Nisource Inc · NYSE:NI
Nisource — IPO Roadshow (September 2010)
37 slides from Nisource's IPO roadshow presentation, Sep 8, 2010
Slide 1: Investment-Driven Growth
Filed pursuant to Rule 433 Registration Statement No. 333-148239 Bob Skaggs President & CEO September 8, 2010 INVESTMENT-DRIVEN GROWTH Filed pursuant to Rule 433 Registration Statement No. 333-148239 September 8, 2010
Slide 2: Free-Writing Prospectus
Free-Writing Prospectus The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the related prospectus supplement and other documents th
Slide 3: Forward Looking Statements; Regulation G Disclosure Statement
This document contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements are subject to various risks and uncertainties. The factors that could cause actual results to differ materially from the projections, forecasts, estimates and expectatio
Slide 4: Offering Summary
3 Offering Summary Positions NiSource to Execute its ~$1B/Yr. Optimal Capital Investment Program Funding Incremental Value-Enhancing Growth Investments
Slide 5: Today's Presenters
4 Steve Smith Executive VP & CFO Bob Skaggs President & CEO Today's Presenters
Slide 6: Building Investment-Driven Growth: NiSource Inc.
Building Investment-Driven Growth NiSource Inc. Gas Distribution Gas Transmission & Storage Electric Generation & Distribution From the Gulf Coast through the Midwest to the Northeast, our portfolio of companies serves some of the nation's highest-value energy markets, with services ranging from nat
Slide 7: NiSource Strategic Framework
NiSource Strategic Framework Aspiration North America's Premier Regulated Energy Company Value Proposition Regulated, Infrastructure Investment-Driven Growth + Secure, Attractive Dividend Strategic Approach Balanced Four-Part Plan Gas Transmission & Storage Expansion Utility Infrastructure Programs
Slide 8: A Compelling Investment: Industry-Leading Regulated Platform
Building Investment-Driven Growth 25-Yr Low-Risk Growth Inventory Fully De-Risked Rates 3+%/Yr. Run-Rate Growth Ongoing Low-Risk Environmental Compliance Programs Partially De-Risked Rates 3%/Yr. Run-Rate Growth Low-Risk Supply-Driven Growth + Steady Market Growth Fully De-Risked Rates 4%-6%/Yr. Gro
Slide 9: NiSource's Performance: Delivering on Our Commitments
NiSource's Performance Meeting Earnings Guidance + Demonstrated Commitment to Dividend Executing an Ambitious Regulatory Agenda 13 Base Rate Cases Delivered, Including 3 Settlements in 2010 Solid Outcome in Landmark Electric Case (8/25/10); Follow-On Case to be Filed in 4Q 2010 Revenues Significantl
Slide 10: NiSource's Performance: Execution of 2009 Liquidity Plan
NiSource's Performance Highly Successful Execution of 2009 Liquidity Plan Financing in Place Through 2011 Stable, Investment Grade Ratings $1.4B of Liquidity at 6/30/10 Significantly Improved Operations Increased Generating Capacity Reserve Margin (Sugar Creek) Substantially Enhanced Reliability/Int
Slide 11: Building Investment-Driven Growth: Sustainable, Low-Risk Growth
Building Investment-Driven Growth NiSource Gas Transmission & Storage Leveraging Unparalleled Marcellus Shale Footprint 2010 Projects Delivered On-Time, On-Budget August 2010 - Announced Marcellus Joint Development Agreement with UGI Unit NIPSCO Electric 2010-2012: Significant Earnings Uplift from E
Slide 12: NiSource Gas Transmission & Storage
BUILDING INVESTMENT-DRIVEN GROWTH se NiSource Gas Transmission & Storage
Slide 13: NiSource Gas Transmission & Storage: Great Assets, Great Markets
Annual Deliveries: 1.4 Tcf Peak Day Deliveries: 7.4 Bcf Serving 40 Markets Operations in 16 states 15,500 Pipeline Miles Capacity: 640 Bcf Daily Delivery: 4.8 Bcf Working Gas: 280 Bcf Horsepower: 1,100,000 37 Storage Fields 106 Compressor Stations Columbia Gas Transmission Columbia Gulf Transmission
Slide 14: NGT&S Business Strategy: Executing a Strategy for Long-Term Growth
Maximize Value from Existing Assets Manage Long-Term Contracts Expand Customer Base Optimize Short-Term Opportunities Operational Excellence Robust Inventory of Development Opportunities Marcellus Shale Storage Columbia Gulf Mainline Drive Growth Through Disciplined Investment 4-6% Annual Long-Term
Slide 15: NGT&S Overview: Low-Risk, Demand-Based Platform
Columbia Gas Columbia Gulf Demand 666.1 103.5 Commodity 66.5 16.7 Other 10 1.8 Firm Contracts - Weighted Average Remaining Term Firm Contracts - Weighted Average Remaining Term Columbia Gas 7.5 Years Columbia Gulf ~4 Years Columbia Gas Columbia Gulf OE 0.9 0.1 ~$865M Total ~$400M Total * 2009, Exclu
Slide 16: The NiSource Advantage: Marcellus Shale - A Game Changer
Anadarko Fortuna Range Atlas Cabot Chesapeake Chief/AB Ultra Turm XTO/EXXON Others CNX East EOG EQT Source: Range Resources (New Permitted Wells) The NiSource Advantage Location, Location, Location Marcellus Shale - A Game Changer Mineral Rights Supply Aggregation Market Centers Storage & Downstream
Slide 17: Marcellus Region Growth Inventory
Mineral Rights Supply Aggregation Market Centers Storage & Downstream Transportation Marcellus Region Growth Inventory Building Investment-Driven Growth 2010-2013 Storage ~$200M Cap-Ex 2014-Forward 6 Projects $1-1.5B Cap-Ex 2010-2014 9 Projects ~$500M Cap-Ex 2010-2013 13 Projects $200-250M Cap-Ex Th
Slide 18: NIPSCO
BUILDING INVESTMENT-DRIVEN GROWTH NIPSCO"
Slide 19: NIPSCO Electric
Indiana's Largest Combination Utility 18 Constructive Regulatory Environment Competitive Rates Solid Operating/Customer Service Metrics Environmental Leadership in Indiana $2.7B Rate Base Electric Distribution & Transmission 450,000 Electric Customers 15,500 GWH Electricity Sales 10,000 Miles of Ele
Slide 20: NIPSCO Electric Business Strategy
Charting a Course for Long-Term Growth Executing a Disciplined, Balanced Plan Restore Earnings Power Continue to Strengthen Stakeholder Relationships Capture Environmental Investment Opportunities Continuous Operational Improvement NIPSCO Electric Business Strategy 19
Slide 21: Stable Markets: NIPSCO Electric Deliveries (GWH)
Stable Markets Competitive Steel Manufacturing Base NIPSCO Electric Deliveries (GWH) 20 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 Residential 3516.1 3293.9 3543.6 3345.9 3241.4 3488.51 3451.368 3449.151 3476.865 3508.109 3540.376 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 Commercial 3893 3855.7 3
Slide 22: Executing Regulatory Agenda
Executing Regulatory Agenda 2008 Rate Case 2010 Rate Case Restoring Earnings & Positioning for Long-Term Growth 21 Filed August 2008; First Rate Case in 20 Years 2007 Test Year Prior to 2008-09 Economic Downturn and Pension Cost Spike August 25, 2010 Indiana Utility Regulatory Commission (IURC) Orde
Slide 23: Building Growth: 2012 Forward
Building Growth: 2012 Forward Sustainable, Long-Term Growth State-of-the-Art Environmental Tracker Statutory Recovery Mechanism Tracked in Semi-Annual Filings Earn Return on Investment in ~11 Months Return Based on Most Recent Allowed Level Deep Inventory of Investment Opportunities $600M+ of Ongoin
Slide 24: NiSource Gas Distribution
xxb Be AC RED ~~ | BUILDING INVESTMENT-DRIVE GROWTH ND) NISOURCE
Slide 25: Leading Portfolio of Gas Companies
Leading Portfolio of Gas Companies NiSource Gas Distribution 24 Columbia Gas of Pennsylvania 3rd Largest Natural Gas Provider in Pennsylvania 413,000 Customers 9,300+ Miles of Pipe Rate Base ~$650M Columbia Gas of Massachusetts Largest Gas-Only Provider in Massachusetts 300,000 Customers 4,800+ Mile
Slide 26: NiSource Gas Distribution Business Strategy
Executing a Strategy for Long-Term Growth Drive Growth Through Long-Term, Low-Risk Infrastructure Investments De-Risk Earnings Restore Earnings Power of NIPSCO Gas Maintain Operational Excellence Leveraging Core Regulatory Capabilities NiSource Gas Distribution (NGD) Business Strategy 25
Slide 27: State-of-the-Art Regulatory Platform
OH IN PA MA VA KY MD Levelized Rates; Decoupling; Customer Charge Increased ? Filed ? ? ? ? ? Uncollectible Expense Tracker; Gas Cost Uncollectibles in GCA ? Filed ? ? Filed ? ? Accelerated Infrastructure Tracker; Expedited Rate Treatment ? NA ? ? ? ? ? Pension/OPEB Tracker; Pension/OPEB Deferral ?
Slide 28: Trackers Deliver Strong Returns Within 12 Months
OH PA MA VA KY MD Totals Total Tracked Investment Opportunity $1.8B $1.7B $400M $150M $200M $100M $4.35B Annual Tracked Investment Range $90-110M $65-85M $20-30M $5-10M $7-10M $4-5M $190-250M AMR* Investment Opportunity $80M $22M Complete $9M $9M Complete $120M Program Length (Years) 25 20 15 NA 30
Slide 29: Restoring NIPSCO Gas Earnings
Restoring NIPSCO Gas Earnings Significant Earnings Uplift - Modest Customer Impact NIPSCO Gas 2010 Rate Case Filed May 2010 Core Objective: Restore Earnings to Appropriate Level with Minimal Customer Impact Extensive Stakeholder Outreach Unanimous Settlement Filed August 24, 2010; Targeted to be Eff
Slide 30: NiSource Financial Overview
BUILDING INVESTMENT-DRIVEN GROWTH NiSource
Slide 31: Long-Term Financial Objectives
Building Investment-Driven Growth 30 Long-Term Financial Objectives Earnings Growth and Attractive, Secure Dividend Sustainable EPS Growth of 3-5% 2010 Outlook Range of $1.10-1.20 (NOEPS)* Attractive, Stable Dividend Risk Reduction via Rate Design and Rate Case Activity at NGD and NIPSCO On-Time, On
Slide 32: Capital Allocation: 2010 and Longer-Term
Capital Allocation: 2010 and Longer-Term Accretive Investment Opportunities 31 340 384 420 285 297 340 160 205 220 20 14 15 2010 2011 Gas Distribution Gas Transmission & Storage Electric Other $800M $900M* $1,000M Illustrative Long-Term Level $1B/Year Run-Rate Cap-Ex *Approximate
Slide 33: Pro-forma Capitalization
Pro-forma Capitalization NiSource Forward Equity Issuance 32 Note: Accounting for forward equity issuance initially treats fair value of the contract as equity (typically $0). Pro forma assumes forward contract is settled with physical delivery of shares, at which point equity and cash accounts incr
Slide 34: Building Growth: 2010 - 2012
0 200 400 600 800 1000 1200 2005 2006 2007 2008 2009 2010 2012 $ Millions 33 Building Growth: 2010 - 2012 Attractive, Low-Risk Investments NI Operating Earnings* * Non-GAAP ** 2010: Mid-Point of Guidance Range; 2012: Illustrative Ongoing Regulatory Initiatives and Accretive Investments 12% ROIC ** *
Slide 35: Current Liquidity
Revolver to be Renewed by March 2011 34 Actual 6/30/10 Maturity Committed Credit Facility $1,500 Jul 2011 Less: Drawn on Credit Facility (74) Letters of Credit (1) (41) Add: Cash & Equivalents 7 Net Available Liquidity $1,392 Includes $26.6M LC for Tawney Settlement Financial Overview Current Liquid
Slide 36: Debt Refinancing Completed Through 2011
Debt Refinancing Completed Through 2011 Financial Overview 2010* 2011 2012 NI Finance 692 28 315 35 Debt Maturities ($M) $692 $28 $315 * Pre-Funded in 2009
Slide 37: Key Takeaways
Low-Risk, Regulated Business Platform 3-5% Annual EPS Growth + Secure, Attractive Dividend Stable Investment Grade Credit Exceptional Long-Term Growth Investment Opportunities Disciplined Execution with Full Transparency A Compelling Investment Proposition Building Investment-Driven Growth Key Takea