Nisource Inc · NYSE:NI
Nisource — Non-Deal Roadshow (April 2018)
30 slides from Nisource's roadshow presentation, April 2018
Slide 1: NiSource Common Stock Offering and Investor Update
NiSource Common Stock Offering and Investor Update April 2018
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of federal securities laws. 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
Slide 3: NiSource Participants
NISOURCE PARTICIPANTS Joe Hamrock Donald Brown President and Chief Executive Executive Vice President and Officer Chief Financial Officer Shawn Anderson Randy Hulen Treasurer and Vice President of Chief Risk Officer Investor Relations Experienced Team, Demonstrated Track Record 3
Slide 4: Offering Summary
OFFERING SUMMARY Issuer NiSource Inc. Securities Offered Common Stock Pricing May 1, 2018 (after-close) Expected Announcement May 2, 2018 (pre-open) Expected Settlement Date May 4, 2018 Offering Size ~25 Million Shares Offering Type Private Placement with Form S-1 Registration Rights Company: 90 day
Slide 5: Premier Regulated Utility Business
PREMIER REGULATED UTILITY BUSINESS OPERATING IN DIVERSE FOOTPRINT WITH CONSTRUCTIVE STAKEHOLDER RELATIONSHIPS SIGNIFICANT SCALE ACROSS SEVEN STATES COLUMBIA GAS OF KENTUCKY ~3.5M Gas Customers ~500K Electric Customers COLUMBIA GAS OF MARYLAND COLUMBIA GAS OF MASSACHUSETTS NATURAL GAS COLUMBIA GAS OF
Slide 6: Commitments Provide Sustainable Value to All Stakeholders
BALANCED STRATEGY DRIVES BENEFITS TO ALL STAKEHOLDERS CUSTOMERS COMMUNITIES EMPLOYEES INVESTORS • Safe, Reliable System • Public Safety, • Safe, Inclusive Place • Sustainable Long-Term Community Support to Work Regulated Utility • Customer-Focused and Involvement Investment Service and Response • Ta
Slide 7: Key Investment Considerations
KEY INVESTMENT CONSIDERATIONS DRIVING SUSTAINABLE GROWTH STRONG UNDERLYING BUSINESS + EXECUTION = FINANCIAL OUTCOME • 100% Regulated Gas and • Focused Business Strategy • Expected Annual Net Operating Electric Utility Business – Infrastructure Modernization EPS and Dividend Growth of – Balanced Busi
Slide 8: First Quarter 2018 Earnings
FIRST QUARTER 2018 EARNINGS Bi i> }
Slide 9: Key Takeaways – First Quarter 2018
KEY TAKEAWAYS – FIRST QUARTER 2018 • Results on track with guidance range ▪ Net operating earnings per share (NOEPS)* of $0.77 versus $0.71 in 2017 ▪ On track to complete $1.7 to $1.8 billion of utility infrastructure investments this year • Disciplined execution of infrastructure programs and regul
Slide 10: Gas Distribution Operations – First Quarter 2018
GAS DISTRIBUTION OPERATIONS – FIRST QUARTER 2018 • Operating Earnings* $320.2M in 2018 vs. $361.9M in 2017 • Significant progress on regulatory initiatives across all states, inclusive of the impacts of tax reform • Ongoing infrastructure modernization on track and designed to further customer value
Slide 11: Electric Operations – First Quarter 2018
ELECTRIC OPERATIONS – FIRST QUARTER 2018 • Operating Earnings* $86.0M in 2018 vs. $85.0M in 2017 • Continued execution of seven-year ~$1.25B electric system modernization program • Electric transmission projects on schedule, with expected in-service dates in mid-2018 • Construction underway on envir
Slide 12: First Quarter 2018 Financial Highlights (Non-GAAP)
FIRST QUARTER 2018 FINANCIAL HIGHLIGHTS (NON-GAAP) Three Months Ended March 31 2018 2017 Change Net Revenue (Non-GAAP) $ 1,027.8 $ 1,075.3 Operation and Maintenance 402.5 410.1 Depreciation and Amortization 144.7 143.3 Other Taxes 78.9 76.0 Total Operating Expenses $ 626.1 $ 629.4 Operating Earnings
Slide 13: First Quarter 2018 Gas Distribution Results (Non-GAAP)
FIRST QUARTER 2018 GAS DISTRIBUTION RESULTS (NON-GAAP) Three Months Ended March 31 2018 2017 Change Net Revenue (Non-GAAP) $ 737.3 $ 766.7 Operation and Maintenance 287.2 284.5 Depreciation and Amortization 70.7 65.3 Other Taxes 59.2 55.0 Total Operating Expenses $ 417.1 $ 404.8 Operating Earnings*
Slide 14: First Quarter 2018 Electric Operations Results (Non-GAAP)
FIRST QUARTER 2018 ELECTRIC OPERATIONS RESULTS (NON-GAAP) Three Months Ended March 31 2018 2017 Change Net Revenue (Non-GAAP) $ 293.7 $ 311.6 Operation and Maintenance 126.2 137.3 Depreciation and Amortization 65.5 72.0 Other Taxes 16.0 17.3 Total Operating Expenses $ 207.7 $ 226.6 Operating Earning
Slide 15: NiSource Debt and Credit Profile
NISOURCE DEBT AND CREDIT PROFILE • Current debt level: ~$9.1B as of March 31, 2018 ▪ ~$7.4B of long-term debt ◦ Weighted average maturity ~18 years ◦ Weighted average interest rate of 4.8% • Solid liquidity position ▪ ~$2.4B of committed facilities in place as of March 31, 2018 ◦ ~$1.9B revolving cr
Slide 16: Financing Plan Update
FINANCING PLAN UPDATE Bi i> }
Slide 17: NiSource Financing Plan
NISOURCE FINANCING PLAN NiSource Financing Plan* ($ in Millions) 2017 2018 2019/2020 Actual Estimated Estimated Equity Block Equity Issuance None ~$600 None Planned $200 - $300 $200 - $300 ATM (At-The-Market) $315 (YTD $170) (Annually) ESPP / 401K / Other $61 $35 - $60 $35- $60 (Annually) Long-Term
Slide 18: NiSource FFO to Debt Metric Update
NISOURCE FFO TO DEBT METRIC UPDATE NiSource FFO to Debt Metric ($ in Millions) 2017 2018 2019/2020 Actual Estimated Estimated Funds From Operations 2017 Adjusted FFO* ~$1,100 2018 Primary Cash Flow Impacts Tax Reform - Regulatory Trackers / Growth +++ Other Regulatory Filings / Outcomes ++ Business
Slide 19: Key Investment Considerations
KEY INVESTMENT CONSIDERATIONS DRIVING SUSTAINABLE GROWTH STRONG UNDERLYING BUSINESS + EXECUTION = FINANCIAL OUTCOME • 100% Regulated Gas and • Focused Business Strategy • Expected Annual Net Operating Electric Utility Business – Infrastructure Modernization EPS and Dividend Growth of – Balanced Busi
Slide 20: Appendix
APPENDIX Bi i> }
Slide 21: Capital Expenditures
CAPITAL EXPENDITURES Investments Deliver Customer Value, Enhance System Safety and Reliability Estimated $1.7B - $1.8B $1.6B - $1.8B Recovery Period Annually Within 0-3 Months (Customer Growth/Transmission) Within 0-12 Months (Modernization/Environm ental) Periodic Rate Cases (Maintenance/Other) ~75
Slide 22: Liquidity and Debt Detail as of First Quarter 2018
LIQUIDITY AND DEBT DETAIL AS OF FIRST QUARTER 2018 ($M) Actual Current Liquidity 3/31/2018 Maturity Revolving Credit Facility $1,850 Nov. 28, 2021 Accounts Receivable Programs* 513 Less: Drawn on Credit Facility — Current Paper Commercial 1,054 Liquidity Accounts Receivable Programs Utilized 513 L/C
Slide 23: Natural Gas Distribution Infrastructure Programs
NATURAL GAS DISTRIBUTION INFRASTRUCTURE PROGRAMS Estimated Base Case Year-End Total Modernization Annual Company Authorized 2017 Rate Identified Modernization Recovery Program Mechanism ROE Base Investments Investments Program Investment Columbia Not $2.5B ~$4.1B ~$3.4B $220M - $270M Gas of OH Speci
Slide 24: Electric Operations Investment Programs
ELECTRIC OPERATIONS INVESTMENT PROGRAMS Infrastructure Investment Programs/Projects Estimated Identified Recovery Program/Project Program/Project Annual Investments Mechanism Length Investment Infrastructure ~$4.2B ~$135M - 20+ Years Modernization $235M Tracked Environmental ~$0.4B ~$10M - $90M Trac
Slide 25: Regulatory Update
REGULATORY UPDATE 2018 Rate Case and Program/Project Activity Company/Filing Summary Timeline Pending Approval Filed: 4/13/2018 Columbia Gas of Maryland - Base Rate Case Requested Increase: $6M Order Expected: 4Q2018 Filed: 4/13/2018 Columbia Gas of Massachusetts - Base Rate Case Requested Increase:
Slide 26: Infrastructure Investment Details
INFRASTRUCTURE INVESTMENT DETAILS Incremental Infrastructure Recovery Investments Recovery Company Investmen Mechanism Investment Filing t Effective Date Period Date Amount FY 2016 ~$236M Feb 2017 May 2017 Columbia Gas of Infrastructure Replacement Ohio Program (IRP) FY 2017 ~$207M Feb 2018 Expected
Slide 27: Reconciliation of GAAP Net Income to Net Operating Earnings
RECONCILIATION OF GAAP NET INCOME TO NET OPERATING EARNINGS Three Months Ended March 31, (in millions, except per share amounts) 2018 2017 GAAP Net Income $ 276.1 $ 211.3 Adjustments to Operating Income Operating Revenues: Weather - compared to normal 1.4 29.0 Operating Expenses: (1) Plant Retiremen
Slide 28: Reconciliation of Operating Income to Operating Earnings
RECONCILIATION OF OPERATING INCOME TO OPERATING EARNINGS Gas Corporate Electric Total Three Months Ended March 31, 2018 (in millions) Distribution and Other Operating Income (GAAP) $ 321.7 $ 83.1 $ (4.2) $ 400.6 Adjustments to Operating Income Operating Revenues: Weather - compared to normal (1.5) 2
Slide 29: NiSource Form S-3 Technical Issue
NISOURCE FORM S-3 TECHNICAL ISSUE Form S-3 eligibility requires that the registrants have timely filed all SEC reports/materials required for the preceding 12 months Technical Issue Timeline • Monday, July 10, 2017 – NiSource appointed a new board member • Friday, July 14, 2017 – NiSource filed an 8
Slide 30: 2017 Adjusted Funds From Operations (FFO) Reconciliation
2017 ADJUSTED FUNDS FROM OPERATIONS (FFO) RECONCILIATION Twelve Months Ended December 31 2017 (In millions) GAAP Net Income $ 129 Adjustments to Net Income Depreciation and Amortization 570 Loss on Extinguishment of Debt 112 Deferred Taxes 307 Adjusted Funds From Operations $ 1,118 30