NiSource Reports Second Quarter 2015 Earnings

- Financial results in line with expectations

- Credit rating upgraded by Standard & Poor's, outlook raised by Fitch Ratings

- Successfully completed the separation of Columbia Pipeline Group on July 1, 2015

- Dividend, earnings growth outlook reaffirmed

Aug 03, 2015, 06:30 ET from 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 Distribution

Corporate & Other

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 Distribution

Corporate & Other

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 Distribution

Corporate & Other

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 Distribution

Corporate & Other

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

 

 

   

SOURCE NiSource Inc.



RELATED LINKS

http://www.nisource.com