Exhibit 99.1
| | |
February 1, 2012 | |  801 E. 86th Avenue Merrillville, IN 46410 |
| FOR ADDITIONAL INFORMATION | | |
| Media | | Investors |
| Mike Banas | | Randy Hulen |
| Communications Manager | | Managing Director, Investor Relations |
| (219) 647-5581 | | (219) 647-5688 |
| mbanas@nisource.com | | rghulen@nisource.com |
NiSource Reports 2011 Earnings
| | • | | Results at the top of 2011 earnings guidance range |
| | • | | Infrastructure-investment-driven growth opportunities advance |
| | • | | Record $1.4 billion capital investment program in 2012 |
| | • | | 2012 earnings outlook of $1.40 to $1.50 per share reflects ongoing growth |
MERRILLVILLE, Ind.—NiSource Inc. (NYSE: NI) today announced net operating earnings (non-GAAP) of $377.8 million, or $1.35 per share, for the twelve months ended Dec. 31, 2011, compared to net operating earnings of $338.2 million, or $1.22 per share for 2010 – an increase of about 10.7 percent. NiSource’s consolidated operating earnings (non-GAAP) for the twelve months ended Dec. 31, 2011, were $961.3 million compared to $915.3 million in 2010.
On a GAAP basis, NiSource reported income from continuing operations for the twelve months ended Dec. 31, 2011, of $303.8 million, or $1.08 per share, compared with $285.2 million, or $1.03 per share in 2010. Operating income was $905.1 million for 2011 versus $905.7 million in the year-ago period. Schedules 1 and 2 of this news release contain a reconciliation of net operating earnings and operating earnings to GAAP.
For the three months ended Dec. 31, 2011, net operating earnings (non-GAAP) were $91.2 million, or $0.32 per share, compared with $93.6 million, or $0.33 per share, for the same period in 2010. On a GAAP basis, income from continuing operations for the three months ended Dec. 31, 2011, was $17.6 million, or $0.06 per share, compared with $34.2 million, or $0.12 per share for the fourth quarter of 2010.
“2011 was a year of significant achievement, groundbreaking performance and industry-leading growth in shareholder value,” NiSource President and Chief Executive OfficerRobert C. Skaggs, Jr. said. “Across the board, NiSource teams delivered on our well-established, infrastructure-investment-driven business strategy. This strategy generated earnings growth in line with our guidance range for the fifth consecutive year, and positioned the company to deliver total shareholder return of approximately 40 percent in 2011, significantly outperforming broader market and utility indices for the third consecutive year.”
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In announcing NiSource’s 2011 results, Skaggs highlighted key business accomplishments and ongoing initiatives expected to drive continued earnings growth for the company during 2012.
Financial strength to fund $1.4 billion in 2012 capital investments
NiSource continued to build on its financial strength and discipline during 2011, positioning the company to take advantage of a deep and expanding inventory of identified investment opportunities across all its business units.
“Building on NiSource’s disciplined, well-executed financial strategy, and the range of investment opportunities available to the company, we are pleased to announce a capital investment program of approximately $1.4 billion in 2012,” Skaggs said. “This represents an increase of nearly 25 percent over our $1.13 billion 2011 program.”
Skaggs noted that the increase will primarily fund attractive and accretive investment opportunities at itsNiSource Gas Transmission and Storage (NGT&S)unit, as well as atNorthern Indiana Public Service Company (NIPSCO). In addition, the company expects to invest $533 million at itsNiSource Gas Distribution (NGD)business unit.
The company’s solid financial profile was further strengthened as a result of a number of key initiatives taken during 2011. These initiatives, which will serve to reduce financing costs, extend the company’s debt maturity profile and help manage its liabilities, included:
| | • | | Successful issuance of a total of $900 million of long-term notes, of which $250 million was used to make an accelerated contribution to the company’s pension plans; |
| | • | | Completion of a $250 million tender offer to repurchase high-interest long-term debt in December; |
| | • | | Launch of a $500 million commercial paper program in June; and |
| | • | | Renewal of the company’s $1.5 billion revolving credit facility for an additional four years in March. |
Skaggs noted that, given NiSource’s strong cash position, the company does not plan to draw upon its Sept. 2010 forward equity sale until the third quarter of 2012. NiSource closed the year with $364 million in net available liquidity.
NIPSCO electric positioned for continued long-term investment and growth
NIPSCO’s electric business made significant strides during 2011 to advance its strategy of enhancing customer service and reliability, modernizing rate design and building a foundation for long-term, investment-driven growth.
| | • | | In December, NIPSCO’s landmark electric rate case settlement was approved without modification by the Indiana Utility Regulatory Commission (IURC). The collaborative settlement represents a balanced agreement that supports NIPSCO's ability to provide Indiana families, businesses and industries with the affordable, reliable and environmentally sustainable power they need now and in the future. |
| | • | | As part of a multi-state effort to strengthen the electric transmission system serving the Midwest, NIPSCO will make an approximately $270 million investment in a new, 100-mile, 345-kilovolt transmission project in northern Indiana. The project, one of 17 major new transmission system improvements reviewed and authorized by the Midwest Independent Transmission System Operator (MISO), is scheduled to be in service during the latter part of the decade. |
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| | • | | Significant environmental investments at NIPSCO’s coal-fired electric generation facilities remain on schedule, including construction of Flue Gas Desulfurization equipment on two units at the company's Schahfer generating station. The improvements, part of a nearly $850 million environmental investment program over the next six to eight years, will position NIPSCO to comply with emission standards recently issued by the U.S. Environmental Protection Agency. |
“From the successful completion of the electric rate case, to ongoing customer, environmental and economic development programs, NIPSCO is well positioned for significant, sustainable investment and growth in northern Indiana,” Skaggs noted. “Taken together, these efforts will strengthen system reliability, customer service and responsiveness, environmental and community quality, while providing stable ongoing earnings growth.”
Leveraging gas transmission and storage and midstream growth opportunities
NGT&S also continues to advance key strategies to enhance system reliability, develop new growth projects, and leverage the company's strategic footprint in emerging shale gas production areas.
| | • | | During 2011, NGT&S placed into service a number of strategic growth projects, primarily serving the Marcellus shale production area. These and other projects placed into service in previous years contributed over $30 million in additional demand revenues in 2011. |
| | • | | On the regulatory front, in November, the Federal Energy Regulatory Commission (FERC) approved the settlement ofColumbia Gulf Transmission’sOct 2010 base rate case. The settlement—effective as of May 2011—reflects updated costs and operating conditions, and will position the company to meet customer needs and earn a reasonable return on its investment. |
| | • | | NGT&S continues to develop a range of additional supply-driven growth initiatives, including mineral leasing, midstream projects and traditional pipeline expansion opportunities. One project in the later stages of development involves an approximately $145 million investment in 90 miles of pipeline facilities in western Pennsylvania supporting increased shale production. A major Marcellus shale producer will anchor the project, which is expected to have an initial capacity of approximately 300,000 dekatherms per day with interconnects with multiple interstate pipelines. A definitive agreement is anticipated by the end of the first quarter and the project is expected to be placed in service in late 2012. |
| | • | | Millennium Pipeline also is progressing on plans to add more than 12,000 horsepower of compression to its system in Orange County, NY, driven by increased shale production. Pending FERC approval, the new compressor station represents an investment of approximately $43 million. The project is anticipated to be in-service in Nov. 2012 and increase Millennium’s delivery capabilities at its interconnection with Algonquin Gas Transmission to 675,000 dekatherms per day. NiSource owns a 47.5 percent interest in Millennium. |
| | • | | Looking forward, NGT&S also is considering the possibility of a long-term system modernization program designed to enhance the reliability and flexibility of its infrastructure; respond to changing supply and market dynamics; and comply with developing pipeline safety and integrity requirements. In addition to numerous customer, environmental and economic development benefits, the multi-billion dollar program—which is in the early stages of development—would also support ongoing rate base and earnings growth. |
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“On the heels of solid progress and the addition of experienced, energized leadership in 2011, our NGT&S team is fully engaged with customers to develop and execute on a broad array of infrastructure enhancement and new growth opportunities,” Skaggs said. “Our NGT&S capital investment program for 2012 is approximately $430 million—an increase of 43 percent over 2011—reflecting a significant increase in accretive expansion projects capitalizing on the attractive opportunities available to NGT&S in the developing shale supply regions. These and other projects will serve to enhance the long-term value of our assets for the benefit of our customers, shareholders and other key stakeholders.”
Executing gas distribution infrastructure, customer and regulatory programs
Combining long-term infrastructure modernization programs with complementary customer programs and regulatory initiatives continues to be the focus at NGD.
| | • | | Infrastructure modernization and replacement projects continued across NGD as part of its $4 billion plus modernization program. In total during 2011, nearly $320 million was invested in modernization and replacement programs at NGD. |
| | • | | In November,Columbia Gas of Virginia received regulatory approval of its application for accelerated recovery of its infrastructure projects. Part of Virginia’s SAVE Act (Steps To Advance Virginia’s Energy Plan), the company plans to invest $100 million over the next five years on its infrastructure modernization program. |
| | • | | On the customer front, in December,Columbia Gas of Ohioreceived approval from the Public Utilities Commission of Ohio to extend and expand its energy efficiency programs for an additional five years, starting in 2012. Over the life of the proposed programs, COH estimates customers will save up to $300 million through reduced energy usage. Also in December, NIPSCO’s gas business received IURC approval of various existing and new customer energy efficiency programs through Nov. 2012. |
| | • | | As previously announced, the Pennsylvania Public Utility Commission issued a final order inColumbia Gas of Pennsylvania’sbase rate case on Oct. 14, which authorized an annual revenue increase of $17 million. The Commission also authorized a new residential rate design with a higher minimum monthly charge, including a fixed customer charge and usage allowance. |
“Our focus on infrastructure modernization at our utilities continues to benefit our customers and communities, as well as NiSource shareholders,” Skaggs said. “Our proactive, collaborative approach, combined with appropriate regulatory treatment, has served us well as we execute on this long-term core strategy.”
Earnings growth outlook continues with 2012 guidance of $1.40 to $1.50 per share
Based on the continued success of NiSource’s balanced business strategy and a deep inventory of investment opportunities across each of its business units, NiSource expects to deliver 2012 net operating earnings (non-GAAP) within a range of $1.40 to $1.50 per share, representing solid growth over 2011 results.
There will likely be differences between net operating earnings and GAAP earnings, but, due to the unpredictability of weather and other factors, NiSource is not providing GAAP earnings guidance.
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Skaggs noted that the company’s outlook continues to be driven by execution of its infrastructure-investment programs and is premised on a relatively modest and gradual economic recovery across the markets served by its utilities.
“With a growing inventory of infrastructure investment opportunities and a strong financial foundation to support a $1.4 billion capital investment program, NiSource is well-positioned to continue growing earnings and increasing shareholder value in 2012 and beyond,” Skaggs concluded. “Leveraging the momentum we have built over the past few years will enable NiSource to continue delivering on our financial commitments—a strong and secure dividend, stable investment-grade credit ratings and long-term, sustainable earnings growth.”
Full-Year 2011 Operating Earnings—Segment Results (non-GAAP)
NiSource’s consolidated operating earnings (non-GAAP) for the year ended Dec. 31, 2011, were $961.3 million, compared to $915.3 million in 2010. Refer to Schedule 2 for the items included in 2011 and 2010 GAAP operating income but excluded from operating earnings. Operating earnings for NiSource’s business segments for the full-year ended Dec. 31, 2011, are discussed below.
NiSource Gas Distribution reported operating earnings of $438.8 million compared to $342.6 million reported for the year ended Dec. 31, 2010. Net revenues, excluding the impact of regulatory trackers, increased $31.2 million primarily attributable to new rates under Columbia Gas of Ohio’s approved infrastructure replacement program and rate cases at other utilities. Additionally, there was an increase in residential and commercial margins. These increases were partially offset by a decrease in off-system sales and lower industrial margins.
Operating expenses, excluding the impact of trackers, were $65.0 million lower than the comparable period in the prior year primarily due to a reduction of approximately $75 million in depreciation costs as a result of reduced depreciation rates at NIPSCO. These decreases were partially offset by an increase in employee and administrative costs for the business segment.
NiSource Gas Transmission and Storagereported operating earnings of $360.1 million versus operating earnings of $376.8 million for the year ended Dec. 31, 2010. Net revenues, excluding trackers, increased $50.5 million primarily attributable to an increase in demand margin revenue as a result of growth projects placed into service in 2011 and throughout 2010, the impact of new Columbia Gulf rates placed into effect on May 1, 2011, and an increase in mineral rights royalty revenue. These increases were partially offset by the recognition of revenue in the prior year related to a previously deferred gain for native gas.
Operating expenses, excluding trackers, increased by $66.8 million primarily due to higher employee and administrative expenses, driven largely by pension contributions, increased environmental costs, higher software and separation costs. These increases were partially offset by a decrease in outside service costs.
Equity earnings decreased by $0.4 million for 2011 compared to 2010.
NiSource Electricreported operating earnings of $203.0 million for the year ended Dec. 31, 2011, compared with operating earnings of $217.0 million for the prior year period. Net revenues, excluding trackers, decreased by $0.6 million primarily due to decreased residential and commercial margins and lower environmental cost recovery rates partially offset by increased industrial usage and margins and lower revenue credits.
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Operating expenses, excluding trackers, increased by $13.4 million due primarily to an increase in employee and administrative expenses, higher outside service and rate case costs. These increases were partially offset by the costs incurred in the prior year related to an inventory write-off.
Corporate and Other Operations reported an operating earnings loss of $40.6 million for the year ended Dec. 31, 2011, compared to an operating earnings loss of $21.1 million for the year ended Dec. 31, 2010 due to a reserve on certain assets related to the wind down of the unregulated natural gas marketing business.
Other Items
Interest expense decreased by $15.5 million due to the repurchase of long-term debt in Nov. 2011 and Dec. 2010 and a long-term debt maturity in Nov. 2010. The benefits were partially offset by incremental interest expense associated with a swap maturity in Nov. 2010, the issuance of long-term debt in Nov. 2011, June 2011 and Dec. 2010, and higher average short-term borrowings and rates.
Other-net reflected expense of $7.3 million in 2011 compared to income of $3.8 million in 2010. The increase in expense is the result of additional charitable contributions in the current year.
The effective tax rate of net operating earnings was 34.5 percent compared to 35.8 percent for the same period last year.
Fourth Quarter 2011 Operating Earnings—Segment Results (non-GAAP)
NiSource’s consolidated fourth quarter 2011 operating earnings (non-GAAP) were $252.9 million, compared to $247.8 million for the same period in 2010. Refer to Schedule 2 for the items included in the fourth quarter 2011 and 2010 GAAP operating income but excluded from operating earnings. Operating earnings for NiSource’s business segments for the fourth quarter ended Dec. 31, 2011, are discussed below.
NiSource Gas Distributionreported operating earnings of $144.9 million versus operating earnings of $112.9 million in the fourth quarter of 2010. Net revenues, excluding the impact of regulatory and tax trackers, increased $15.0 million, primarily attributable to new rates under Columbia Gas of Ohio’s approved infrastructure replacement program and rate cases at other utilities. Additionally, there was an increase in residential and commercial margins.
Operating expenses, excluding trackers, were $17.0 million lower than the comparable period due to decreases in environmental costs and depreciation expenses. These decreases were partially offset by an increase in uncollectibles.
NiSource Gas Transmission and Storage reported operating earnings of $89.0 million versus operating earnings of $99.9 million in the fourth quarter of 2010. Net revenues, excluding the impact of regulatory trackers, increased $24.9 million, primarily attributable to an increase in demand margin revenue as a result of growth projects placed into service in 2011 and throughout 2010 and the impact of new Columbia Gulf rates placed into effect on May 1, 2011.
Operating expenses, excluding trackers, increased by $37.9 million primarily due to an increase in employee and administrative expenses, driven largely by pension contributions, and an increase in software costs. These increases were partially offset by a decrease in outside service costs and lower depreciation.
Equity earnings increased by $2.1 million primarily the result of an increase in earnings at Millennium Pipeline.
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NiSource Electric reported operating earnings of $43.0 million versus operating earnings of $43.4 million from the same quarter last year. Net revenues, excluding regulatory trackers, decreased $4.7 million compared to the prior year. The decrease was primarily the result of lower environmental cost recovery due primarily to a decrease in environmental spend.
Operating expenses decreased by $4.3 million, excluding trackers, due primarily to lower electric generation costs which were partially offset by increased outside service costs.
Corporate and Other Operations reported an operating earnings loss of $24.0 million in the fourth quarter of 2011 compared to an operating earnings loss of $8.4 million in 2010 due to a reserve on certain assets related to the wind down of the unregulated natural gas marketing business.
Other Items
Interest expense decreased by $0.6 million in 2011 compared to 2010 due to the change in long-term debt noted above.
Other-net reflected an expense of $12.8 million compared to $3.5 million in 2010. The change in expense was the result of an increase in charitable contributions in the current year.
The effective tax rate of net operating earnings was 36.3 percent compared to 36.2 percent for the same period last year.
Income from Continuing Operations (GAAP)
On a GAAP basis, NiSource reported income from continuing operations for the twelve months ended Dec. 31, 2011, of $303.8 million, or $1.08 per share, compared with $285.2 million, or $1.03 per share in 2010.
On a GAAP basis, NiSource reported income from continuing operations for the three months ended Dec. 31, 2011, of $17.6 million, or $0.06 per share, compared with $34.2 million, or $0.12 per share for the fourth quarter of 2010.
The NiSource GAAP results reflect certain non-material corrections to its consolidated financial statements as of Dec. 31, 2010 and for the three and twelve months ended Dec. 31, 2010. The effect of these non-material corrections was a decrease in income from continuing operations of $9.4 million or $0.03 per share for the year ended Dec. 31, 2010 and a decrease in income from continuing operations of $1.6 million or $0.01 per share for the three months ended Dec. 31, 2010.
On November 14, 2011, NiSource commenced a cash tender offer to repurchase up to $250.0 million aggregate principal amount of its outstanding 10.75% notes due 2016 and 6.15% notes due 2013. A condition of the offering was that all validly tendered 2016 notes would be accepted for purchase before any 2013 notes were accepted. On December 13, 2011, NiSource announced that approximately $125.3 million of the aggregate principal amount of its outstanding 10.75% notes due 2016 were validly tendered. Based upon the principal amount of the 2016 notes tendered, NiSource also repurchased $124.7 million of the 2013 notes. As a result of this tender offer, NiSource incurred $53.9 million in early redemption fees, primarily attributable to early redemption premiums and unamortized discounts and fees, which are recorded as a loss on the early extinguishment of long-term debt.
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During the fourth quarter of 2011, NiSource reviewed its current estimates for future environmental remediation costs related to the company’s manufactured gas plant (MGP) sites. Following the review, NiSource revised its estimates based on expected remediation activities and experience with similar facilities and recorded $35.5 million of expense at subsidiaries for which environmental expense is not probable of recovery from customers.
About NiSource
NiSource Inc. (NYSE: NI), based in Merrillville, Ind., is a Fortune 500 company engaged in natural gas transmission, storage and distribution, as well as electric generation, transmission and distribution. NiSource operating companies deliver energy to 3.8 million customers located within the high-demand energy corridor stretching from the Gulf Coast through the Midwest to New England. Information about NiSource and its subsidiaries is available via the Internet at www.nisource.com. NI-F
Forward-Looking Statements
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those statements include statements regarding the intent, belief or current expectations of NiSource and its management. Although NiSource believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Readers are cautioned that the forward-looking statements in this presentation are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following: weather; fluctuations in supply and demand for energy commodities; growth opportunities for NiSource’s businesses; increased competition in deregulated energy markets; the success of regulatory and commercial initiatives; dealings with third parties over whom NiSource has no control; the effectiveness of NiSource’s restructured outsourcing agreement; actual operating experience of NiSource’s assets; the regulatory process; regulatory and legislative changes; the impact of potential new environmental laws or regulations; the results of material litigation; changes in pension funding requirements; changes in general economic, capital and commodity market conditions; and counterparty credit risk and the matters set forth in the “Risk Factors” Section in NiSource’s 2010 Form 10-K and 2011 Forms 10-Q, many of which are risks 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 a duty to update any of the forward-looking statements contained in this release.
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NiSource Inc.
Consolidated Net Operating Earnings (Non-GAAP)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months | | | Twelve Months | |
| | | Ended December 31, | | | Ended December 31, | |
(in millions, except per share amounts) | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Net Revenues | | | | | | | | | | | | | | | | |
Gas Distribution | | $ | 730.9 | | | $ | 973.6 | | | $ | 2,927.6 | | | $ | 3,097.4 | |
Gas Transportation and Storage | | | 361.0 | | | | 355.9 | | | | 1,354.6 | | | | 1,261.4 | |
Electric | | | 329.6 | | | | 316.7 | | | | 1,420.2 | | | | 1,367.5 | |
Other | | | 29.2 | | | | 21.4 | | | | 92.5 | | | | 92.0 | |
| | | | | | | | | | | | | | | | |
Gross Revenues | | | 1,450.7 | | | | 1,667.6 | | | | 5,794.9 | | | | 5,818.3 | |
Cost of Sales (excluding depreciation and amortization) | | | 545.6 | | | | 752.3 | | | | 2,334.0 | | | | 2,379.2 | |
| | | | | | | | | | | | | | | | |
Total Net Revenues | | | 905.1 | | | | 915.3 | | | | 3,460.9 | | | | 3,439.1 | |
| | | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | |
Operation and maintenance | | | 406.0 | | | | 393.5 | | | | 1,488.5 | | | | 1,417.6 | |
Operation and maintenance—trackers | | | 43.3 | | | | 62.6 | | | | 194.3 | | | | 239.7 | |
Depreciation and amortization | | | 131.1 | | | | 138.8 | | | | 524.1 | | | | 584.7 | |
Depreciation and amortization—trackers | | | 3.4 | | | | 3.2 | | | | 14.1 | | | | 12.4 | |
Other taxes | | | 54.0 | | | | 48.5 | | | | 212.6 | | | | 207.1 | |
Other taxes—trackers | | | 20.2 | | | | 24.6 | | | | 80.6 | | | | 77.3 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 658.0 | | | | 671.2 | | | | 2,514.2 | | | | 2,538.8 | |
| | | | | | | | | | | | | | | | |
Equity Earnings in Unconsolidated Affiliates | | | 5.8 | | | | 3.7 | | | | 14.6 | | | | 15.0 | |
| | | | | | | | | | | | | | | | |
Operating Earnings | | | 252.9 | | | | 247.8 | | | | 961.3 | | | | 915.3 | |
| | | | | | | | | | | | | | | | |
Other Income (Deductions) | | | | | | | | | | | | | | | | |
Interest expense, net | | | (96.9 | ) | | | (97.5 | ) | | | (376.8 | ) | | | (392.3 | ) |
Other, net | | | (12.8 | ) | | | (3.5 | ) | | | (7.3 | ) | | | 3.8 | |
| | | | | | | | | | | | | | | | |
Total Other Deductions | | | (109.7 | ) | | | (101.0 | ) | | | (384.1 | ) | | | (388.5 | ) |
| | | | | | | | | | | | | | | | |
Operating Earnings From Continuing Operations | | | | | | | | | | | | | | | | |
Before Income Taxes | | | 143.2 | | | | 146.8 | | | | 577.2 | | | | 526.8 | |
Income Taxes | | | 52.0 | | | | 53.2 | | | | 199.4 | | | | 188.6 | |
| | | | | | | | | | | | | | | | |
Net Operating Earnings from Continuing Operations | | | 91.2 | | | | 93.6 | | | | 377.8 | | | | 338.2 | |
| | | | | | | | | | | | | | | | |
GAAP Adjustment | | | (73.6 | ) | | | (59.4 | ) | | | (74.0 | ) | | | (53.0 | ) |
| | | | | | | | | | | | | | | | |
GAAP Income from Continuing Operations | | $ | 17.6 | | | $ | 34.2 | | | $ | 303.8 | | | $ | 285.2 | |
| | | | | | | | | | | | | | | | |
Basic Net Operating Earnings Per Share from Continuing Operations | | | 0.32 | | | | 0.33 | | | | 1.35 | | | | 1.22 | |
| | | | | | | | | | | | | | | | |
GAAP Basic Earnings Per Share from Continuing Operations | | | 0.06 | | | | 0.12 | | | | 1.08 | | | | 1.03 | |
| | | | | | | | | | | | | | | | |
Basic Average Common Shares Outstanding | | | 281.4 | | | | 278.6 | | | | 280.4 | | | | 277.8 | |
| | | | | | | | | | | | | | | | |
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NiSource Inc.
Segment Operating Earnings (Non-GAAP)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months | | | Twelve Months | |
| Gas Distribution Operations | | Ended December 31, | | | Ended December 31, | |
(in millions) | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Net Revenues | | | | | | | | | | | | |
Sales Revenues | | $ | 877.0 | | | $ | 1,123.4 | | | $ | 3,508.4 | | | $ | 3,677.2 | |
Less: Cost of gas sold | | | 443.8 | | | | 679.8 | | | | 1,917.4 | | | | 2,065.6 | |
| | | | | | | | | | | | | | | | |
Net Revenues | | | 433.2 | | | | 443.6 | | | | 1,591.0 | | | | 1,611.6 | |
| | | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | |
Operation and maintenance | | | 178.6 | | | | 192.1 | | | | 694.5 | | | | 699.1 | |
Operation and maintenance—trackers | | | 23.6 | | | | 44.6 | | | | 115.7 | | | | 170.8 | |
Depreciation and amortization | | | 43.6 | | | | 49.5 | | | | 174.0 | | | | 239.3 | |
Other taxes | | | 22.3 | | | | 19.9 | | | | 87.4 | | | | 82.5 | |
Other taxes—trackers | | | 20.2 | | | | 24.6 | | | | 80.6 | | | | 77.3 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 288.3 | | | | 330.7 | | | | 1,152.2 | | | | 1,269.0 | |
| | | | | | | | | | | | | | | | |
Operating Earnings | | $ | 144.9 | | | $ | 112.9 | | | $ | 438.8 | | | $ | 342.6 | |
| | | | | | | | | | | | | | | | |
GAAP Adjustment | | | (48.2 | ) | | | 8.6 | | | | (46.0 | ) | | | (10.3 | ) |
| | | | | | | | | | | | | | | | |
GAAP Operating Income | | $ | 96.7 | | | $ | 121.5 | | | $ | 392.8 | | | $ | 332.3 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Three Months | | | Twelve Months | |
| Gas Transmission and Storage Operations | | Ended December 31, | | | Ended December 31, | |
(in millions) | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Net Revenues | | | | | | | | | | | | |
Transportation revenues | | $ | 222.6 | | | $ | 205.8 | | | $ | 776.7 | | | $ | 728.4 | |
Storage revenues | | | 48.1 | | | | 49.7 | | | | 196.1 | | | | 198.7 | |
Other revenues | | | 12.6 | | | | 2.3 | | | | 32.8 | | | | 22.1 | |
| | | | | | | | | | | | | | | | |
Net Operating Revenues | | | 283.3 | | | | 257.8 | | | | 1,005.6 | | | | 949.2 | |
| | | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | |
Operation and maintenance | | | 137.1 | | | | 96.5 | | | | 407.7 | | | | 339.4 | |
Operation and maintenance—trackers | | | 16.3 | | | | 15.7 | | | | 65.8 | | | | 59.9 | |
Depreciation and amortization | | | 31.9 | | | | 35.8 | | | | 130.0 | | | | 130.7 | |
Other taxes | | | 14.8 | | | | 13.6 | | | | 56.6 | | | | 57.4 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 200.1 | | | | 161.6 | | | | 660.1 | | | | 587.4 | |
| | | | | | | | | | | | | | | | |
Equity Earnings in Unconsolidated Affiliates | | | 5.8 | | | | 3.7 | | | | 14.6 | | | | 15.0 | |
| | | | | | | | | | | | | | | | |
Operating Earnings | | $ | 89.0 | | | $ | 99.9 | | | $ | 360.1 | | | $ | 376.8 | |
| | | | | | | | | | | | | | | | |
GAAP Adjustment | | | (0.1 | ) | | | 0.1 | | | | (0.1 | ) | | | (0.2 | ) |
| | | | | | | | | | | | | | | | |
GAAP Operating Income | | $ | 88.9 | | | $ | 100.0 | | | $ | 360.0 | | | $ | 376.6 | |
| | | | | | | | | | | | | | | | |
10
NiSource Inc.
Segment Operating Earnings (Non-GAAP)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months | | | Twelve Months | |
| Electric Operations | | Ended December 31, | | | Ended December 31, | |
(in millions) | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Net Revenues | | | | | | | | | | | | | | | | |
Sales revenues | | $ | 332.1 | | | $ | 331.5 | | | $ | 1,428.4 | | | $ | 1,383.0 | |
Less: Cost of sales | | | 122.5 | | | | 118.4 | | | | 548.8 | | | | 508.3 | |
| | | | | | | | | | | | | | | | |
Net Revenues | | | 209.6 | | | | 213.1 | | | | 879.6 | | | | 874.7 | |
| | | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | |
Operation and maintenance | | | 96.1 | | | | 101.3 | | | | 392.6 | | | | 378.3 | |
Operation and maintenance—trackers | | | 3.3 | | | | 2.3 | | | | 12.8 | | | | 9.0 | |
Depreciation and amortization | | | 49.9 | | | | 49.0 | | | | 200.6 | | | | 199.4 | |
Depreciation and amortization—trackers | | | 3.4 | | | | 3.2 | | | | 14.1 | | | | 12.4 | |
Other taxes | | | 13.9 | | | | 13.9 | | | | 56.5 | | | | 58.6 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 166.6 | | | | 169.7 | | | | 676.6 | | | | 657.7 | |
| | | | | | | | | | | | | | | | |
Operating Earnings | | $ | 43.0 | | | $ | 43.4 | | | $ | 203.0 | | | $ | 217.0 | |
| | | | | | | | | | | | | | | | |
GAAP Adjustment | | | (3.2 | ) | | | (0.9 | ) | | | 6.5 | | | | 3.8 | |
| | | | | | | | | | | | | | | | |
GAAP Operating Income | | $ | 39.8 | | | $ | 42.5 | | | $ | 209.5 | | | $ | 220.8 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Three Months | | | Twelve Months | |
| Corporate and Other Operations | | Ended December 31, | | | Ended December 31, | |
(in millions) | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Operating Loss | | $ | (24.0 | ) | | $ | (8.4 | ) | | $ | (40.6 | ) | | $ | (21.1 | ) |
| | | | | | | | | | | | | | | | |
GAAP Adjustment | | | (15.6 | ) | | | (2.9 | ) | | | (16.6 | ) | | | (2.9 | ) |
| | | | | | | | | | | | | | | | |
GAAP Operating Loss | | $ | (39.6 | ) | | $ | (11.3 | ) | | $ | (57.2 | ) | | $ | (24.0 | ) |
| | | | | | | | | | | | | | | | |
11
NiSource Inc.
Segment Volumes and Statistical Data
| | | | | | | | | | | | | | | | |
| | | Three Months
Ended December 31, | | | Twelve Months Ended
December 31, | |
Gas Distribution Operations | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Sales and Transportation (MMDth) | | | | | | | | | | | | | | | | |
Residential | | | 72.6 | | | | 87.8 | | | | 254.5 | | | | 258.0 | |
Commercial | | | 46.7 | | | | 51.7 | | | | 168.6 | | | | 166.8 | |
Industrial | | | 109.5 | | | | 101.7 | | | | 431.8 | | | | 385.9 | |
Off System | | | 10.2 | | | | 15.1 | | | | 62.4 | | | | 71.9 | |
Other | | | 0.1 | | | | 0.1 | | | | 0.6 | | | | 1.0 | |
| | | | | | | | | | | | | | | | |
Total | | | 239.1 | | | | 256.4 | | | | 917.9 | | | | 883.6 | |
| | | | | | | | | | | | | | | | |
Weather Adjustment | | | 18.1 | | | | (9.4 | ) | | | 12.7 | | | | 5.1 | |
| | | | | | | | | | | | | | | | |
Sales and Transportation Volumes—Excluding Weather | | | 257.2 | | | | 247.0 | | | | 930.6 | | | | 888.7 | |
| | | | | | | | | | | | | | | | |
Heating Degree Days | | | 1,742 | | | | 2,177 | | | | 5,434 | | | | 5,547 | |
Normal Heating Degree Days | | | 2,037 | | | | 2,037 | | | | 5,633 | | | | 5,633 | |
% Colder (Warmer) than Normal | | | (14 | %) | | | 7 | % | | | (4 | %) | | | (2 | %) |
Customers | | | | | | | | | | | | | | | | |
Residential | | | | | | | | | | | 3,039,579 | | | | 3,039,874 | |
Commercial | | | | | | | | | | | 280,521 | | | | 281,473 | |
Industrial | | | | | | | | | | | 7,861 | | | | 7,668 | |
Other | | | | | | | | | | | 19 | | | | 65 | |
| | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | 3,327,980 | | | | 3,329,080 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Three Months
Ended December 31, | | | Twelve Months Ended
December 31, | |
Gas Transmission and Storage Operations | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Throughput (MMDth) | | | | | | | | | | | | | | | | |
Columbia Transmission | | | 301.4 | | | | 342.3 | | | | 1,117.5 | | | | 1,092.4 | |
Columbia Gulf | | | 270.6 | | | | 223.4 | | | | 1,048.0 | | | | 848.4 | |
Crossroads Gas Pipeline | | | 4.0 | | | | 5.2 | | | | 18.7 | | | | 25.4 | |
Intrasegment eliminations | | | (124.0 | ) | | | (145.5 | ) | | | (548.5 | ) | | | (568.7 | ) |
| | | | | | | | | | | | | | | | |
Total | | | 452.0 | | | | 425.4 | | | | 1,635.7 | | | | 1,397.5 | |
| | | | | | | | | | | | | | | | |
12
NiSource Inc.
Segment Volumes and Statistical Data
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31, | | | Twelve Months Ended
December 31, | |
Electric Operations | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Sales (Gigawatt Hours) | | | | | | | | | | | | | | | | |
Residential | | | 765.6 | | | | 792.4 | | | | 3,526.5 | | | | 3,625.6 | |
Commercial | | | 931.3 | | | | 928.8 | | | | 3,886.5 | | | | 3,919.9 | |
Industrial | | | 2,247.5 | | | | 2,137.2 | | | | 9,257.6 | | | | 8,459.0 | |
Wholesale | | | 144.4 | | | | 181.4 | | | | 651.6 | | | | 817.1 | |
Other | | | 44.2 | | | | 58.2 | | | | 165.5 | | | | 186.4 | |
| | | | | | | | | | | | | | | | |
Total | | | 4,133.0 | | | | 4,098.0 | | | | 17,487.7 | | | | 17,008.0 | |
| | | | | | | | | | | | | | | | |
Weather Adjustment | | | 31.1 | | | | (15.8 | ) | | | (101.1 | ) | | | (174.1 | ) |
| | | | | | | | | | | | | | | | |
Sales Volumes—Excluding Weather impacts | | | 4,164.1 | | | | 4,082.2 | | | | 17,386.6 | | | | 16,833.9 | |
| | | | | | | | | | | | | | | | |
Cooling Degree Days | | | | | | | | | | | 907 | | | | 977 | |
Normal Cooling Degree Days | | | | | | | | | | | 808 | | | | 808 | |
% Warmer (Colder) than Normal | | | | | | | | | | | 12 | % | | | 21 | % |
Electric Customers | | | | | | | | | | | | | | | | |
Residential | | | | | | | | | | | 400,567 | | | | 400,522 | |
Commercial | | | | | | | | | | | 54,029 | | | | 53,877 | |
Industrial | | | | | | | | | | | 2,405 | | | | 2,432 | |
Wholesale | | | | | | | | | | | 17 | | | | 15 | |
Other | | | | | | | | | | | 737 | | | | 740 | |
| | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | 457,755 | | | | 457,586 | |
| | | | | | | | | | | | | | | | |
13
NiSource Inc.
Schedule 1—Reconciliation of Net Operating Earnings to GAAP
| | | | | | | | | | | | | | | | |
| | | Three Months | | | Twelve Months | |
| | | Ended December 31, | | | Ended December 31, | |
(in millions, except per share amounts) | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Net Operating Earnings from Continuing Operations (Non-GAAP) | | $ | 91.2 | | | $ | 93.6 | | | $ | 377.8 | | | $ | 338.2 | |
| | | | | | | | | | | | | | | | |
Items excluded from operating earnings: | | | | | | | | | | | | | | | | |
Net Revenues: | | | | | | | | | | | | | | | | |
Weather—compared to normal | | | (14.4 | ) | | | 9.7 | | | | (2.1 | ) | | | 8.4 | |
Revenue adjustment | | | (0.6 | ) | | | (2.1 | ) | | | (0.6 | ) | | | (13.1 | ) |
Unregulated natural gas marketing business | | | 0.5 | | | | 0.4 | | | | 4.5 | | | | 6.2 | |
| | | | |
Operating Expenses: | | | | | | | | | | | | | | | | |
Restructuring | | | — | | | | — | | | | — | | | | (0.7 | ) |
Environmental MGP remediation review | | | (35.5 | ) | | | — | | | | (35.5 | ) | | | — | |
Unregulated natural gas marketing business | | | (1.2 | ) | | | (2.6 | ) | | | (5.6 | ) | | | (8.5 | ) |
Loss on sale of assets and asset impairments | | | (15.9 | ) | | | (0.5 | ) | | | (16.9 | ) | | | (1.9 | ) |
| | | | | | | | | | | | | | | | |
Total items excluded from operating earnings | | | (67.1 | ) | | | 4.9 | | | | (56.2 | ) | | | (9.6 | ) |
| | | | | | | | | | | | | | | | |
Loss on early extinguishment of debt | | | (53.9 | ) | | | (96.7 | ) | | | (53.9 | ) | | | (96.7 | ) |
| | | | | | | | | | | | | | | | |
Tax effect of above items | | | 47.4 | | | | 36.3 | | | | 42.9 | | | | 42.0 | |
| | | | | | | | | | | | | | | | |
Income Taxes—Tax method / rate changes | | | — | | | | (3.9 | ) | | | (6.8 | ) | | | (3.9 | ) |
Income Taxes—Rate settlement flow-through | | | — | | | | — | | | | — | | | | 15.2 | |
| | | | | | | | | | | | | | | | |
| | | | |
Total items excluded from net operating earnings | | | (73.6 | ) | | | (59.4 | ) | | | (74.0 | ) | | | (53.0 | ) |
| | | | | | | | | | | | | | | | |
Reported Income from Continuing Operations—GAAP | | $ | 17.6 | | | $ | 34.2 | | | $ | 303.8 | | | $ | 285.2 | |
| | | | | | | | | | | | | | | | |
Basic Average Common Shares Outstanding | | | 281.4 | | | | 278.6 | | | | 280.4 | | | | 277.8 | |
| | | | | | | | | | | | | | | | |
Basic Net Operating Earnings Per Share from Continuing Operations | | $ | 0.32 | | | $ | 0.33 | | | $ | 1.35 | | | $ | 1.22 | |
| | | | | | | | | | | | | | | | |
Items excluded from net operating earnings (after-tax) | | | (0.26 | ) | | | (0.21 | ) | | | (0.27 | ) | | | (0.19 | ) |
| | | | | | | | | | | | | | | | |
GAAP Basic Earnings Per Share from Continuing Operations | | $ | 0.06 | | | $ | 0.12 | | | $ | 1.08 | | | $ | 1.03 | |
| | | | | | | | | | | | | | | | |
14
NiSource Inc.
Schedule 2—Adjustments by Segment from Operating Earnings to GAAP
For Quarter ended December 31,
| | | | | | | | | | | | | | | | | | | | |
2011 (in millions) | |
| | | Gas
Distribution | | | Gas
Transmission
and Storage | | | Electric | | | Corporate
& Other | | | Total | |
Operating Earnings (Loss) | | $ | 144.9 | | | $ | 89.0 | | | $ | 43.0 | | | $ | (24.0 | ) | | $ | 252.9 | |
Net Revenues: | | | | | | | | | | | | | | | | | | | | |
Weather (compared to normal) | | | (12.1 | ) | | | — | | | | (2.3 | ) | | | — | | | | (14.4 | ) |
Revenue sales adjustment | | | — | | | | — | | | | (0.6 | ) | | | — | | | | (0.6 | ) |
Unregulated natural gas marketing business | | | — | | | | — | | | | — | | | | 0.5 | | | | 0.5 | |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Net Revenues | | | (12.1 | ) | | | — | | | | (2.9 | ) | | | 0.5 | | | | (14.5 | ) |
| | | | | |
Operating Expenses | | | | | | | | | | | | | | | | | | | | |
Environmental MGP remediation review | | | (35.5 | ) | | | — | | | | — | | | | — | | | | (35.5 | ) |
Unregulated natural gas marketing business | | | — | | | | — | | | | — | | | | (1.2 | ) | | | (1.2 | ) |
Loss on sale of assets and asset impairments | | | (0.6 | ) | | | (0.1 | ) | | | (0.3 | ) | | | (14.9 | ) | | | (15.9 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Operating Expenses | | | (36.1 | ) | | | (0.1 | ) | | | (0.3 | ) | | | (16.1 | ) | | | (52.6 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Operating Income (Loss) | | $ | (48.2 | ) | | $ | (0.1 | ) | | $ | (3.2 | ) | | $ | (15.6 | ) | | $ | (67.1 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating Income (Loss)—GAAP | | $ | 96.7 | | | $ | 88.9 | | | $ | 39.8 | | | $ | (39.6 | ) | | $ | 185.8 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
2010 (in millions) | |
| | | Gas
Distribution | | | Gas
Transmission
and Storage | | | Electric | | | Corporate
& Other | | | Total | |
Operating Earnings (Loss) | | $ | 112.9 | | | $ | 99.9 | | | $ | 43.4 | | | $ | (8.4 | ) | | $ | 247.8 | |
Net Revenues: | | | | | | | | | | | | | | | | | | | | |
Weather (compared to normal) | | | 8.6 | | | | — | | | | 1.1 | | | | — | | | | 9.7 | |
Revenue adjustment | | | — | | | | — | | | | (2.1 | ) | | | — | | | | (2.1 | ) |
Unregulated natural gas marketing business | | | — | | | | — | | | | — | | | | 0.4 | | | | 0.4 | |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Net Revenues | | | 8.6 | | | | — | | | | (1.0 | ) | | | 0.4 | | | | 8.0 | |
| | | | | |
Operating Expenses | | | | | | | | | | | | | | | | | | | | |
Unregulated natural gas marketing business | | | — | | | | — | | | | — | | | | (2.6 | ) | | | (2.6 | ) |
Gain/(Loss) on sale of assets and asset impairments | | | — | | | | 0.1 | | | | 0.1 | | | | (0.7 | ) | | | (0.5 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Operating Expenses | | | — | | | | 0.1 | | | | 0.1 | | | | (3.3 | ) | | | (3.1 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Operating Income (Loss) | | $ | 8.6 | | | $ | 0.1 | | | $ | (0.9 | ) | | $ | (2.9 | ) | | $ | 4.9 | |
| | | | | | | | | | | | | | | | | | | | |
Operating Income (Loss)—GAAP | | $ | 121.5 | | | $ | 100.0 | | | $ | 42.5 | | | $ | (11.3 | ) | | $ | 252.7 | |
| | | | | | | | | | | | | | | | | | | | |
15
NiSource Inc.
Schedule 2—Adjustments by Segment from Operating Earnings to GAAP
For Quarter ended December 31,
| | | | | | | | | | | | | | | | | | | | |
2011 (in millions) | |
| | | Gas
Distribution | | | Gas
Transmission
and Storage | | | Electric | | | Corporate
and Other | | | Total | |
Operating Earnings (Loss) | | $ | 438.8 | | | $ | 360.1 | | | $ | 203.0 | | | $ | (40.6 | ) | | $ | 961.3 | |
Net Revenues: | | | | | | | | | | | | | | | | | | | | |
Weather (compared to normal) | | | (9.7 | ) | | | — | | | | 7.6 | | | | — | | | | (2.1 | ) |
Revenue sales adjustment | | | — | | | | — | | | | (0.6 | ) | | | — | | | | (0.6 | ) |
Unregulated natural gas marketing business | | | — | | | | — | | | | — | | | | 4.5 | | | | 4.5 | |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Net Revenues | | | (9.7 | ) | | | — | | | | 7.0 | | | | 4.5 | | | | 1.8 | |
| | | | | |
Operating Expenses | | | | | | | | | | | | | | | | | | | | |
Environmental MGP remediation review | | | (35.5 | ) | | | — | | | | — | | | | — | | | | (35.5 | ) |
Unregulated natural gas marketing business | | | — | | | | — | | | | — | | | | (5.6 | ) | | | (5.6 | ) |
Loss on sale of assets and asset impairments | | | (0.8 | ) | | | (0.1 | ) | | | (0.5 | ) | | | (15.5 | ) | | | (16.9 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Operating Expenses | | | (36.3 | ) | | | (0.1 | ) | | | (0.5 | ) | | | (21.1 | ) | | | (58.0 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Operating (Loss) Income | | $ | (46.0 | ) | | $ | (0.1 | ) | | $ | 6.5 | | | $ | (16.6 | ) | | $ | (56.2 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating Income (Loss)—GAAP | | $ | 392.8 | | | $ | 360.0 | | | $ | 209.5 | | | $ | (57.2 | ) | | $ | 905.1 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
2010 (in millions) | |
| | | Gas
Distribution | | | Gas
Transmission
and Storage | | | Electric | | | Corporate
and Other | | | Total | |
Operating Earnings (Loss) | | $ | 342.6 | | | $ | 376.8 | | | $ | 217.0 | | | $ | (21.1 | ) | | $ | 915.3 | |
Net Revenues: | | | | | | | | | | | | | | | | | | | | |
Weather (compared to normal) | | | (3.4 | ) | | | — | | | | 11.8 | | | | — | | | | 8.4 | |
Revenue adjustment | | | (5.7 | ) | | | — | | | | (7.4 | ) | | | — | | | | (13.1 | ) |
Unregulated natural gas marketing business | | | — | | | | — | | | | — | | | | 6.2 | | | | 6.2 | |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Net Revenues | | | (9.1 | ) | | | — | | | | 4.4 | | | | 6.2 | | | | 1.5 | |
| | | | | |
Operating Expenses | | | | | | | | | | | | | | | | | | | | |
Restructuring | | | (0.2 | ) | | | — | | | | (0.5 | ) | | | — | | | | (0.7 | ) |
Unregulated natural gas marketing business | | | — | | | | — | | | | — | | | | (8.5 | ) | | | (8.5 | ) |
Loss on sale of assets and asset impairments | | | (1.0 | ) | | | (0.2 | ) | | | (0.1 | ) | | | (0.6 | ) | | | (1.9 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Operating Expenses | | | (1.2 | ) | | | (0.2 | ) | | | (0.6 | ) | | | (9.1 | ) | | | (11.1 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Impact—Operating( Loss) Income | | $ | (10.3 | ) | | $ | (0.2 | ) | | $ | 3.8 | | | $ | (2.9 | ) | | $ | (9.6 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating Income (Loss)—GAAP | | $ | 332.3 | | | $ | 376.6 | | | $ | 220.8 | | | $ | (24.0 | ) | | $ | 905.7 | |
| | | | | | | | | | | | | | | | | | | | |
16
NiSource Inc.
Consolidated Income Statements (GAAP) (unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31, | | | Twelve Months Ended
December 31, | |
(in millions, except per share amounts) | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Net Revenues | | | | | | | | | | | | | | | | |
Gas Distribution | | $ | 718.8 | | | $ | 971.6 | | | $ | 2,917.9 | | | $ | 3,094.0 | |
Gas Transmission and Storage | | | 361.0 | | | | 355.9 | | | | 1,354.6 | | | | 1,261.4 | |
Electric | | | 327.3 | | | | 328.5 | | | | 1,427.7 | | | | 1,379.3 | |
Other | | | 83.4 | | | | 96.0 | | | | 318.9 | | | | 679.9 | |
| | | | | | | | | | | | | | | | |
Gross Revenues | | | 1,490.5 | | | | 1,752.0 | | | | 6,019.1 | | | | 6,414.6 | |
Cost of Sales (excluding depreciation and amortization) | | | 599.9 | | | | 828.7 | | | | 2,556.4 | | | | 2,974.1 | |
| | | | | | | | | | | | | | | | |
Total Net Revenues | | | 890.6 | | | | 923.3 | | | | 3,462.7 | | | | 3,440.5 | |
| | | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | |
Operation and maintenance | | | 485.7 | | | | 457.5 | | | | 1,722.5 | | | | 1,663.3 | |
Depreciations and amortization | | | 134.5 | | | | 142.0 | | | | 538.2 | | | | 597.1 | |
Impairment and loss on sale of assets, net | | | 15.7 | | | | 0.8 | | | | 16.8 | | | | 2.0 | |
Other taxes | | | 74.7 | | | | 74.0 | | | | 294.7 | | | | 287.4 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 710.6 | | | | 674.3 | | | | 2,572.2 | | | | 2,549.8 | |
| | | | | | | | | | | | | | | | |
Equity Earnings in Unconsolidated Affiliates | | | 5.8 | | | | 3.7 | | | | 14.6 | | | | 15.0 | |
| | | | | | | | | | | | | | | | |
Operating Income | | | 185.8 | | | | 252.7 | | | | 905.1 | | | | 905.7 | |
| | | | | | | | | | | | | | | | |
Other Income (Deductions) | | | | | | | | | | | | | | | | |
Interest expense, net | | | (96.9 | ) | | | (97.5 | ) | | | (376.8 | ) | | | (392.3 | ) |
Loss on early extinguishment of long-term debt | | | (53.9 | ) | | | (96.7 | ) | | | (53.9 | ) | | | (96.7 | ) |
Other, net | | | (12.8 | ) | | | (3.5 | ) | | | (7.3 | ) | | | 3.8 | |
| | | | | | | | | | | | | | | | |
Total Other Income (Deductions) | | | (163.6 | ) | | | (197.7 | ) | | | (438.0 | ) | | | (485.2 | ) |
| | | | | | | | | | | | | | | | |
Income From Continuing Operations Before Income Taxes | | | 22.2 | | | | 55.0 | | | | 467.1 | | | | 420.5 | |
Income Taxes | | | 4.6 | | | | 20.8 | | | | 163.3 | | | | 135.3 | |
| | | | | | | | | | | | | | | | |
Income from Continuing Operations | | | 17.6 | | | | 34.2 | | | | 303.8 | | | | 285.2 | |
| | | | | | | | | | | | | | | | |
(Loss) Gain from Discontinued Operations—net of taxes | | | (2.9 | ) | | | (2.4 | ) | | | (4.7 | ) | | | (2.7 | ) |
Gain (Loss) on sale of Discontinued Operations—net of taxes | | | — | | | | — | | | | — | | | | 0.1 | |
| | | | | | | | | | | | | | | | |
Net Income | | $ | 14.7 | | | $ | 31.8 | | | $ | 299.1 | | | $ | 282.6 | |
| | | | | | | | | | | | | | | | |
| | | | |
Basic Earnings Per Share | | | | | | | | | | | | | | | | |
Continuing Operations | | $ | 0.06 | | | $ | 0.12 | | | $ | 1.08 | | | $ | 1.03 | |
Discontinued Operations | | | (0.01 | ) | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | |
Basic Earnings Per Share | | $ | 0.05 | | | $ | 0.11 | | | $ | 1.06 | | | $ | 1.02 | |
| | | | | | | | | | | | | | | | |
Diluted Earnings Per Share | | | | | | | | | | | | | | | | |
Continuing Operations | | $ | 0.06 | | | $ | 0.11 | | | $ | 1.05 | | | $ | 1.02 | |
Discontinued Operations | | | (0.01 | ) | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | |
Diluted Earnings Per Share | | $ | 0.05 | | | $ | 0.10 | | | $ | 1.03 | | | $ | 1.01 | |
| | | | | | | | | | | | | | | | |
Dividends Declared Per Common Share | | $ | 0.23 | | | $ | 0.23 | | | $ | 0.92 | | | $ | 0.92 | |
| | | | | | | | | | | | | | | | |
Basic Average Common Shares Outstanding | | | 281.4 | | | | 278.6 | | | | 280.4 | | | | 277.8 | |
Diluted Average Common Shares | | | 291.1 | | | | 282.6 | | | | 288.5 | | | | 280.1 | |
| | | | | | | | | | | | | | | | |
17
NiSource Inc.
Consolidated Income Statements (GAAP) (unaudited)
| | | | | | | | |
(in millions) | | December 31,
2011 | | | December 31,
2010 | |
ASSETS | | | | | | | | |
Property, Plant and Equipment | | | | | | | | |
Utility Plant | | $ | 20,337.8 | | | $ | 19,494.9 | |
Accumulated depreciation and amortization | | | (8,670.2 | ) | | | (8,492.6 | ) |
| | | | | | | | |
Net utility plant | | | 11,667.6 | | | | 11,002.3 | |
| | | | | | | | |
Other property, at cost, less accumulated depreciation | | | 132.5 | | | | 94.7 | |
| | | | | | | | |
Net Property, Plant and Equipment | | | 11,800.1 | | | | 11,097.0 | |
| | | | | | | | |
Investments and Other Assets | | | | | | | | |
Assets of discontinued operations and assets held for sale | | | 0.2 | | | | 7.9 | |
Unconsolidated affiliates | | | 204.7 | | | | 200.9 | |
Other investments | | | 150.9 | | | | 139.7 | |
| | | | | | | | |
Total Investments and Other Assets | | | 355.8 | | | | 348.5 | |
| | | | | | | | |
Current Assets | | | | | | | | |
Cash and cash equivalents | | | 11.5 | | | | 9.2 | |
Restricted cash | | | 160.6 | | | | 202.9 | |
Accounts receivable (less reserve of $30.5 and $37.4, respectively) | | | 854.8 | | | | 1,079.3 | |
Income tax receivable | | | 0.9 | | | | 99.0 | |
Gas inventory | | | 427.6 | | | | 298.2 | |
Underrecovered gas and fuel costs | | | 20.7 | | | | 120.7 | |
Materials and supplies, at average cost | | | 87.6 | | | | 83.8 | |
Electric production fuel, at average cost | | | 50.9 | | | | 46.0 | |
Price risk management assets | | | 137.2 | | | | 159.5 | |
Exchange gas receivable | | | 64.9 | | | | 62.7 | |
Regulatory assets | | | 169.7 | | | | 143.8 | |
Prepayments and other | | | 261.8 | | | | 120.8 | |
| | | | | | | | |
Total Current Assets | | | 2,248.2 | | | | 2,425.9 | |
| | | | | | | | |
Other Assets | | | | | | | | |
Price risk management assets | | | 188.7 | | | | 240.3 | |
Regulatory assets | | | 1,978.2 | | | | 1,648.0 | |
Goodwill | | | 3,677.3 | | | | 3,677.3 | |
Intangible assets | | | 297.6 | | | | 308.6 | |
Postretirement and postemployment benefits assets | | | 31.5 | | | | 35.1 | |
Deferred charges and other | | | 130.9 | | | | 132.7 | |
| | | | | | | | |
Total Other Assets | | | 6,304.2 | | | | 6,042.0 | |
| | | | | | | | |
Total Assets | | $ | 20,708.3 | | | $ | 19,913.4 | |
| | | | | | | | |
18
NiSource Inc.
Consolidated Balance Sheets (GAAP) (unaudited) (continued)
| | | | | | | | |
(in millions, except share amounts) | | December 31,
2011 | | | December 31,
2010 | |
CAPITALIZATION AND LIABILITIES | | | | | | | | |
Capitalization | | | | | | | | |
Common Stockholders’ Equity | | | | | | | | |
Common stock—$0.01 par value, 400,000,000 shares authorized; 281,853,571 and 278,855,291 shares issued and outstanding, respectively | | $ | 2.8 | | | $ | 2.8 | |
Additional paid-in capital | | | 4,167.7 | | | | 4,103.9 | |
Retained earnings | | | 917.0 | | | | 876.1 | |
Accumulated other comprehensive loss | | | (59.7 | ) | | | (57.9 | ) |
Treasury stock | | | (30.5 | ) | | | (27.4 | ) |
| | | | | | | | |
Total Common Stockholders’ Equity | | | 4,997.3 | | | | 4,897.5 | |
Long-term debt, excluding amounts due within one year | | | 6,267.1 | | | | 5,936.1 | |
| | | | | | | | |
Total Capitalization | | | 11,264.4 | | | | 10,833.6 | |
| | | | | | | | |
Current Liabilities | | | | | | | | |
Current portion of long-term debt | | | 327.3 | | | | 34.2 | |
Short-term borrowings | | | 1,359.4 | | | | 1,382.5 | |
Accounts payable | | | 434.8 | | | | 581.8 | |
Dividends payable | | | — | | | | 0.1 | |
Customer deposits and credits | | | 313.6 | | | | 318.1 | |
Taxes accrued | | | 220.9 | | | | 221.1 | |
Interest accrued | | | 111.9 | | | | 114.4 | |
Overrecovered gas and fuel costs | | | 48.9 | | | | 21.4 | |
Price risk management liabilities | | | 167.8 | | | | 173.9 | |
Exchange gas payable | | | 168.2 | | | | 266.1 | |
Deferred revenue | | | 10.1 | | | | 6.8 | |
Regulatory liabilities | | | 112.0 | | | | 92.9 | |
Accrued liability for postretirement and postemployment benefits | | | 26.6 | | | | 23.3 | |
Legal and environmental reserves | | | 43.9 | | | | 86.0 | |
Other accruals | | | 301.0 | | | | 343.7 | |
| | | | | | | | |
Total Current Liabilities | | | 3,646.4 | | | | 3,666.3 | |
| | | | | | | | |
Other Liabilities and Deferred Credits | | | | | | | | |
Price risk management liabilities | | | 138.9 | | | | 181.6 | |
Deferred income taxes | | | 2,541.9 | | | | 2,193.1 | |
Deferred investment tax credits | | | 29.0 | | | | 33.7 | |
Deferred credits | | | 78.9 | | | | 68.6 | |
Deferred revenue | | | — | | | | 0.3 | |
Accrued liability for postretirement and postemployment benefits | | | 953.8 | | | | 1,039.6 | |
Regulatory liabilities and other removal costs | | | 1,663.9 | | | | 1,595.8 | |
Asset retirement obligations | | | 146.4 | | | | 138.8 | |
Other noncurrent liabilities | | | 244.7 | | | | 162.0 | |
| | | | | | | | |
Total Other Liabilities and Deferred Credits | | | 5,797.5 | | | | 5,413.5 | |
| | | | | | | | |
Commitments and Contingencies (Refer to Note 20) | | | — | | | | — | |
| | | | | | | | |
Total Capitalization and Liabilities | | $ | 20,708.3 | | | $ | 19,913.4 | |
| | | | | | | | |
19
NiSource Inc.
Statements of Consolidated Cash Flows (GAAP) (unaudited)
| | | | | | | | |
Year Ended December 31, (in millions) | | 2011 | | | 2010 | |
Operating Activities | | | | | | | | |
Net Income | | $ | 299.1 | | | $ | 282.6 | |
Adjustments to Reconcile Net Income to Net Cash from Continuing Operations: | | | | | | | | |
Loss on early extinguishment of debt | | | 53.9 | | | | 96.7 | |
Depreciation and amortization | | | 538.2 | | | | 597.1 | |
Net changes in price risk management assets and liabilities | | | 38.1 | | | | (5.5 | ) |
Deferred income taxes and investment tax credits | | | 178.4 | | | | 193.9 | |
Deferred revenue | | | 2.5 | | | | (20.4 | ) |
Stock compensation expense and 401(k) profit sharing contribution | | | 39.2 | | | | 30.9 | |
Loss (Gain) on sale of assets | | | 0.1 | | | | (0.1 | ) |
Loss on impairment of assets | | | 16.7 | | | | 2.1 | |
Income from unconsolidated affiliates | | | (13.7 | ) | | | (14.8 | ) |
Gain on disposition of discontinued operations—net of taxes | | | — | | | | (0.1 | ) |
Loss from discontinued operations—net of taxes | | | 4.7 | | | | 2.7 | |
Amortization of discount/premium on debt | | | 8.9 | | | | 10.3 | |
AFUDC equity | | | (2.4 | ) | | | (6.1 | ) |
Distribution Received from Equity Earnings | | | 18.8 | | | | 12.9 | |
Changes in Assets and Liabilities: | | | | | | | | |
Accounts receivable | | | 219.6 | | | | (243.9 | ) |
Income tax receivable | | | 98.1 | | | | 51.5 | |
Inventories | | | (141.8 | ) | | | 103.3 | |
Accounts payable | | | (154.8 | ) | | | 37.7 | |
Customer deposits and credits | | | (4.5 | ) | | | (25.0 | ) |
Taxes accrued | | | 2.3 | | | | (117.0 | ) |
Interest accrued | | | (2.5 | ) | | | (10.7 | ) |
(Under) Overrecovered gas and fuel costs | | | 127.5 | | | | (243.0 | ) |
Exchange gas receivable/payable | | | (100.1 | ) | | | (14.2 | ) |
Other accruals | | | 33.2 | | | | 63.4 | |
Prepayments and other current assets | | | (10.2 | ) | | | (11.5 | ) |
Regulatory assets/liabilities | | | (322.9 | ) | | | 164.3 | |
Postretirement and postemployment benefits | | | (92.7 | ) | | | (146.6 | ) |
Deferred credits | | | (2.3 | ) | | | (2.6 | ) |
Deferred charges and other noncurrent assets | | | 6.9 | | | | 7.9 | |
Other noncurrent liabilities | | | 82.0 | | | | (13.2 | ) |
| | | | | | | | |
Net Operating Activities from Continuing Operations | | | 920.3 | | | | 782.6 | |
Net Operating Activities used for Discontinued Operations | | | (50.1 | ) | | | (57.2 | ) |
| | | | | | | | |
Net Cash Flows from Operating Activities | | | 870.2 | | | | 725.4 | |
| | | | | | | | |
Investing Activities | | | | | | | | |
Capital expenditures | | | (1,125.2 | ) | | | (803.8 | ) |
Insurance recoveries | | | — | | | | 5.0 | |
Proceeds from disposition of assets | | | 9.4 | | | | 0.5 | |
Restricted cash (withdrawals) deposits | | | 42.3 | | | | (28.2 | ) |
Contributions to equity investees | | | (6.4 | ) | | | (87.9 | ) |
Distributions from equity investees | | | — | | | | 23.8 | |
Other investing activities | | | (69.4 | ) | | | (53.1 | ) |
| | | | | | | | |
Net Investing Activities used for Continuing Operations | | | (1,149.3 | ) | | | (943.7 | ) |
Net Investing Activities from Discontinued Operations | | | — | | | | 0.4 | |
| | | | | | | | |
Net Cash Flows used for Investing Activities | | | (1,149.3 | ) | | | (943.3 | ) |
| | | | | | | | |
Financing Activities | | | | | | | | |
Issuance of long-term debt | | | 890.0 | | | | 244.6 | |
Retirement of long—term debt | | | (286.9 | ) | | | (977.7 | ) |
Premium and other costs to retire debt | | | (62.1 | ) | | | (93.0 | ) |
Change in short-term debt, net | | | (23.1 | ) | | | 1,279.5 | |
Issuance of common stock | | | 24.4 | | | | 14.4 | |
Acquisition of treasury stock | | | (3.1 | ) | | | (1.5 | ) |
Dividends paid—common stock | | | (257.8 | ) | | | (255.6 | ) |
| | | | | | | | |
Net Cash Flows from Financing Activities | | | 281.4 | | | | 210.7 | |
| | | | | | | | |
Change in cash and cash equivalents from continuing operations | | | 52.4 | | | | 49.6 | |
Cash (contributions to) receipts from discontinued operations | | | (50.1 | ) | | | (56.8 | ) |
Cash and cash equivalents at beginning of period | | | 9.2 | | | | 16.4 | |
| | | | | | | | |
Cash and Cash Equivalents at End of Period | | $ | 11.5 | | | $ | 9.2 | |
| | | | | | | | |
20
