NiSource Reports First Quarter 2009 Results
--Reaffirms Annual Earnings Outlook -- Results In-Line with Business Plan -- Solid Liquidity Position Enhanced -- Business Initiatives Continue to Progress
MERRILLVILLE, Ind., May 1, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- NiSource Inc. (NYSE: NI) today announced net operating earnings (non-GAAP) of $170.2 million, or 62 cents per share, for the three months ended March 31, 2009, compared to $189.4 million, or 69 cents per share, for the first quarter of 2008. Operating earnings (non-GAAP) were $369.4 million, compared to $394.8 million for the same period in 2008.
On a GAAP basis, NiSource reported income from continuing operations for the three months ended March 31, 2009, of $159.3 million, or 58 cents per share, compared with $189.5 million, or 69 cents per share, in the same period a year ago. Operating income was $348.3 million for the first quarter of 2009, compared with $394.9 million in the year-ago period.
NiSource President and Chief Executive Officer Robert C. Skaggs, Jr. noted that, as anticipated, the most significant impact on NiSource's first quarter earnings results was an increased pension expense of $25 million (or approximately 6 cents per share) related to the deterioration in global securities markets in 2008.
"Despite challenging economic conditions, NiSource produced another solid quarter of core earnings, while continuing to execute key financial, regulatory and infrastructure enhancement initiatives," Skaggs said. "Our first quarter earnings are consistent with the company's previously announced net operating earnings (non-GAAP) outlook of $1.00 to $1.10 per share for 2009, and our year-to-date accomplishments serve to underscore our continued commitment to preserving - and executing on - the core elements of our business strategy."
Skaggs highlighted several of NiSource's important recent accomplishments:
Enhancing a Solid Liquidity Position
During the past several months, NiSource has successfully executed against its previously announced financing and liquidity plan:
-- On April 9, NiSource's finance subsidiary, NiSource Finance Corp.,
closed on a senior unsecured term loan under attractive terms with a
syndicate of lenders. The initial February closing of the term loan was
at $265 million, and the company was successful in expanding the loan to
$385 million at final closing in April under an accordion feature in the
financing agreement.
-- On March 9, NiSource Finance Corp. issued $600 million of senior
unsecured notes in an underwritten offering. NiSource will use the
proceeds from the issuance to complete the refinancing of outstanding
debt scheduled to mature in November 2009 and for general corporate
purposes, including refinancing a portion of outstanding debt scheduled
to mature in November 2010.
-- On April 28, NiSource Finance Corp. announced results of a tender offer
for up to $300 million aggregate principal amount of its outstanding
notes due in 2010. The aggregate principal amount of notes tendered was
approximately $250 million, which will reduce NiSource's interest
expense through November 2010 by approximately $30 million.
-- On March 30, Northern Indiana Public Service Company (NIPSCO) filed an
amended petition with the Indiana Utility Regulatory Commission (IURC)
seeking permission to issue $120 million of long-term debt to finance
the Sugar Creek electric generating facility, which was acquired last
year. A hearing before the IURC is scheduled for June 30. NiSource is
continuing to evaluate financing opportunities at other operating
subsidiaries.
-- Also during the quarter, NiSource business units undertook a number of
efforts to manage spending and optimize funds from operations. In
connection with these efforts, NiSource Gas Transmission & Storage,
on Feb. 27, announced a restructuring plan to better focus on core
business activities and increase efficiency, while maintaining safe and
reliable service to its customers.
"NiSource's overall liquidity strategy, including our recent financial and optimization initiatives, not only fully addresses the company's 2009 debt refinancing requirements but also places us well on our way toward meeting our remaining 2010 refinancing needs of approximately $690 million," Skaggs said. "In light of the steps we have taken and are continuing to take, I am confident NiSource will maintain a solid liquidity position going forward."
Skaggs also noted that, on March 5, credit rating agency Standard & Poor's announced that it had affirmed NiSource's "BBB-" investment grade corporate credit rating and, notably, revised its outlook to stable from negative. "We appreciate this recognition that NiSource is executing on its comprehensive strategy to maintain financial flexibility and delivering on our core business commitments," Skaggs said.
Growth, Infrastructure Investments and Regulatory Initiatives Continue to Progress
NiSource's business units also continued to advance key growth and infrastructure enhancement programs, synchronized with complementary regulatory and commercial initiatives:
-- NIPSCO received a favorable regulatory order on Feb. 18 related to its
actions to increase its electric generating capacity and advance its
electric rate case. Acting on a settlement reached among NIPSCO and its
regulatory stakeholders, the IURC ruled that NIPSCO's Sugar Creek
electric generating plant was "in service" for ratemaking
purposes as of Dec. 1, 2008. The IURC also approved the deferral of
depreciation expenses and carrying costs associated with the $330
million Sugar Creek investment until such time as the IURC recognizes
the plant in the company's rate base through revised rates.
-- Progress also continued on NIPSCO's electric base rate case - the
company's first in 20 years. Initial hearings were held in the
proceeding in January 2009, and a public hearing on the case was
conducted in March. Intervening parties have until May 8 to file
testimony. A final round of evidentiary hearings is scheduled for this
summer, with the case expected to be resolved, and new electric rates
effective, by late 2009 or during the first quarter of 2010.
"Successful resolution of the NIPSCO rate case remains a very high priority for NIPSCO CEO Eileen O'Neill Odum and the entire NIPSCO team this year," Skaggs said. "While much work remains ahead of us, I am pleased with the progress we are making to establish a solid foundation for NIPSCO and position it to contribute to NiSource's growth going forward."
At NiSource's Gas Transmission & Storage (NGT&S) unit, work also continued on the development of new growth projects and the maximization of value from NiSource's existing asset base.
-- In southwestern Pennsylvania, NGT&S unit Columbia Gas Transmission
began increasing its transportation capabilities to provide market
access for an additional 150,000 dekatherms per day (Dth/d) of gas from
the Marcellus Shale production area. Specifically, Columbia Gas
Transmission is modifying its Waynesburg Compressor Station and parts of
its Line 1570 in Allegheny and Washington counties to enable it to
transport additional natural gas supplies to market. The initial phase
of firm transportation service commenced in the third quarter of 2008,
with additional increments scheduled to be placed in service through
mid-2010.
-- In conjunction with a March open season, NGT&S unit Columbia Gulf
Transmission completed the addition of 95,000 Dth/d of contracted
capacity for delivery to the Florida Gas Transmission system near
Lafayette, La. The new capacity is in addition to 145,000 Dth/d of
capacity already subscribed for delivery to Florida Gas Transmission.
-- On March 25, the Federal Energy Regulatory Commission (FERC) issued a
certificate authorizing Columbia Gas Transmission to expand its Ohio
storage facilities to meet growing demand for natural gas storage and
transportation services in the company's Mid-Atlantic markets. The
Ohio Storage Expansion Project will increase Columbia Gas
Transmission's storage capacity by 6.7 billion cubic feet and
enhance daily deliverability from the Weaver and Crawford Storage fields
by 100,000 Dth/d. Storage deliveries are scheduled to commence in
November of this year. Notably, the FERC authorized market-based rates
for the project - the first time that Columbia Gas Transmission has been
granted such authority in connection with the expansion of an existing,
traditionally cost-based, storage facility.
-- On March 30, Columbia Gas Transmission announced a binding open season
for capacity into premium East Coast markets resulting from
modifications made to the company's Easton Compressor Station. The
modifications will increase delivery capacity from the Wagoner
interconnection point between the Columbia Gas Transmission and
Millennium pipeline systems. Through the open season, which closed on
April 3, the company received 30,000 Dth/d of binding bids.
-- Construction also continued on two additional NGT&S expansion
projects. The Appalachian Expansion Project continues to progress,
with service targeted to begin later this year, providing approximately
100,000 Dth/d of new transportation capacity to three key Appalachian
Basin producers. Meanwhile, the Eastern Market Expansion - a project
that expands Columbia Gas Transmission's facilities to provide
97,000 Dth/d of additional storage and related transportation services
under fully subscribed, 15-year firm contracts - was placed into service
April 1.
"The NGT&S team continues to make significant progress in developing and delivering new energy infrastructure projects that will provide enhanced supply access to Eastern and Southeastern market areas," Skaggs said. "These ongoing infrastructure projects are - and will continue to be - a key contributor to our long-term growth plan."
Regulatory and commercial initiatives also progressed at NiSource's gas distribution companies.
-- On March 27, the Maryland Public Service Commission approved a unanimous
settlement of Columbia Gas of Maryland's base distribution rate
case filed last year. The rate change, which went into effect on March
31, 2009, will increase annual revenues by approximately $1.2 million.
-- Also in March, the Virginia State Corporation Commission approved
Dominion Virginia Power Company's planned 580-megawatt Bear Garden
power station in Buckingham County, Va. Columbia Gas of Virginia will
supply natural gas transportation service to the facility following an
approximately $50 million expansion of its distribution system. The
service is scheduled to begin by the fall of 2010.
-- On April 30, Columbia Gas of Ohio filed an application with the Public
Utilities Commission of Ohio (PUCO) to defer pension and other post
employment benefit (OPEB) expenses above those currently subject to
collection in rates. A similar filing was made by Columbia Gas of
Kentucky with the Kentucky Public Service Commission on April 23.
-- Progress also continued on new rate proceedings at two of
NiSource's gas distribution companies. Bay State Gas Co. filed a
petition with the Massachusetts Department of Public Utilities on April
16 seeking to increase total annual revenues by $34.6 million, or 6.4
percent, while Columbia Gas of Kentucky is on track to file for a base
rate increase later today with the Kentucky Public Service Commission.
These proceedings will continue NiSource's collaborative regulatory
approach toward engaging stakeholders in addressing issues related to
energy conservation, customer assistance and timely recovery of pension
expenses, as well as ongoing infrastructure enhancement investments.
"Synchronization of our significant infrastructure replacement programs and enhancement projects with thoughtful, collaborative regulatory initiatives such as those being undertaken in Massachusetts and Kentucky is a central feature to NiSource's long-term gas distribution business strategy," Skaggs said. "Building on last year's successes in Ohio and Pennsylvania, our gas distribution team continues to make excellent progress in executing on that strategy."
First Quarter 2009 Operating Earnings - Segment Results (non-GAAP)
NiSource's consolidated operating earnings (non-GAAP) for the quarter ended March 31, 2009, were $369.4 million, compared to $394.8 million for the same period in 2008. Refer to Schedule 2 for the items included in 2009 and 2008 GAAP operating income but excluded from operating earnings.
Operating earnings for NiSource's business segments for the three months ended March 31, 2009 are discussed below.
Gas Distribution Operations reported operating earnings for the current quarter of $237.3 million compared to $255.6 million in the first quarter of 2008. Net revenues, excluding the impact of regulatory trackers, increased $5.1 million, primarily attributable to regulatory and service programs including impacts from rate cases at various utilities, partially offset by decreased customer usage and lower off-system sales revenues. Operating expenses, excluding trackers, were $23.4 million higher than the comparable period, reflecting increases in employee and administrative costs, uncollectible accounts, depreciation costs, and outside services. The increase in employee and administrative expenses for all operating segments was driven primarily by increased pension costs that were discussed in NiSource's 2008 SEC Form10-K and Feb. 4, 2009 earnings release.
Gas Transmission and Storage Operations reported operating earnings for the current quarter of $111.1 million versus operating earnings of $104.4 million in the first quarter of 2008. The increase resulted primarily from increased net revenues of $11.0 million, primarily attributable to increases in firm capacity reservation fees and the impact of regulatory trackers. The increase in firm capacity reservation fees was the result of higher Columbia Gas Transmission revenue for storage services, new Appalachian Supply interconnects, and incremental revenue from transportation agreements on both Columbia Gulf Transmission and Columbia Gas Transmission. Equity earnings increased by $4.4 million resulting from Millennium Pipeline being in service.
Operating expenses increased by $8.7 million due to higher employee and administrative expenses, environmental costs, and regulatory trackers, partially offset by lower outside services fees and materials and supplies.
Electric Operations reported operating earnings for the current quarter of $26.1 million, compared with $38.0 million in the first quarter of 2008. The decrease resulted from higher operating expenses, partially offset by higher net revenues. Operating expenses increased by $16.2 million due to higher employee and administrative costs, electric generation and maintenance expenses, including expenses associated with the Sugar Creek facility, storm damage repairs, higher depreciation costs and other taxes. These increases were partially offset by lower environmental expenses resulting from an insurance settlement.
Net revenues increased by $4.3 million due to increased residential and commercial margins partially offset by lower industrial and wholesale volumes and margins.
Other Operations reported an operating loss for the current quarter of $1.4 million, compared with a loss of $0.5 million for the first quarter of 2008. The decrease was due to lower net revenues from commercial and industrial gas marketing activities.
Other Items
Interest expense decreased by $1.3 million due to lower short-term interest rates and savings from the $100 million of open market debt repurchases in January 2009, partially offset by incremental interest expense associated with $700 million of debt issued in May 2008 and a partial month of interest expense associated with the $600 million of debt issued in March 2009. Other-net was a loss of $4.2 million compared to a loss of $1.5 million for the first quarter of 2008 as a result of lower interest income. The effective tax rate of net operating earnings for the first quarter 2009 was 38.0% compared to the tax rate of 37.2% for the first quarter of 2008. The increase in the effective tax rate is primarily due to a reduction in estimated Section 199 deductions as a result of lower projected taxable income for 2009, and an increase in tax expense related to AFUDC-Equity and certain depreciation differences.
Income from Continuing Operations (GAAP)
On a GAAP basis, NiSource reported income from continuing operations for the three months ended March 31, 2009, of $159.3 million or 58 cents per share, compared with $189.5 million, or 69 cents per share for the three months ended March 31, 2008. Operating income was $348.3 million for the first three months of 2009 versus $394.9 million in the year-ago period. In addition to the impacts discussed above, the first quarter 2009 GAAP results include a restructuring charge of $19.8 million related to the restructuring of Gas Transmission and Storage Operations. As previously announced, the majority of these charges include costs related to severance and other employee related costs.
Refer to Schedule 1 for a complete list of the items included in 2009 and 2008 GAAP income from Continuing Operations but excluded from net operating earnings.
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 contains "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. Investors and prospective investors should understand that many factors govern whether any forward-looking statement contained herein will be or can be realized. Any one of those factors could cause actual results to differ materially from those projected. These forward-looking statements include, but are not limited to, statements concerning NiSource's plans, objectives, expected performance, expenditures and recovery of expenditures through rates, stated on either a consolidated or segment basis, and any and all underlying assumptions and other statements that are other than statements of historical fact. From time to time, NiSource may publish or otherwise make available forward-looking statements of this nature. All such subsequent forward-looking statements, whether written or oral and whether made by or on behalf of NiSource, are also expressly qualified by these cautionary statements. All forward-looking statements are based on assumptions that management believes to be reasonable; however, there can be no assurance that actual results will not differ materially. Realization of NiSource's objectives and expected performance is subject to a wide range of risks and can be adversely affected by, among other things, 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 success of NiSource's restructured outsourcing agreement, actual operating experience of NiSource's assets, the regulatory process, regulatory and legislative changes, changes in general economic, capital and commodity market conditions, and counter- party credit risk, many of which risks 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 claims a duty to update any of the forward-looking statements contained in this release.
NiSource Inc.
Consolidated Net Operating Earnings (Non - GAAP)
(unaudited)
Three Months Ended March 31, (in millions, except
per share amounts) 2009 2008
--------------------------------------------------------------------------
Net Revenues
Gas Distribution $1,710.4 $2,230.6
Gas Transportation and Storage 396.2 357.2
Electric 305.4 331.1
Other 310.3 370.0
--------------------------------------------------------------------------
Gross Revenues 2,722.3 3,288.9
Cost of Sales (excluding depreciation and
amortization) 1,654.8 2,248.0
--------------------------------------------------------------------------
Total Net Revenues 1,067.5 1,040.9
--------------------------------------------------------------------------
Operating Expenses
Operation and maintenance 350.3 318.3
Operation and maintenance - trackers 107.0 90.6
Depreciation and amortization 143.8 135.6
Other taxes 63.1 59.0
Other taxes - trackers 40.3 44.6
--------------------------------------------------------------------------
Total Operating Expenses 704.5 648.1
--------------------------------------------------------------------------
Equity Earnings in Unconsolidated Affiliates 6.4 2.0
--------------------------------------------------------------------------
Operating Earnings 369.4 394.8
--------------------------------------------------------------------------
Other Income (Deductions)
Interest expense, net (90.5) (91.8)
Other, net (4.2) (1.5)
--------------------------------------------------------------------------
Total Other Income (Deductions) (94.7) (93.3)
--------------------------------------------------------------------------
Operating Earnings From Continuing Operations
Before Income Taxes 274.7 301.5
Income Taxes 104.5 112.1
--------------------------------------------------------------------------
Net Operating Earnings from Continuing Operations 170.2 189.4
--------------------------------------------------------------------------
GAAP Adjustment (10.9) 0.1
--------------------------------------------------------------------------
GAAP Income from Continuing Operations $159.3 $189.5
==========================================================================
--------------------------------------------------------------------------
Basic Net Operating Earnings Per Share from
Continuing Operations 0.62 0.69
--------------------------------------------------------------------------
--------------------------------------------------------------------------
GAAP Basic Earnings Per Share from Continuing
Operations 0.58 0.69
--------------------------------------------------------------------------
Basic Average Common Shares Outstanding 274.2 273.9
--------------------------------------------------------------------------
NiSource Inc.
Segment Operating Earnings (Non-GAAP)
Gas Distribution Operations
Three Months Ended March 31, (in millions) 2009 2008
--------------------------------------------------------------------------Net Revenues
Sales Revenues $1,946.8 $2,447.1
Less: Cost of gas sold 1,314.2 1,828.2
--------------------------------------------------------------------------Net Revenues 632.6 618.9
--------------------------------------------------------------------------Operating Expenses
Operation and maintenance 176.3 158.9
Operation and maintenance - trackers 91.0 78.1
Depreciation and amortization 60.4 56.7
Other taxes 27.3 25.0
Other taxes - trackers 40.3 44.6
--------------------------------------------------------------------------Total Operating Expenses 395.3 363.3
--------------------------------------------------------------------------
Operating Earnings $237.3 $255.6
==========================================================================
GAAP Adjustment 5.9 (0.6)
--------------------------------------------------------------------------GAAP Operating Income $243.2 $255.0
==========================================================================
--------------------------------------------------------------------------
Gas Transmission and Storage Operations
Three Months Ended March 31, (in millions) 2009 2008
--------------------------------------------------------------------------Net Revenues
Transportation revenues $194.5 $184.8
Storage revenues 45.2 45.6
Other revenues 2.6 0.9
--------------------------------------------------------------------------Net Operating Revenues 242.3 231.3
--------------------------------------------------------------------------Operating Expenses
Operation and maintenance 77.2 73.2
Operation and maintenance - trackers 15.1 11.0
Depreciation and amortization 29.4 29.3
Other taxes 15.9 15.4
--------------------------------------------------------------------------Total Operating Expenses 137.6 128.9
--------------------------------------------------------------------------Equity Earnings in Unconsolidated Affiliates 6.4 2.0
--------------------------------------------------------------------------Operating Earnings $111.1 $104.4
==========================================================================
GAAP Adjustment (18.2) 0.4
--------------------------------------------------------------------------GAAP Operating Income $92.9 $104.8
==========================================================================
NiSource Inc.
Segment Operating Earnings (Non-GAAP)
Electric Operations
Three Months Ended March 31, (in millions) 2009 2008
--------------------------------------------------------------------------Net Revenues
Sales revenues $307.0 $332.3
Less: Cost of sales 120.0 149.6
--------------------------------------------------------------------------Net Revenues 187.0 182.7
--------------------------------------------------------------------------Operating Expenses
Operation and maintenance 93.7 81.2
Operation and maintenance - trackers 0.9 1.5
Depreciation and amortization 50.4 47.4
Other taxes 15.9 14.6
--------------------------------------------------------------------------Total Operating Expenses 160.9 144.7
--------------------------------------------------------------------------Operating Earnings $26.1 $38.0
==========================================================================
GAAP Adjustment (8.8) 0.4
--------------------------------------------------------------------------GAAP Operating Income $17.3 $38.4
==========================================================================
--------------------------------------------------------------------------
Other Operations
Three Months Ended March 31, (in millions) 2009 2008
--------------------------------------------------------------------------Net Revenues
Products and services revenue $299.3 $359.3
Less: Cost of products purchased 293.6 352.1
--------------------------------------------------------------------------Net Revenues 5.7 7.2
--------------------------------------------------------------------------Operating Expenses
Operation and maintenance 4.9 5.4
Depreciation and amortization 0.6 0.7
Other taxes 1.6 1.6
--------------------------------------------------------------------------Total Operating Expenses 7.1 7.7
--------------------------------------------------------------------------Operating Earnings (Loss) $(1.4) $(0.5)
==========================================================================
GAAP Adjustment - -
--------------------------------------------------------------------------GAAP Operating Earnings (Loss) $(1.4) $(0.5)
==========================================================================
--------------------------------------------------------------------------
Corporate
Three Months Ended March 31, (in millions) 2009 2008
--------------------------------------------------------------------------Operating Earnings (Loss) $(3.7) $(2.7)
==========================================================================
GAAP Adjustment - (0.1)
--------------------------------------------------------------------------GAAP Operating Earnings (Loss) $(3.7) $(2.8)
--------------------------------------------------------------------------
NiSource Inc.
Segment Volumes and Statistical Data
Gas Distribution Operations
Three Months Ended March 31, 2009 2008
--------------------------------------------------------------------------Sales and Transportation (MMDth)
Residential 132.6 137.4
Commercial 78.0 78.0
Industrial 96.6 103.2
Off System 16.2 37.4
Other 0.3 0.5
--------------------------------------------------------------------------Total 323.7 356.5
--------------------------------------------------------------------------
Weather Adjustment (3.6) (0.6)
--------------------------------------------------------------------------Sales and Transportation Volumes -
Excluding Weather 320.1 355.9
==========================================================================
Heating Degree Days 2,683 2,676
Normal Heating Degree Days 2,633 2,661
% Colder (Warmer) than Normal 2% 1%
Customers
Residential 3,041,969 3,047,385
Commercial 280,595 280,729
Industrial 7,964 8,039
Other 80 77
--------------------------------------------------------------------------Total 3,330,608 3,336,230
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Gas Transmission and Storage Operations
Three Months Ended March 31, 2009 2008
--------------------------------------------------------------------------Throughput (MMDth)
Columbia Transmission 408.4 386.4
Columbia Gulf 263.2 234.7
Columbia Pipeline Deep Water - 0.2
Crossroads Gas Pipeline 8.6 10.1
Intrasegment eliminations (170.5) (132.0)
--------------------------------------------------------------------------Total 509.7 499.4
--------------------------------------------------------------------------
NiSource Inc.
Segment Volumes and Statistical
Data (continued)
Electric Operations
Three Months Ended March 31, 2009 2008
--------------------------------------------------------------------------Sales (Gigawatt Hours)
Residential 842.8 806.8
Commercial 968.6 944.0
Industrial 1,989.0 2,514.0
Wholesale 57.6 144.7
Other 35.1 34.8
--------------------------------------------------------------------------Total 3,893.1 4,444.3
--------------------------------------------------------------------------Weather Adjustment (6.0) (9.5)
--------------------------------------------------------------------------Sales Volumes - Excluding Weather impacts 3,887.1 4,434.8
==========================================================================
Electric Customers
Residential 399,334 400,452
Commercial 53,349 52,920
Industrial 2,471 2,499
Wholesale 8 4
Other 752 756
--------------------------------------------------------------------------Total 455,914 456,631
--------------------------------------------------------------------------
NiSource Inc.
Schedule 1 - Reconciliation of Net Operating Earnings to GAAP
Three Months March 31, (in millions, except per
share amounts) 2009 2008
--------------------------------------------------------------------------Net Operating Earnings from Continuing Operations
(Non-GAAP) $170.2 $189.4
--------------------------------------------------------------------------Items excluded from operating earnings:
Net Revenues:
Weather - compared to normal 6.9 (0.2)
Revenue adjustment (9.0) -
Operating Expenses:
Restructuring (19.8) -
Transition charges (IBM Agreement) (1.2) (1.2)
Gain/Loss on sale of assets and asset
impairments 2.0 1.5
--------------------------------------------------------------------------Total items excluded from operating earnings (21.1) 0.1
--------------------------------------------------------------------------
Gain on early extinguishment of debt 3.2 -
--------------------------------------------------------------------------Tax effect of above items and other income tax
adjustments 7.0 -
--------------------------------------------------------------------------
Total items excluded from net operating earnings (10.9) 0.1
--------------------------------------------------------------------------
--------------------------------------------------------------------------Reported Income from Continuing Operations - GAAP $159.3 $189.5
==========================================================================
--------------------------------------------------------------------------Basic Average Common Shares Outstanding 274.2 273.9
--------------------------------------------------------------------------
Basic Net Operating Earnings Per Share from
Continuing Operations ($) 0.62 0.69
--------------------------------------------------------------------------
Items excluded from net operating earnings (after- tax) (0.04) -
--------------------------------------------------------------------------
GAAP Basic Earnings Per Share from Continuing
Operations 0.58 0.69
--------------------------------------------------------------------------
NiSource Inc.
Schedule 2 - Quarterly Adjustments by Segment
from Operating Earnings to GAAP
For Quarter ended March 31, 2009 (in millions)
--------------------------------------------------------------------------
Gas
Trans-
Gas mission
Distri- and
bution Storage Electric Other Corporate Total
--------------------------------------------- -----
Operating
Earnings
(Loss) 237.3 111.1 26.1 (1.4) (3.7) $369.4
Net Revenues:
Weather
(compared to
normal) 6.5 0.4 $6.9
Revenue sales
adjustment (9.0) (9.0)
---------------------------------------------------------Total
Impact -
Net Revenues 6.5 - (8.6) - - (2.1)
Operating
Expenses
Restructuring (19.8) (19.8)
Transition
charges (IBM
Agreement) (0.6) (0.4) (0.2) (1.2)
Gain/Loss on
sale of assets
and asset
impairments 2.0 2.0
---------------------------------------------------------
Total Impact -
Operating
Expenses (0.6) (18.2) (0.2) - - (19.0)
---------------------------------------------------------
Total Impact -
Operating
Income (Loss) $5.9 $(18.2) $(8.8) $- $- $(21.1)
---------------------------------------------------------
Operating Income
(Loss) - GAAP $243.2 $92.9 $17.3 $(1.4) $(3.7) $348.3
---------------------------------------------------------
2008 (in millions)
--------------------------------------------------------------------------
Gas
Gas Transmission
Distribution and Storage Electric Other Corporate Total
----------------------------------------------------------------
Operating
Earnings
(Loss) 255.6 104.4 38.0 (0.5) (2.7) $394.8
Net Revenues:
Weather
(compared to
normal) (0.9) 0.7 $(0.2)
----------------------------------------------------------------
Total Impact -
Net Revenues (0.9) - 0.7 - - (0.2)
Operating
Expenses
Transition
charges (IBM
Agreement) (0.8) (0.2) (0.2) (1.2)
Gain/Loss on
sale of
assets and
asset
impairments 1.1 0.6 (0.1) (0.1) 1.5
----------------------------------------------------------------
Total Impact -
O & M Expenses 0.3 0.4 (0.3) - (0.1) 0.3
----------------------------------------------------------------
Total Impact -
Operating
Income $(0.6) $0.4 $0.4 $- $(0.1) $0.1
----------------------------------------------------------------
Operating Income
(Loss) -
GAAP $255.0 $104.8 $38.4 $(0.5) $(2.8) $394.9
----------------------------------------------------------------
NiSource Inc.
Consolidated Income Statements (GAAP)
(unaudited)
Three Months Ended March 31, (in millions, except
per share amounts) 2009 2008
--------------------------------------------------------------------------
Net Revenues
Gas Distribution $1,716.9 $2,229.7
Gas Transportation and Storage 396.2 357.2
Electric 296.8 331.8
Other 310.3 370.0
--------------------------------------------------------------------------
Gross Revenues 2,720.2 3,288.7
Cost of Sales (excluding depreciation and
amortization) 1,654.8 2,248.0
--------------------------------------------------------------------------
Total Net Revenues 1,065.4 1,040.7
--------------------------------------------------------------------------
Operating Expenses
Operation and maintenance 478.3 410.1
Depreciation and amortization 143.8 135.6
Impairment and (gain)/loss on sale of assets (2.0) (1.5)
Other taxes 103.4 103.6
--------------------------------------------------------------------------
Total Operating Expenses 723.5 647.8
--------------------------------------------------------------------------
Equity Earnings in Unconsolidated Affiliates 6.4 2.0
--------------------------------------------------------------------------
Operating Income 348.3 394.9
--------------------------------------------------------------------------
Other Income (Deductions)
Interest expense, net (90.5) (91.8)
Gain on early extinguishment of long-term debt 3.2 -
Other, net (4.2) (1.5)
--------------------------------------------------------------------------
Total Other Income (Deductions) (91.5) (93.3)
--------------------------------------------------------------------------
Income From Continuing Operations Before Income
Taxes 256.8 301.6
Income Taxes 97.5 112.1
--------------------------------------------------------------------------
Income From Continuing Operations 159.3 189.5
--------------------------------------------------------------------------
Income (Loss) from Discontinued Operations - net of
taxes (10.7) 6.0
Loss on Disposition of Discontinued Operations -
net of taxes (0.2) (96.2)
--------------------------------------------------------------------------
Net Income $148.4 $99.3
==========================================================================
Basic Earnings (Loss) Per Share
Continuing operations $0.58 $0.69
Discontinued operations (0.04) (0.33)
Basic Earnings Per Share $0.54 $0.36
--------------------------------------------------------------------------
Diluted Earnings (Loss) Per Share
Continuing operations $0.58 $0.69
Discontinued operations (0.04) (0.33)
Diluted Earnings Per Share $0.54 $0.36
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Dividends Declared Per Common Share $0.46 $0.46
--------------------------------------------------------------------------
Basic Average Common Shares Outstanding 274.2 273.9
Diluted Average Common Shares 276.7 275.4
--------------------------------------------------------------------------
NiSource Inc.
Consolidated Balance Sheets
(unaudited)
March 31, December 31,
(in millions) 2009 2008
--------------------------------------------------------------------------
ASSETS
Property, Plant and Equipment
Utility Plant $18,498.2 $18,356.8
Accumulated depreciation and amortization (8,134.1) (8,080.8)
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Net utility plant 10,364.1 10,276.0
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Other property, at cost, less
accumulated depreciation 112.6 112.1
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Net Property, Plant and Equipment 10,476.7 10,388.1
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Investments and Other Assets
Assets of discontinued operations and
assets held for sale 46.6 45.8
Unconsolidated affiliates 114.1 86.8
Other investments 115.7 117.9
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Total Investments and Other Assets 276.4 250.5
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Current Assets
Cash and cash equivalents 135.2 20.6
Restricted cash 316.8 286.6
Accounts receivable (less reserve of $69.8 and
$45.3, respectively) 910.7 1,142.5
Gas inventory 87.0 511.8
Underrecovered gas and fuel costs 0.5 180.2
Materials and supplies, at average cost 96.3 95.1
Electric production fuel, at average cost 76.0 63.8
Price risk management assets 173.5 150.4
Exchange gas receivable 257.4 393.8
Regulatory assets 285.8 314.9
Assets of discontinued operations and
assets held for sale 2.2 2.0
Prepayments and other 291.0 249.1
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Total Current Assets 2,632.4 3,410.8
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Other Assets
Price risk management assets 204.2 200.7
Regulatory assets 1,628.2 1,640.4
Goodwill 3,677.3 3,677.3
Intangible assets 327.8 330.6
Postretirement and postemployment
benefits assets 9.6 10.3
Deferred charges and other 117.4 123.5
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Total Other Assets 5,964.5 5,982.8
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Total Assets $19,350.0 $20,032.2
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NiSource Inc.
Consolidated Balance Sheets (continued)
(unaudited)
March 31, December 31,
(in millions, except share amounts) 2009 2008
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CAPITALIZATION AND LIABILITIES
Capitalization
Common Stockholders' Equity
Common stock - $0.01 par value, 400,000,000 shares
authorized; 274,500,339 and 274,261,799 shares
issued and outstanding, respectively $2.7 $2.7
Additional paid-in capital 4,023.0 4,020.3
Retained earnings 923.3 901.1
Accumulated other comprehensive loss (187.2) (172.0)
Treasury stock (24.1) (23.3)
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Total Common Stockholders' Equity 4,737.7 4,728.8
Long-term debt, excluding amounts due within
one year 6,451.9 5,943.9
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Total Capitalization 11,189.6 10,672.7
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Current Liabilities
Current portion of long-term debt 436.0 469.3
Short-term borrowings - 1,163.5
Accounts payable 531.6 693.3
Dividends declared 63.2 -
Customer deposits 130.7 127.3
Taxes accrued 259.4 206.5
Interest accrued 96.7 120.1
Overrecovered gas and fuel costs 302.5 35.9
Price risk management liabilities 336.0 286.5
Exchange gas payable 339.0 555.5
Deferred revenue 11.0 14.7
Regulatory liabilities 40.2 40.4
Accrued liability for postretirement and
postemployment benefits 6.4 6.4
Liabilities of discontinued operations and
liabilities held for sale 2.3 1.5
Temporary LIFO liquidation credit 111.3 -
Legal and environmental reserves 322.4 375.1
Other accruals 289.3 487.4
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Total Current Liabilities 3,278.0 4,583.4
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Other Liabilities and Deferred Credits
Price risk management liabilities 195.4 188.5
Deferred income taxes 1,606.2 1,549.8
Deferred investment tax credits 44.5 46.1
Deferred credits 76.1 76.7
Deferred revenue 6.8 6.2
Accrued liability for postretirement
and postemployment benefits 1,248.5 1,238.5
Liabilities of discontinued operations and
liabilities held for sale 4.2 4.4
Regulatory liabilities and other removal costs 1,411.2 1,386.1
Asset retirement obligations 125.7 126.0
Other noncurrent liabilities 163.8 153.8
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Total Other Liabilities and Deferred Credits 4,882.4 4,776.1
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Commitments and Contingencies - -
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Total Capitalization and Liabilities $19,350.0 $20,032.2
==========================================================================
NiSource Inc.
Statements of Consolidated Cash Flows
(unaudited)
Three Months Ended March 31, (in millions) 2009 2008
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Operating
Activities
Net Income 148.4 99.3
Adjustments to Reconcile Net Income to Net Cash from
Continuing Operations:
Gain on Early Extinguishment of Debt (3.2) -
Depreciation and Amortization 143.8 135.6
Net Changes in Price Risk Management
Assets and Liabilities (1.7) (9.6)
Deferred Income Taxes and Investment Tax Credits 23.1 16.7
Deferred Revenue (3.7) (16.3)
Stock Compensation Expense 1.6 1.4
Gain on Sale of Assets (2.0) (3.2)
Loss on Impairment of Assets - 1.6
Income from Unconsolidated Affiliates (6.4) (1.7)
Loss on Disposition of Discontinued
Operations - Net of Taxes 0.2 96.1
Loss (Income) from Discontinued
Operations - Net of Taxes 10.7 (6.0)
Amortization of Discount/Premium on Debt 2.1 1.8
AFUDC Equity 0.9 (1.1)
Changes in Assets and Liabilities:
Accounts Receivable 172.1 (152.9)
Inventories 487.7 847.3
Accounts Payable (161.1) 32.1
Customer Deposits 3.4 1.6
Taxes Accrued 82.0 128.4
Interest Accrued (23.4) (9.0)
(Under) Overrecovered Gas and Fuel Costs 446.3 (93.1)
Exchange Gas Receivable/Payable (80.1) (44.0)
Other Accruals (187.4) (120.9)
Prepayments and Other Current Assets 8.8 3.7
Regulatory Assets/Liabilities 32.3 (36.4)
Postretirement and Postemployment Benefits 11.3 18.8
Deferred Credits (3.4) (5.6)
Deferred Charges and Other NonCurrent Assets 11.8 (7.5)
Other Non Current Liabilities 5.7 (29.0)
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Net Operating Activities from Continuing Operations 1,119.8 848.1
Net Operating Activities used for
Discontinued Operations (61.9) (2.1)
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Net Cash Flows from Operating Activities 1,057.9 846.0
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Investing Activities
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Capital Expenditures (206.9) (196.9)
Insurance Recoveries 52.0 6.2
Proceeds from Disposition of Assets 2.1 12.5
Restricted Cash (30.2) 72.1
Other Investing Activities (20.9) (1.4)
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Net Investing Activities used for Continuing Operations (203.9) (107.5)
Net Investing Activities from Discontinued Operations 7.5 2.9
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Net Cash Flows used for Investing Activities (196.4) (104.6)
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Financing Activities
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Issuance of Long-Term Debt 581.7 0.9
Retirement of Long-Term Debt (101.4) (1.0)
Repurchase of Long-Term Debt - (199.0)
Change in Short-Term Debt - Net (1,163.5) (436.3)
Issuance of Common Stock 0.2 0.6
Acquisition of Treasury Stock (0.8) -
Dividends Paid - Common Stock (63.1) (63.1)
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Net Cash Flows used for Financing Activities (746.9) (697.9)
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Increase in cash and cash equivalents from
continuing operations 169.0 43.5
Cash contributions to discontinued operations (54.4) (0.7)
Cash and cash equivalents at beginning of
period 20.6 34.6
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Cash and Cash Equivalents at End of Period 135.2 77.4
==========================================================================
SOURCE NiSource Inc.
http://www.nisource.com
Copyright (C) 2009 PR Newswire. All rights reserved
$USD 329.00
$USD 329.00
$USD 329.00
