Plan on April 30. Cost recovery associated with the
2015 investments outlined in the plan began on May 1, and is projected
to increase annual revenues by approximately $2.6 million.
Electric Operations
-- On May 26, Northern Indiana Public Service Company (NIPSCO), the Indiana
Office of Utility Consumer Counselor and some of NIPSCO's largest
industrial customers reached a settlement agreement that resolved all
concerns raised by the parties in an Indiana Court of Appeals proceeding
surrounding the company's long-term Electric Infrastructure
Modernization Plan. As part of the agreement, NIPSCO will file a base
rate case, followed by a new seven-year plan in the fourth quarter.
-- NIPSCO remains on schedule and on budget with its flue gas
desulfurization (FGD) unit at its Michigan City Generating Station. The
approximately $265 million project is expected to be placed in service
by the end of this year. This investment, supported with cost recovery,
improves air quality and helps ensure NIPSCO's generation fleet remains
in compliance with current environmental regulations. It also helps
ensure that NIPSCO can continue offering low-cost, reliable and
efficient generating capacity for its customers.
-- Progress also continued on two major electric transmission projects
designed to enhance region-wide system flexibility and reliability. The
Greentown-Reynolds project is an approximately 65-mile, 765-kilovolt
line being constructed in a joint development agreement with Pioneer
Transmission, and the Reynolds-Topeka project is a 100-mile,
345-kilovolt line. Right-of-way acquisition and permitting are under way
for both projects and substation construction has begun on both
projects. These projects involve an investment of approximately $500
million for NIPSCO and are anticipated to be in service by the end of
2018.
Second Quarter 2015 Operating Earnings - Segment Results (non-GAAP)
NiSource's consolidated operating earnings (non-GAAP) for the three months ended June 30, 2015, were $212.1 million, compared to $219.1 million for the same period in 2014. Refer to Schedule 2 for the items included in 2015 and 2014 GAAP operating income but excluded from operating earnings.
Operating earnings for NiSource's business segments for the three months ended June 30, 2015, are discussed below.
Gas Distribution Operations reported operating earnings of $55.6 million for the three months ended June 30, 2015, compared with operating earnings of $62.5 million for the prior year period. Net revenues, excluding the impact of trackers, increased by $17.3 million primarily attributable to increases in regulatory and service programs, including the implementation of rates under Columbia Gas of Ohio's approved infrastructure replacement program, as well as the impact of new rates at Columbia Gas of Pennsylvania and Columbia Gas of Virginia.
Operating expenses, excluding the impact of trackers, increased by $24.2 million due primarily to increased employee and administrative costs, higher depreciation, increased outside services costs and higher other taxes.
Electric Operations reported operating earnings of $56.6 million for the three months ended June 30, 2015, compared with operating earnings of $59.8 million for the prior year period. Net revenues, excluding the impact of trackers, decreased by $1.8 million primarily due to decreased industrial, residential and commercial usage, partially offset by increased environmental investment cost recovery.
Operating expenses, excluding the impact of trackers, increased by $1.4 million due primarily to higher depreciation, partially offset by lower electric generation costs.
Columbia Pipeline Group Operations reported operating earnings of $108.6 million for the three months ended June 30, 2015, compared with operating earnings of $103.7 million for the prior year period. Net revenues, excluding the impact of trackers, increased by $20.5 million primarily due to higher demand margin revenue as a result of growth projects placed into service and new firm contracts, partially offset by lower mineral rights royalty revenue.
Operating expenses, excluding the impact of trackers, increased by $18.2 million primarily due to higher outside services costs, increased employee and administrative costs and higher depreciation. These increases in operating expenses were partially offset by higher gains on the conveyance of mineral interests. Equity earnings increased by $2.6 million primarily from higher earnings at Pennant Midstream.
Corporate and Other Operations reported an operating earnings loss of $8.7 million for the three months ended June 30, 2015, compared with an operating earnings loss of $6.9 million for the three months ended June 30, 2014.
Other Items
Interest expense, net was $117.1 million for the three months ended June 30, 2015 compared to interest expense, net of $109.1 million for the prior period. The increase in interest expense is due primarily to CPG's issuance of long-term debt in May 2015 as part of the recapitalization, the expiration of interest rate swaps in July 2014 and the term loan agreed to in August 2014. These increases were partially offset by the maturity of long-term debt in July 2014 and the execution of NiSource's tender offer in May 2015.
Other, net reflected income of $6.5 million compared to income of $7.5 million in 2014.
The effective tax rate of net operating earnings was 35.5 percent compared to 33.7 percent for the same period last year.
Six Month Period 2015 Operating Earnings - Segment Results (non-GAAP)
NiSource's consolidated operating earnings (non-GAAP) for the six months ended June 30, 2015, were $740.8 million, compared to $728.2 million for the same period in 2014. Refer to Schedule 2 for the items included in 2015 and 2014 GAAP operating income but excluded from operating earnings.
Operating earnings for NiSource's business segments for the six months ended June 30, 2015, are discussed below.
Gas Distribution Operations reported operating earnings of $361.4 million for the six months ended June 30, 2015, compared with operating earnings of $342.6 million for the prior year period. Net revenues, excluding the impact of trackers, increased by $60.1 million primarily attributable to increases in regulatory and service programs, including the impact of new rates at Columbia Gas of Pennsylvania, Columbia Gas of Virginia and Columbia Gas of Massachusetts, as well as the implementation of rates under Columbia Gas of Ohio's approved infrastructure replacement program.
Operating expenses, excluding the impact of trackers, increased by $41.3 million due primarily to increased employee and administrative costs, higher depreciation, increased outside services costs and higher other taxes.
Electric Operations reported operating earnings of $123.8 million for the six months ended June 30, 2015, compared with operating earnings of $134.0 million for the prior year period. Net revenues, excluding the impact of trackers, decreased by $2.0 million primarily due to decreased off-system sales and lower industrial usage. These decreases were partially offset by higher revenue from two electric transmission projects authorized by the Midcontinent Independent System Operator (MISO), lower fuel handling costs and increased environmental investment cost recovery.
Operating expenses, excluding the impact of trackers, increased by $8.2 million due primarily to higher depreciation.
Columbia Pipeline Group Operations reported operating earnings of $271.6 million for the six months ended June 30, 2015, compared with operating earnings of $262.6 million for the prior year period. Net revenues, excluding the impact of trackers, increased by $42.1 million primarily due to higher demand margin revenue as a result of growth projects placed into service and new firm contracts. This increase was partially offset by decreased mineral rights royalty revenue.
Operating expenses, excluding the impact of trackers, increased by $41.3 million primarily due to higher employee and administrative costs, increased outside service costs, higher depreciation and lower gains on the conveyances of mineral interests. Equity earnings increased by $8.2 million primarily from increased earnings at Pennant Midstream and Millennium Pipeline.
Corporate and Other Operations reported an operating earnings loss of $16.0 million for the six months ended June 30, 2015, compared with an operating earnings loss of $11.0 million for the six months ended June 30, 2014. The increase in operating earnings loss is primarily due to higher employee and administrative costs.
Other Items
Interest expense, net was $228.1 million for the six months ended June 30, 2015 compared to interest expense, net of $218.2 million for the prior period. The increase in interest expense is due primarily to CPG's issuance of long-term debt in May 2015 as part of the recapitalization, the expiration of interest rate swaps in July 2014 and the term loan agreed to in August 2014. These increases were partially offset by the maturity of long-term debt in July 2014 and the execution of NiSource's tender offer in May 2015.
Other, net reflected income of $13.6 million compared to income of $12.0 million in 2014.
The effective tax rate of net operating earnings was 35.3 percent compared to 35.6 percent for the same period last year.
Regulation G Disclosure Statement
This press release includes guidance for NiSource with respect to net operating earnings from continuing operations, which is a non-GAAP financial measure as defined by the SEC's Regulation G. It should be noted that there will likely be differences between such net operating earnings and GAAP equivalents due to various factors, including, but not limited to, weather, restructuring, environmental and separation related costs and expenses and accounting changes. NiSource is not able to estimate the impact of such factors on GAAP earnings and, as such, is not providing earnings guidance on a GAAP basis.
About NiSource
NiSource Inc. (NYSE: NI) is one of the largest fully-regulated utility companies in the United States, serving approximately 3.5 million natural gas customers and 500,000 electric customers across seven states through its local Columbia Gas and NIPSCO brands. Based in Merrillville, Indiana, NiSource's more than 7,000 employees are focused on safely delivering reliable and affordable energy to our customers and communities we serve. NiSource has been designated a World's Most Ethical Company by the Ethisphere Institute since 2012 and is a member of the Dow Jones Sustainability - North America Index. Additional information about NiSource, its investments in modern infrastructure and systems, its commitments and its local brands can be found at www.nisource.com. NI-F
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements are subject to various risks and uncertainties. Examples of forward-looking statements in this release include statements and expectations regarding NiSource's business, performance and growth following the separation. Factors that could cause actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this Quarterly Report on Form 10-Q include, but are not limited to, NiSource's debt obligations and ability to comply with related covenants, changes in NiSource's credit rating, growth opportunities for NiSource's businesses, changes in general economic and market conditions, regulatory rate reviews and proceedings, increased competition in deregulated energy markets, compliance with environmental laws, fluctuations in weather, climate change, natural disasters, acts of terrorism and other catastrophic events, economic conditions in certain industries, fluctuations in the price of energy commodities, counterparty credit risk, any impairment of goodwill and definite-lived intangible assets, changes in taxation or accounting principles, accidents and other operating risks, aging infrastructure, disruptions in information technology and cyber-attacks, NiSource's ability to achieve the intended benefits of the Separation and other matters set forth in the "Risk Factors" section in NiSource's 2014 Form 10-K and subsequent Form 10-Q filed with the Securities and Exchange Commission, many of which are beyond the control of NiSource. In addition, the relative contributions to profitability by each segment, and the assumptions underlying the forward-looking statements relating thereto, may change over time. NiSource expressly disclaims any duty to update, supplement or amend any of its forward-looking statements contained in this release, whether as a result of new information, subsequent events or otherwise, except as required by applicable law.
NiSource Inc.
Consolidated Net Operating Earnings (Non-GAAP)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
(in millions, except per
share amounts) 2015 2014 2015 2014
------------------------ ---- ---- ---- ----
Net Revenues
Gas Distribution $311.8 $426.4 $1,373.1 $1,619.7
Gas Transportation and
Storage 427.4 390.1 1,055.4 968.6
Electric 376.5 401.8 768.4 847.1
Other 60.1 116.7 106.4 193.7
---- ----- ----- -----
Gross Revenues 1,175.8 1,335.0 3,303.3 3,629.1
Cost of Sales (excluding
depreciation and
amortization) 218.6 371.7 1,024.6 1,433.0
------------------------ ----- ----- ------- -------
Total Net Revenues 957.2 963.3 2,278.7 2,196.1
------------------ ----- ----- ------- -------
Operating Expenses
Operation and maintenance 432.9 401.0 837.5 777.9
Operation and maintenance -
trackers 87.7 132.1 236.7 256.4
Depreciation and
amortization 163.2 148.4 319.6 297.1
Depreciation and
amortization -trackers 4.2 0.7 5.3 0.7
Gain on sale of assets (8.3) (0.3) (13.6) (17.8)
Other taxes 64.3 58.7 136.6 129.3
Other taxes - trackers 14.8 14.7 44.9 45.2
---------------------- ---- ---- ---- ----
Total Operating Expenses 758.8 755.3 1,567.0 1,488.8
------------------------ ----- ----- ------- -------
Equity Earnings in
Unconsolidated Affiliates 13.7 11.1 29.1 20.9
-------------------------- ---- ---- ---- ----
Operating Earnings 212.1 219.1 740.8 728.2
------------------ ----- ----- ----- -----
Other Income (Deductions)
Interest expense, net (117.1) (109.1) (228.1) (218.2)
Other, net 6.5 7.5 13.6 12.0
---------- --- --- ---- ----
Total Other Deductions (110.6) (101.6) (214.5) (206.2)
---------------------- ------ ------ ------ ------
Operating Earnings From Continuing Operations
Before Income Taxes 101.5 117.5 526.3 522.0
Income Taxes 36.0 39.6 185.6 185.7
------------ ---- ---- ----- -----
Net Operating Earnings from
Continuing Operations 65.5 77.9 340.7 336.3
--------------------------- ---- ---- ----- -----
Net Operating Earnings from
Continuing Operations -
Noncontrolling Interest (8.7) - (15.6) -
--------------------------- ---- -----
Net Operating Earnings from
Continuing Operations -
Controlling Interest 56.8 77.9 325.1 336.3
--------------------------- ---- ---- ----- -----
GAAP Adjustment (92.9) 0.6 (92.8) 8.6
--------------- ----- --- ----- ---
GAAP (Loss) Income from
Continuing Operations -
Controlling Interest $(36.1) $78.5 $232.3 $344.9
======================== ====== ===== ====== ======
Basic Net Operating
Earnings Per Share from
Continuing Operations $0.18 $0.25 $1.03 $1.07
------------------------ ----- ----- ----- -----
GAAP Basic (Loss) Earnings
Per Share from Continuing
Operations $(0.11) $0.25 $0.73 $1.10
-------------------------- ------ ----- ----- -----
Basic Average Common Shares
Outstanding 317.5 315.0 317.0 314.6
=========================== ===== ===== ===== =====
NiSource Inc.
Segment Operating Earnings (Non-GAAP)
(unaudited)
Three Months Ended Six Months Ended
Gas Distribution Operations June 30, June 30,
-------- --------
(in millions) 2015 2014 2015 2014
------------ ---- ---- ---- ----
Net Revenues
Sales revenues $514.6 $619.5 $1,951.5 $2,163.4
Less: Cost of gas sold 133.4 257.2 856.0 1,180.2
Net Revenues 381.2 362.3 1,095.5 983.2
------------ ----- ----- ------- -----
Operating Expenses
Operation and maintenance 207.4 189.7 400.8 371.1
Operation and maintenance - trackers 18.6 17.1 117.0 64.5
Depreciation and amortization 58.2 54.1 114.3 106.3
Other taxes 26.6 24.2 57.1 53.5
Other taxes - trackers 14.8 14.7 44.9 45.2
---------------------- ---- ---- ---- ----
Total Operating Expenses 325.6 299.8 734.1 640.6
------------------------ ----- ----- ----- -----
Operating Earnings $55.6 $62.5 $361.4 $342.6
================== ===== ===== ====== ======
GAAP Adjustment (5.9) (2.7) 13.5 19.0
--------------- ---- ---- ---- ----
GAAP Operating Income $49.7 $59.8 $374.9 $361.6
===================== ===== ===== ====== ======
Three Months Ended Six Months Ended
Electric Operations June 30, June 30,
-------- --------
(in millions) 2015 2014 2015 2014
------------ ---- ---- ---- ----
Net Revenues
Sales revenues $376.6 $402.4 $769.6 $848.1
Less: Cost of sales 116.6 146.3 242.3 326.7
Net Revenues 260.0 256.1 527.3 521.4
------------ ----- ----- ----- -----
Operating Expenses
Operation and maintenance 111.4 116.5 224.6 223.1
Operation and maintenance - trackers 7.9 5.7 14.9 11.6
Depreciation and amortization 64.3 59.4 125.4 119.8
Depreciation and amortization - trackers 4.2 0.7 5.3 0.7
Other taxes 15.6 14.0 33.3 32.2
Total Operating Expenses 203.4 196.3 403.5 387.4
------------------------ ----- ----- ----- -----
Operating Earnings $56.6 $59.8 $123.8 $134.0
================== ===== ===== ====== ======
GAAP Adjustment (10.9) 3.1 (8.1) 7.8
---------------
GAAP Operating Income $45.7 $62.9 $115.7 $141.8
===================== ===== ===== ====== ======
NiSource Inc.
Segment Operating Earnings (Non-GAAP)
(unaudited)
Three Months Ended Six Months Ended
Columbia Pipeline Group Operations June 30, June 30,
-------- --------
(in millions) 2015 2014 2015 2014
------------ ---- ---- ---- ----
Net Revenues
Transportation revenues $211.3 $181.5 $462.4 $403.8
Storage revenues 49.0 49.3 99.0 99.2
Other revenues 55.6 112.7 94.3 186.1
-------------- ---- ----- ---- -----
Total Operating Revenues 315.9 343.5 655.7 689.1
Less: Cost of sales 0.1 0.1 0.2 0.2
Net Revenues 315.8 343.4 655.5 688.9
------------ ----- ----- ----- -----
Operating Expenses
Operation and maintenance 115.2 95.8 217.4 190.5
Operation and maintenance - trackers 61.2 109.3 104.8 180.3
Depreciation and amortization 33.9 28.8 66.4 58.5
Gain on sale of assets (8.3) (0.3) (13.6) (17.8)
Other taxes 18.9 17.2 38.0 35.7
Total Operating Expenses 220.9 250.8 413.0 447.2
------------------------ ----- ----- ----- -----
Equity Earnings in Unconsolidated Affiliates 13.7 11.1 29.1 20.9
Operating Earnings $108.6 $103.7 $271.6 $262.6
================== ====== ====== ====== ======
GAAP Adjustment - - - -
---------------
GAAP Operating Income $108.6 $103.7 $271.6 $262.6
===================== ====== ====== ====== ======
Three Months Ended Six Months Ended
Corporate and Other Operations June 30, June 30,
-------- --------
(in millions) 2015 2014 2015 2014
------------ ---- ---- ---- ----
Operating Earnings Loss $(8.7) $(6.9) $(16.0) $(11.0)
======================= ===== ===== ====== ======
GAAP Adjustment (30.2) 0.1 (51.0) (1.7)
---------------
GAAP Operating Loss $(38.9) $(6.8) $(67.0) $(12.7)
=================== ====== ===== ====== ======
NiSource Inc.
Segment Volumes and Statistical Data
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
Gas Distribution
Operations 2015 2014 2015 2014
---------------- ---- ---- ---- ----
Sales and Transportation
(MMDth)
Residential 30.4 35.0 183.5 191.5
Commercial 25.1 27.4 113.8 117.5
Industrial 123.6 121.7 270.4 258.5
Off System 6.0 14.2 19.5 28.5
Other (2.0) (0.3) (2.0) (0.1)
----- ---- ---- ---- ----
Total 183.1 198.0 585.2 595.9
----- ----- ----- ----- -----
Weather Adjustment 6.3 2.3 (29.2) (33.8)
------------------ --- --- ----- -----
Sales and Transportation
Volumes -Excluding
Weather 189.4 200.3 556.0 562.1
======================== ===== ===== ===== =====
Heating Degree Days 489 555 3,893 3,992
Normal Heating Degree
Days 599 599 3,491 3,491
% (Warmer) Colder than
Normal (18)% (7)% 12% 14%
Customers
Residential 3,070,555 3,051,277
Commercial 280,329 278,776
Industrial 7,717 7,546
Other 938 14
----- --- ---
Total 3,359,539 3,337,613
----- --------- ---------
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
Electric Operations 2015 2014 2015 2014
------------------- ---- ---- ---- ----
Sales (Gigawatt Hours)
Residential 716.9 793.2 1,582.7 1,689.4
Commercial 929.1 964.9 1,869.1 1,900.4
Industrial 2,295.0 2,455.8 4,720.4 5,062.9
Wholesale 1.0 12.1 117.9 323.9
Other 34.5 34.9 69.1 68.3
----- ---- ---- ---- ----
Total 3,976.5 4,260.9 8,359.2 9,044.9
----- ------- ------- ------- -------
Weather Adjustment 13.3 (44.4) (28.9) (114.4)
------------------ ---- ----- ----- ------
Sales Volumes -
Excluding Weather 3,989.8 4,216.5 8,330.3 8,930.5
================== ======= ======= ======= =======
Cooling Degree Days 229 276 229 276
Normal Cooling Degree
Days 229 229 229 229
% Colder than Normal -% 21% -% 21%
Electric Customers
Residential 402,955 401,671
Commercial 54,762 54,303
Industrial 2,357 2,370
Wholesale 747 767
Other 4 6
----- --- ---
Total 460,825 459,117
----- ------- -------
NiSource Inc.
Segment Volumes and Statistical Data
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
Columbia Pipeline Group Operations 2015 2014 2015 2014
-------------------------------- ---- ---- ---- ----
Throughput (MMDth)
Columbia Transmission 215.3 194.2 706.3 653.7
Columbia Gulf 137.3 145.4 283.0 330.3
Crossroads Pipeline 3.5 3.5 8.6 9.2
Intrasegment eliminations (11.4) (21.6) (40.1) (83.2)
------------------------- ----- ----- ----- -----
Total 344.7 321.5 957.8 910.0
----- ----- ----- ----- -----
NiSource Inc.
Schedule 1 - Reconciliation of Net Operating Earnings to GAAP
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
(in millions, except per
share amounts) 2015 2014 2015 2014
------------------------ ---- ---- ---- ----
Net Operating Earnings from
Continuing Operations -
Controlling Interest $56.8 $77.9 $325.1 $336.3
--------------------------- ----- ----- ------ ------
Items excluded from
operating earnings
Net Revenues:
Weather - compared to normal (6.8) 0.1 15.4 26.5
Operating Expenses:
Environmental costs (10.0) - (10.0) -
Transaction costs (30.4) - (50.9) -
Gain (Loss) on sale of
assets 0.2 0.4 (0.1) (1.4)
---------------------- --- --- ---- ----
Total items excluded from
operating earnings (47.0) 0.5 (45.6) 25.1
------------------------- ----- --- ----- ----
Other Deductions:
Loss on early extinguishment
of long-term debt (97.2) - (97.2) -
Income taxes -discrete
items (3.9) - (4.5) (7.0)
Tax effect of above items 55.2 0.1 54.5 (9.5)
Total items excluded from
net operating earnings (92.9) 0.6 (92.8) 8.6
------------------------- ----- --- ----- ---
GAAP (Loss) Income from
Continuing Operations -
Controlling Interest $(36.1) $78.5 $232.3 $344.9
======================== ====== ===== ====== ======
Basic Average Common Shares
Outstanding 317.5 315.0 317.0 314.6
=========================== ===== ===== ===== =====
Basic Net Operating Earnings
Per Share from Continuing
Operations $0.18 $0.25 $1.03 $1.07
---------------------------- ----- ----- ----- -----
Items excluded from net
operating earnings (after-
tax) (0.29) - (0.30) 0.03
--------------------------- ----
GAAP Basic (Loss) Earnings
Per Share from Continuing
Operations $(0.11) $0.25 $0.73 $1.10
-------------------------- ------ ----- ----- -----
NiSource Inc.
Schedule 2 - Adjustments by Segment from Operating Earnings to GAAP
For the Quarter ended June 30,
Electric Columbia Pipeline Group
-------- -----------------------
Gas Corporate & Other
Distribution
------------
2015 (in millions) Total
----------------- -----
Operating Earnings (Loss) $55.6 $56.6 $108.6 $(8.7) $212.1
Net Revenues:
Weather -compared to
normal (5.9) (0.9) - - (6.8)
-------------------- ---- ---- --- --- ----
Total Impact -Net
Revenues (5.9) (0.9) - - (6.8)
Operating Expenses:
Environmental costs - (10.0) - - (10.0)
Transaction costs - - - (30.4) (30.4)
Gain on sale of assets - - - 0.2 0.2
Total Impact -Operating
Expenses - (10.0) - (30.2) (40.2)
----------------------- --- ----- --- ----- -----
Total Impact -Operating
Loss $(5.9) $(10.9) $ - $(30.2) (47.0)
----------------------- ----- ------ ---------- ------ -----
Operating Income (Loss) -
GAAP $49.7 $45.7 $108.6 $(38.9) 165.1
------------------------- ----- ----- ------ ------ -----
Electric Columbia
Pipeline
Group
-----
Gas Corporate & Other
Distribution
------------
2014 (in millions) Total
----------------- -----
Operating Earnings (Loss) $62.5 $59.8 $103.7 $(6.9) $219.1
Net Revenues:
Weather -compared to
normal (2.9) 3.0 - - 0.1
-------------------- ---- --- --- --- ---
Total Impact -Net
Revenues (2.9) 3.0 - - 0.1
Operating Expenses:
Gain on sale of assets 0.2 0.1 - 0.1 0.4
---------------------- --- --- --- --- ---
Total Impact -Operating
Expenses 0.2 0.1 - 0.1 0.4
----------------------- --- --- --- --- ---
Total Impact -Operating
(Loss) Income $(2.7) $3.1 $ - $0.1 $0.5
----------------------- ----- ---- ---------- ---- ----
Operating Income (Loss) -
GAAP $59.8 $62.9 $103.7 $(6.8) $219.6
------------------------- ----- ----- ------ ----- ------
NiSource Inc.
Schedule 2 - Adjustments by Segment from Operating Earnings to GAAP
For the Six Months Ended June 30,
Electric Columbia
Pipeline
Group
-----
Gas Corporate & Other
Distribution
------------
2015 (in millions) Total
----------------- -----
Operating Earnings (Loss) $361.4 $123.8 $271.6 $(16.0) $740.8
Net Revenues:
Weather -compared to
normal 13.5 1.9 - - 15.4
-------------------- ---- --- --- --- ----
Total Impact -Net
Revenues 13.5 1.9 - - 15.4
Operating Expenses:
Environmental costs - (10.0) - - (10.0)
Transaction costs - - - (50.9) (50.9)
Loss on sale of assets - - - (0.1) (0.1)
Total Impact -Operating
Expenses - (10.0) - (51.0) (61.0)
----------------------- --- ----- --- ----- -----
Total Impact -Operating
Income (Loss) $13.5 $(8.1) $ - $(51.0) $(45.6)
----------------------- ----- ----- ---------- ------ ------
Operating Income (Loss) -
GAAP $374.9 $115.7 $271.6 $(67.0) $695.2
------------------------- ------ ------ ------ ------ ------
Electric Columbia
Pipeline
Group
-----
Gas Corporate & Other
Distribution
------------
2014 (in millions) Total
----------------- -----
Operating Earnings (Loss) $342.6 $134.0 $262.6 $(11.0) $728.2
Net Revenues:
Weather -compared to
normal 18.8 7.7 - - 26.5
Settlement agreement - - - - -
Total Impact -Net
Revenues 18.8 7.7 - - 26.5
Operating Expenses:
Gain (Loss) on sale of
assets 0.2 0.1 - (1.7) (1.4)
---------------------- --- --- --- ---- ----
Total Impact -Operating
Expenses 0.2 0.1 - (1.7) (1.4)
----------------------- --- --- --- ---- ----
Total Impact -Operating
(Loss) Income $19.0 $7.8 $ - $(1.7) $25.1
----------------------- ----- ---- ---------- ----- -----
Operating Income (Loss) -
GAAP $361.6 $141.8 $262.6 $(12.7) $753.3
------------------------- ------ ------ ------ ------ ------
NiSource Inc.
Consolidated Income Statements (GAAP)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
(in millions, except per
share amounts) 2015 2014 2015 2014
------------------------ ---- ---- ---- ----
Net Revenues
Gas Distribution $305.9 $423.5 $1,386.6 $1,638.5
Gas Transportation and
Storage 427.4 390.1 1,055.4 968.6
Electric 375.6 404.8 770.3 854.8
Other 60.1 116.7 106.4 193.7
----- ---- ----- ----- -----
Gross Revenues 1,169.0 1,335.1 3,318.7 3,655.6
Cost of Sales (excluding
depreciation and
amortization) 218.6 371.7 1,024.6 1,433.0
------------------------ ----- ----- ------- -------
Total Net Revenues 950.4 963.4 2,294.1 2,222.6
------------------ ----- ----- ------- -------
Operating Expenses
Operation and maintenance 561.0 533.1 1,135.1 1,034.3
Depreciation and
amortization 167.4 149.1 324.9 297.8
Gain on sale of assets (8.5) (0.7) (13.5) (16.4)
Other taxes 79.1 73.4 181.5 174.5
Total Operating Expenses 799.0 754.9 1,628.0 1,490.2
------------------------ ----- ----- ------- -------
Equity Earnings in
Unconsolidated Affiliates 13.7 11.1 29.1 20.9
-------------------------- ---- ---- ---- ----
Operating Income 165.1 219.6 695.2 753.3
---------------- ----- ----- ----- -----
Other Income (Deductions)
Interest expense, net (117.1) (109.1) (228.1) (218.2)
Other, net 6.5 7.5 13.6 12.0
Loss on early extinguishment
of long-term debt (97.2) - (97.2) -
---------------------------- ----- -----
Total Other Deductions (207.8) (101.6) (311.7) (206.2)
---------------------- ------ ------ ------ ------
(Loss) Income from
Continuing Operations
before Income Taxes (42.7) 118.0 383.5 547.1
Income Taxes (15.3) 39.5 135.6 202.2
------------ ----- ---- ----- -----
(Loss) Income from
Continuing Operations (27.4) 78.5 247.9 344.9
---------------------- ----- ---- ----- -----
Loss from Discontinued
Operations -net of taxes (0.3) (0.3) (0.3) (0.5)
Net (Loss) Income (27.7) 78.2 247.6 344.4
Less: Net income
attributable to
noncontrolling interest 8.7 - 15.6 -
------------------------ --- --- ---- ---
Net (Loss) Income
attributable to NiSource $(36.4) $78.2 $232.0 $344.4
========================= ====== ===== ====== ======
Amounts attributable to NiSource:
(Loss) Income from
continuing operations $(36.1) $78.5 $232.3 $344.9
Loss from discontinued
operations (0.3) (0.3) (0.3) (0.5)
Net (Loss) Income
attributable to NiSource $(36.4) $78.2 $232.0 $344.4
------------------------- ------ ----- ------ ------
Basic (Loss) Earnings Per Share
Continuing operations $(0.11) $0.25 $0.73 $1.10
Discontinued operations - - - -
-----------------------
Basic (Loss) Earnings Per
Share $(0.11) $0.25 $0.73 $1.10
------------------------- ------ ----- ----- -----
Diluted (Loss) Earnings Per Share
Continuing operations $(0.11) $0.25 $0.73 $1.09
Discontinued operations - - - -
-----------------------
Diluted (Loss) Earnings Per
Share $(0.11) $0.25 $0.73 $1.09
--------------------------- ------ ----- ----- -----
Dividends Declared Per
Common Share $ - $0.26 $0.52 $0.76
---------------------- ----------- ----- ----- -----
Basic Average Common Shares
Outstanding 317.5 315.0 317.0 314.6
Diluted Average Common
Shares 317.5 316.1 318.0 315.7
---------------------- ----- ----- ----- -----
NiSource Inc.
Consolidated Balance Sheets (GAAP)
(unaudited)
June 30, December 31,
(in
millions) 2015 2014
---------- ---- ----
ASSETS
Property, Plant and Equipment
Utility
plant $26,225.2 $25,234.8
Accumulated
depreciation
and
amortization (9,718.8) (9,578.6)
------------- -------- --------
Net utility
plant 16,506.4 15,656.2
----------- -------- --------
Other
property,
at cost,
less
accumulated
depreciation 401.9 360.9
Net
Property,
Plant and
Equipment 16,908.3 16,017.1
---------- -------- --------
Investments and Other Assets
Unconsolidated
affiliates 452.3 452.6
Other
investments 200.7 210.4
------------ ----- -----
Total
Investments
and Other
Assets 653.0 663.0
------------ ----- -----
Current Assets
Cash and
cash
equivalents 496.6 25.4
Restricted
cash 25.2 24.9
Accounts
receivable
(less
reserve of
$38.1 and
$25.2,
respectively) 672.7 1,070.1
Gas
inventory 259.2 445.1
Underrecovered
gas costs 3.5 32.0
Material
and
supplies,
at average
cost 112.4 106.0
Electric
production
fuel, at
average
cost 96.5 64.8
Exchange
gas
receivable 57.1 63.1
Regulatory
assets 175.5 193.5
Deferred
income
taxes 303.8 272.1
Prepayments
and other 133.2 169.5
Total
Current
Assets 2,335.7 2,466.5
-------- ------- -------
Other Assets
Regulatory
assets 1,673.7 1,696.4
Goodwill 3,666.2 3,666.2
Intangible
assets 258.4 264.7
Deferred
charges
and other 111.6 92.4
---------- ----- ----
Total Other
Assets 5,709.9 5,719.7
----------- ------- -------
Total
Assets $25,606.9 $24,866.3
======= ========= =========
NiSource Inc.
Consolidated Balance Sheets (GAAP) (continued)
(unaudited)
June 30, December 31,
(in millions, except share
amounts) 2015 2014
-------------------------- ---- ----
CAPITALIZATION AND LIABILITIES
Capitalization
NiSource Common Stockholders' Equity
Common stock -$0.01 par
value, 400,000,000 shares
authorized; 317,668,149 and
316,037,421 shares
outstanding, respectively $3.2 $3.2
Additional paid-in capital 5,065.1 4,787.6
Retained earnings 1,561.1 1,494.0
Accumulated other
comprehensive loss (44.4) (50.6)
Treasury stock (79.1) (58.9)
-------------- ----- -----
Total NiSource Common
Stockholders' Equity 6,505.9 6,175.3
Noncontrolling interest in
consolidated subsidiaries 950.0 -
-------------------------- ----- ---
Total Equity 7,455.9 6,175.3
Long-term debt, excluding
amounts due within one year 8,881.1 8,155.9
Total Capitalization 16,337.0 14,331.2
-------------------- -------- --------
Current Liabilities
Current portion of long-term
debt 442.6 266.6
Short-term borrowings 161.8 1,576.9
Accounts payable 429.2 670.6
Customer deposits and credits 206.9 294.3
Taxes accrued 221.5 266.7
Interest accrued 141.6 140.7
Overrecovered gas and fuel
costs 198.6 45.6
Exchange gas payable 63.9 136.2
Deferred revenue 21.6 25.6
Regulatory liabilities 136.1 62.4
Accrued capital expenditures 146.3 61.1
Accrued liability for
postretirement and
postemployment benefits 5.9 5.9
Legal and environmental 34.5 24.2
Other accruals 313.8 378.1
Total Current Liabilities 2,524.3 3,954.9
------------------------- ------- -------
Other Liabilities and Deferred Credits
Deferred income taxes 3,822.6 3,661.6
Deferred investment tax
credits 16.1 17.3
Deferred credits 105.1 101.1
Accrued liability for
postretirement and
postemployment benefits 633.9 675.9
Regulatory liabilities 1,692.6 1,673.8
Asset retirement obligations 204.7 159.4
Other noncurrent liabilities 270.6 291.1
---------------------------- -----
Total Other Liabilities and
Deferred Credits 6,745.6 6,580.2
--------------------------- ------- -------
Commitments and Contingencies - -
----------------------------- --- ---
Total Capitalization and
Liabilities $25,606.9 $24,866.3
======================== ========= =========
NiSource Inc.
Statements of Consolidated Cash Flows (GAAP)
(unaudited)
Six Months Ended June
30,(in millions) 2015 2014
--------------------- ---- ----
Operating Activities
Net Income $247.6 $344.4
Adjustments to Reconcile Net Income to Net Cash from Continuing
Operations:
Loss on early
extinguishment of debt 97.2 -
Depreciation and
amortization 324.9 297.8
Net changes in price risk
management assets and
liabilities 0.1 1.4
Deferred income taxes and
investment tax credits 119.2 186.8
Deferred revenue 6.8 1.6
Stock compensation
expense and 401(k)
profit sharing
contribution 33.4 27.9
Gain on sale of assets (13.5) (16.4)
Income from
unconsolidated
affiliates (28.4) (20.6)
Loss from discontinued
operations -net of
taxes 0.3 0.5
Amortization of debt
related costs 5.4 5.1
AFUDC equity (13.3) (9.2)
Distributions of earnings
received from equity
investees 27.9 12.9
Changes in Assets and Liabilities
Accounts receivable 385.6 176.4
Income tax receivable (0.2) 1.0
Inventories 146.8 28.2
Accounts payable (249.6) (170.3)
Customer deposits and
credits (114.8) (20.9)
Taxes accrued (44.7) (43.2)
Interest accrued 0.9 5.5
Over (Under) recovered
gas and fuel costs 181.5 (11.6)
Exchange gas receivable/
payable (66.2) (112.3)
Other accruals (69.8) (47.6)
Prepayments and other
current assets 36.7 43.0
Regulatory assets/
liabilities 125.4 14.8
Postretirement and
postemployment benefits (41.5) (61.8)
Deferred credits 3.7 11.1
Deferred charges and
other noncurrent assets 2.3 (0.3)
Other noncurrent
liabilities 12.0 7.8
---------------- ---- ---
Net Operating Activities
from Continuing
Operations 1,115.7 652.0
Net Operating Activities
used for Discontinued
Operations (0.1) (1.0)
------------------------
Net Cash Flows from
Operating Activities 1,115.6 651.0
--------------------- ------- -----
Investing Activities
Capital expenditures (991.1) (852.9)
Insurance recoveries 2.1 6.8
Proceeds from disposition
of assets 16.7 6.2
Restricted cash deposits (0.3) (1.8)
Distributions from
(contributions to)
equity investees 2.2 (54.8)
Other investing
activities (23.4) (1.1)
--------------- ----- ----
Net Cash Flows used for
Investing Activities (993.8) (897.6)
----------------------- ------ ------
Financing Activities
Issuance of common units
of CPPL, net of issuance
costs 1,168.4 -
Issuance of long-term
debt 2,745.9 -
Repayments of long-term
debt and capital lease
obligations (1,856.4) (13.3)
Premiums and other debt
related costs (116.0) -
Change in short-term
borrowings, net (1,415.1) 402.4
Issuance of common stock 12.4 16.1
Acquisition of treasury
stock (20.2) (10.2)
Distributions to
noncontrolling interest (4.9) -
Dividends paid -common
stock (164.7) (157.2)
---------------------- ------ ------
Net Cash Flow from
Financing Activities 349.4 237.8
--------------------- ----- -----
Change in cash and cash
equivalents from (used
for) continuing
operations 471.3 (7.8)
Change in cash and cash
equivalents used for
discontinued operations (0.1) (1.0)
Cash and cash equivalents
at beginning of period 25.4 26.8
------------------------- ---- ----
Cash and Cash Equivalents
at End of Period $496.6 $18.0
========================= ====== =====
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SOURCE NiSource Inc.
