Nisource Inc · NYSE:NI
Nisource — Investor Presentation (November 2003)
20 slides from Nisource's investor presentation, Nov 17, 2003
Slide 1: ‘Source
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Slide 2: Forward-Looking Statements "Safe Harbor" Statement
FORWARD-LOOKING STATEMENTS "Safe Harbor" Statement This presentation 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
Slide 3: A Super Regional Integrated Gas Company
A SUPER REGIONAL INTEGRATED GAS COMPANY Virginia West Virginia Tennessee Gulf of Mexico Mississippi Louisiana Texas Kentucky Ohio Pennsylvania Maryland New Jersey New York Maine Indiana Mass ..N.H. Strategic Location 30% population / 40% of U.S. energy consumption Third Largest Gas Distribution Comp
Slide 4: NiSource Challenges and Results
NISOURCE CHALLENGES AND RESULTS Actions Focus on Regulatory Opportunities Standardize Utility/Pipeline Operations Reduce O&M Expenses Control Capital Spending Equity Offering - Fall 2002 Trim Dividend 20% - Nov. 2003 Target Payout at 55% Range Reduce Debt Sale of Non-Core Assets Reduce Interest Expe
Slide 5: Exiting Non-Core Activities
Columbia LNG Columbia Retail Columbia Electric Market Hub Partners Miller Pipeline Columbia Propane Columbia Petroleum Portland Natural Gas Transmission SM&P/UTI - Locating Business IWC Resources - Water Utility TPC - Gas Trading Energy USA Propane Columbia Energy Resources - E&P Business Primary En
Slide 6: Balancing Our Risk
2002 Operating Income Regulated Gas Distribution Regulated Gas Transmission Regulated Electric Operations 39 34 27 BALANCING OUR RISK 100% Of Operating Income From Regulated Businesses
Slide 7: Improving Our Productivity
1999 2000 2001 2002 11920 10084 9783 8734 IMPROVING OUR PRODUCTIVITY Staffing at our Core Businesses Core businesses reflect gas distribution, electric operations, gas transmission and corporate.
Slide 8: Demonstrating Capital Discipline
DEMONSTRATING CAPITAL DISCIPLINE 1995 1996 1997 1998 1999 0.46 0.53 0.59 0.49 0.62 1999 2000 2001 2002 2003E 613.5 554 531 527.5 552 Pre-merger Post-merger ($ in millions) Capital Expenditures* Capital Expenditures Adjusted for the Effects of Discontinued Operations
Slide 9: While Providing for Growth from Internal Sources
2003E Capital Expenditures $552 Million $113 Million Growth Capex 2003E 67% Gas Distribution 12% Gas Transmission 18% Electric Operations 3% Other WHILE PROVIDING FOR GROWTH FROM INTERNAL SOURCES Gas Distribution Gas Transmission Electric Operations Other 35 22 39 4
Slide 10: Dividend Payout Ratio
DIVIDEND PAYOUT RATIO 1997 1998 1999 2000 2001 2002 2003E* NISOURCE 0.584 0.6 0.791 0.964 1.1 0.65 0.67 2003E Based on EPS from continuing operations Target Future Payout at 55% Range
Slide 11: Financial Performance for Nine Months
Earnings from Continuing Operations: Earnings from Continuing Operations Were $285.1 Million or $1.10 Cents Per Share Compared to $263.6 Million or $1.28 Cents Per Share in 2002 Colder than Normal Winter Weather Increased Deliveries of Natural Gas Offset by Lower Electric Sales as a Result of Mild S
Slide 12: Strengthening Our Gas Distribution
STRENGTHENING OUR GAS DISTRIBUTION Industry-leading Scale Diversification of Customers and States Favorable Overall Regulatory Environment Customer Choice Strong Regulatory Relationships Incentive Opportunities Vertical Integration With Transmission / Storage
Slide 13: Integrating Our Transmission / Storage
INTEGRATING OUR TRANSMISSION / STORAGE One of the Largest Integrated Systems in U.S. Over 670 Bcf of Storage (Market Area) Majority of Capacity Sold to LDCs Competitive Cost Structure Vs. Other Pipeline Systems in the Mid-Atlantic Region Unique Web-like Network Benefits from Integrated Storage and A
Slide 14: Capitalizing on Our Electric Gateway
CAPITALIZING ON OUR ELECTRIC GATEWAY Michigan Market ComEd Hub Cinergy Hub SERC NPCC ECAR MAAC MAIN MAPP SPP NIPSCO Vertically Integrated Utility Near-Term Deregulation Unlikely Low-Cost Portfolio of Coal-Fired Generation (3,059 MW) Interconnect With Five Surrounding Control Areas Ability to Market
Slide 15: Positioning NiSource for Solid 2003 Earnings
POSITIONING NISOURCE FOR SOLID 2003 EARNINGS Assumes Normal Weather and an Additional 51 Million Average Shares Outstanding in 2003. (1) Income from Continuing Operations ($ in millions) EPS (From Continuing Operations)
Slide 16: With an Improving Capital Structure
WITH AN IMPROVING CAPITAL STRUCTURE
Slide 17: And a Stronger Balance Sheet
2000 2001 2002 2003 8585 8330 6988 6830 AND A STRONGER BALANCE SHEET TOTAL DEBT IN MILLIONS THIRD QUARTER
Slide 18: With Solid Fundamentals
Stable Base of Regulated Earnings 100% of Operating Income Generated by Low-risk Regulated Businesses Regulated Energy Delivery Service to Nearly 3.7 million Customers Across 9 States Continue Savings Initiatives and Earnings Improvements Improved Liquidity and Credit Profile Stable Investment Grade
Slide 19: Future Focus
Centralize Regulatory Strategy Create Regulatory Opportunities Around Assets that Benefit Customers and Shareholders Collaborative Efforts within Each State Rate Trackers ... Environmental, Operational, Pipeline Expansion Standardize All Operations Operate as a Common Distribution Company Across Nin
Slide 20: NiSource Energy Market
NISOURCE ENERGY MARKET Virginia West Virginia Tennessee Gulf of Mexico Mississippi Louisiana Texas Kentucky Ohio Pennsylvania Maryland New Jersey New York Maine Indiana Mass ..N.H. Strong Assets Located in Growth Markets Low Business Risk Profile - 100% Regulated - 3.7 Million Distribution Customers