Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - NISOURCE INC. | d116426d8k.htm |
| EX-10.1 - EX-10.1 - NISOURCE INC. | d116426dex101.htm |
| EX-99.1 - EX-99.1 - NISOURCE INC. | d116426dex991.htm |
| EX-2.1 - EX-2.1 - NISOURCE INC. | d116426dex21.htm |
| EX-10.2 - EX-10.2 - NISOURCE INC. | d116426dex102.htm |
Exhibit 99.2
Introduction to the Pro Forma Condensed Consolidated Financial Statements (unaudited)
On July 1, 2015, NiSource Inc. (“NiSource”) completed the separation of Columbia Pipeline Group, Inc. (“CPG”) (NYSE: CPGX) to NiSource stockholders (the “Separation”). CPG is a Delaware corporation formed by NiSource to own, operate and develop a portfolio of pipelines, storage and related midstream assets. The Separation was completed through a special stock dividend, which consisted of a distribution of one share of CPG common stock for every one share of NiSource common stock.
The Pro Forma Condensed Consolidated Financial Statements (unaudited) of NiSource have been derived from its historical consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in NiSource’s Annual Report on Form 10-K for the year ended December 31, 2014, and NiSource’s Quarterly Report on Form 10-Q for the three months ended March 31, 2015. The Pro Forma Condensed Consolidated Financial Statements (unaudited) are being presented to give effect to the Separation. Effective with the filing of NiSource’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2015, CPG will be reported as discontinued operations.
The Pro Forma Condensed Consolidated Balance Sheet (unaudited) assumes the Separation occurred on March 31, 2015. The Pro Forma Condensed Consolidated Income Statements (unaudited) assume the Separation occurred on January 1, 2012. These pro forma financial statements are for illustrative purposes only and do not reflect what NiSource’s financial position and results of operations would have been had the Separation occurred on the dates indicated above and are not necessarily indicative of NiSource’s future financial position and future results of operations. The pro forma adjustments are based on available information and certain assumptions management believes are factually supportable and are expected to have a continuing impact on NiSource’s results of operations. The actual adjustments that would have been made had the Separation occurred on the dates indicated above may have differed from the pro forma adjustments.
The adjustments to reflect the Separation of CPG include:
| • | CPG’s issuance of $2,750.0 million of debt securities and subsequent cash payment to NiSource of $2,528.0 million from net proceeds. |
| • | Repayment of approximately $2,256.5 million of long-term debt, the loss on extinguishment of debt and the elimination of interest expense and other financing costs. |
| • | Separation of CPG through a distribution to NiSource stockholders of all of the outstanding shares of common stock of CPG. |
| • | Reclassification of cost of gas from natural gas storage and transportation provided by CPG to NiSource affiliates, previously eliminated in consolidation, as third-party transactions as such services will continue after the Separation. |
| • | Adjustments for one-time costs incurred in the Separation. |
| • | Reclassification of affiliated payable balances as non-affiliate. |
| • | Adjustments of tax balances to reflect the Separation. |
Refer to the Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited) for further information on significant pro forma adjustments and assumptions.
NiSource Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet (unaudited)
March 31, 2015
| (in millions) |
NiSource Historical |
CPG Notes Offering (a) |
NiSource Debt Retirement (b) |
Separation of CPG (c) |
Pro Forma Adjustments |
NiSource Pro Forma |
||||||||||||||||||
| ASSETS |
||||||||||||||||||||||||
| Property, Plant and Equipment |
||||||||||||||||||||||||
| Utility plant |
$ | 25,593.9 | $ | — | $ | — | $ | (8,121.6 | ) | $ | — | $ | 17,472.3 | |||||||||||
| Accumulated depreciation and amortization |
(9,686.7 | ) | — | — | 3,006.7 | — | (6,680.0 | ) | ||||||||||||||||
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| Net utility plant |
15,907.2 | — | — | (5,114.9 | ) | — | 10,792.3 | |||||||||||||||||
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| Other property, at cost, less accumulated depreciation |
376.2 | — | — | — | — | 376.2 | ||||||||||||||||||
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| Net Property, Plant and Equipment |
16,283.4 | — | — | (5,114.9 | ) | — | 11,168.5 | |||||||||||||||||
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| Investments and Other Assets |
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| Unconsolidated affiliates |
447.9 | — | — | (440.3 | ) | — | 7.6 | |||||||||||||||||
| Other investments |
208.7 | — | — | (2.6 | ) | — | 206.1 | |||||||||||||||||
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| Total Investments and Other Assets |
656.6 | — | — | (442.9 | ) | — | 213.7 | |||||||||||||||||
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| Current Assets |
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| Cash and cash equivalents |
42.0 | 2,721.0 | (2,358.0 | ) | (200.3 | ) | — | 204.7 | ||||||||||||||||
| Restricted cash |
21.6 | — | — | — | — | 21.6 | ||||||||||||||||||
| Accounts receivable |
1,152.0 | — | — | (125.3 | ) | — | 1,026.7 | |||||||||||||||||
| Gas inventory |
134.4 | — | — | — | — | 134.4 | ||||||||||||||||||
| Underrecovered gas and fuel costs |
25.5 | — | — | — | — | 25.5 | ||||||||||||||||||
| Materials and supplies, at average cost |
109.0 | — | — | (25.2 | ) | — | 83.8 | |||||||||||||||||
| Electric production fuel, at average cost |
75.5 | — | — | — | — | 75.5 | ||||||||||||||||||
| Exchange gas receivable |
77.0 | — | — | (28.2 | ) | — | 48.8 | |||||||||||||||||
| Regulatory assets |
159.5 | — | — | (7.7 | ) | — | 151.8 | |||||||||||||||||
| Deferred income taxes |
277.2 | — | — | (49.2 | ) | — | 228.0 | |||||||||||||||||
| Prepayments and other |
187.3 | — | — | (60.8 | ) | — | 126.5 | |||||||||||||||||
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| Total Current Assets |
2,261.0 | 2,721.0 | (2,358.0 | ) | (496.7 | ) | — | 2,127.3 | ||||||||||||||||
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| Other Assets |
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| Regulatory assets |
1,683.2 | — | — | (148.4 | ) | — | 1,534.8 | |||||||||||||||||
| Goodwill |
3,666.2 | — | — | (1,975.5 | ) | — | 1,690.7 | |||||||||||||||||
| Intangible assets |
261.9 | — | — | — | — | 261.9 | ||||||||||||||||||
| Deferred charges and other |
86.6 | 25.0 | (2.3 | ) | (40.4 | ) | — | 68.9 | ||||||||||||||||
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| Total Other Assets |
5,697.9 | 25.0 | (2.3 | ) | (2,164.3 | ) | — | 3,556.3 | ||||||||||||||||
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| Total Assets |
$ | 24,898.9 | $ | 2,746.0 | $ | (2,360.3 | ) | $ | (8,218.8 | ) | $ | — | $ | 17,065.8 | ||||||||||
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See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
NiSource Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet (unaudited)
March 31, 2015
(Continued)
| (in millions, except share amounts) |
NiSource Historical |
CPG Notes Offering (a) |
NiSource Debt Retirement (b) |
Separation of CPG (c) |
Pro Forma Adjustments |
NiSource Pro Forma |
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| CAPITALIZATION AND LIABILITIES |
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| Capitalization |
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| NiSource Common Stockholders’ Equity |
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| Common stock - $0.01 par value, 400,000,000 shares authorized; 317,281,405 shares outstanding |
$ | 3.2 | $ | — | $ | — | $ | — | $ | — | $ | 3.2 | ||||||||||||
| Additional paid-in capital |
5,048.4 | — | — | — | — | 5,048.4 | ||||||||||||||||||
| Retained earnings |
1,597.5 | — | (58.3 | ) | (2,550.9 | ) | 3.7 | (e) | (1,022.1 | ) | ||||||||||||||
| (14.1 | ) (g) | |||||||||||||||||||||||
| Accumulated other comprehensive loss |
(46.6 | ) | — | — | 25.1 | — | (21.5 | ) | ||||||||||||||||
| Treasury stock |
(79.0 | ) | — | — | — | — | (79.0 | ) | ||||||||||||||||
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| Total NiSource Common Stockholders’ Equity |
6,523.5 | — | (58.3 | ) | (2,525.8 | ) | (10.4 | ) | 3,929.0 | |||||||||||||||
| Noncontrolling interest in consolidated subsidiaries |
946.2 | — | — | (946.2 | ) | — | — | |||||||||||||||||
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| Total Equity |
7,469.7 | — | (58.3 | ) | (3,472.0 | ) | (10.4 | ) | 3,929.0 | |||||||||||||||
| Long-term debt, excluding amounts due within one year |
7,957.9 | 2,746.0 | (1,823.7 | ) | (2,746.0 | ) | — | 6,134.2 | ||||||||||||||||
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| Total Capitalization |
15,427.6 | 2,746.0 | (1,882.0 | ) | (6,218.0 | ) | (10.4 | ) | 10,063.2 | |||||||||||||||
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| Current Liabilities |
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| Current portion of long-term debt |
462.7 | — | (431.5 | ) | — | — | 31.2 | |||||||||||||||||
| Short-term borrowings |
314.0 | — | — | — | — | 314.0 | ||||||||||||||||||
| Accounts payable |
563.9 | — | — | (44.2 | ) | 14.1 | (g) | 533.8 | ||||||||||||||||
| Dividends payable |
82.4 | — | — | — | — | 82.4 | ||||||||||||||||||
| Customer deposits and credits |
172.6 | — | — | (14.0 | ) | — | 158.6 | |||||||||||||||||
| Taxes accrued |
287.1 | — | (38.9 | ) | (96.5 | ) | — | 151.7 | ||||||||||||||||
| Interest accrued |
81.4 | — | (7.9 | ) | — | — | 73.5 | |||||||||||||||||
| Overrecovered gas and fuel costs |
172.3 | — | — | — | — | 172.3 | ||||||||||||||||||
| Exchange gas payable |
65.8 | — | — | (28.0 | ) | — | 37.8 | |||||||||||||||||
| Deferred revenue |
25.5 | — | — | (22.4 | ) | — | 3.1 | |||||||||||||||||
| Regulatory liabilities |
102.0 | — | — | (9.6 | ) | — | 92.4 | |||||||||||||||||
| Accrued capital expenditures |
80.3 | — | — | (80.3 | ) | — | — | |||||||||||||||||
| Accrued liability for postretirement and postemployment benefits |
5.9 | — | — | — | — | 5.9 | ||||||||||||||||||
| Legal and environmental |
25.4 | — | — | (0.7 | ) | — | 24.7 | |||||||||||||||||
| Other accruals |
317.1 | — | — | (57.3 | ) | (3.7 | ) (e) | 256.1 | ||||||||||||||||
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| Total Current Liabilities |
2,758.4 | — | (478.3 | ) | (353.0 | ) | 10.4 | 1,937.5 | ||||||||||||||||
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| Other Liabilities and Deferred Credits |
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| Deferred income taxes |
3,803.5 | — | — | (1,284.6 | ) | — | 2,518.9 | |||||||||||||||||
| Deferred investment tax credits |
16.7 | — | — | — | — | 16.7 | ||||||||||||||||||
| Deferred credits |
105.5 | — | — | — | — | 105.5 | ||||||||||||||||||
| Accrued liability for postretirement and postemployment benefits |
653.7 | — | — | 57.4 | — | 711.1 | ||||||||||||||||||
| Regulatory liabilities |
1,678.6 | — | — | (299.0 | ) | — | 1,379.6 | |||||||||||||||||
| Asset retirement obligations |
160.9 | — | — | (23.5 | ) | — | 137.4 | |||||||||||||||||
| Other noncurrent liabilities |
294.0 | — | — | (98.1 | ) | — | 195.9 | |||||||||||||||||
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| Total Other Liabilities and Deferred Credits |
6,712.9 | — | — | (1,647.8 | ) | — | 5,065.1 | |||||||||||||||||
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| Commitments and Contingencies |
— | — | — | — | — | — | ||||||||||||||||||
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| Total Capitalization and Liabilities |
$ | 24,898.9 | $ | 2,746.0 | $ | (2,360.3 | ) | $ | (8,218.8 | ) | $ | — | $ | 17,065.8 | ||||||||||
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See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
NiSource Inc. and Subsidiaries
Pro Forma Condensed Consolidated Income Statement (unaudited)
Three Months Ended March 31, 2015
| (in millions, except per share amounts) |
NiSource Historical |
Separation of CPG (c) |
Pro Forma Adjustments |
NiSource Pro Forma |
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| Net Revenues |
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| Gas Distribution |
$ | 1,080.7 | $ | — | $ | — | $ | 1,080.7 | ||||||||
| Gas Transportation and Storage |
628.0 | (258.7 | ) | — | 369.3 | |||||||||||
| Electric |
394.7 | — | — | 394.7 | ||||||||||||
| Other |
46.3 | (39.1 | ) | — | 7.2 | |||||||||||
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| Gross Revenues |
2,149.7 | (297.8 | ) | — | 1,851.9 | |||||||||||
| Cost of Sales (excluding depreciation and amortization) |
806.0 | (0.1 | ) | 42.2 | (d) | 848.1 | ||||||||||
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| Total Net Revenues |
1,343.7 | (297.7 | ) | (42.2 | ) | 1,003.8 | ||||||||||
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| Operating Expenses |
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| Operation and maintenance |
574.1 | (118.4 | ) | (20.5 | ) (e) | 435.2 | ||||||||||
| Depreciation and amortization |
157.5 | (32.5 | ) | — | 125.0 | |||||||||||
| Gain on sale of assets, net |
(5.0 | ) | 5.3 | — | 0.3 | |||||||||||
| Other taxes |
102.4 | (19.1 | ) | — | 83.3 | |||||||||||
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| Total Operating Expenses |
829.0 | (164.7 | ) | (20.5 | ) | 643.8 | ||||||||||
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| Equity Earnings in Unconsolidated Affiliates |
15.4 | (15.4 | ) | — | — | |||||||||||
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| Operating Income |
530.1 | (148.4 | ) | (21.7 | ) | 360.0 | ||||||||||
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| Other Income (Deductions) |
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| Interest expense, net |
(111.0 | ) | (1.2 | ) | 32.9 | (b) | (79.3 | ) | ||||||||
| Other, net |
7.1 | (4.6 | ) | — | 2.5 | |||||||||||
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| Total Other Deductions |
(103.9 | ) | (5.8 | ) | 32.9 | (76.8 | ) | |||||||||
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| Income from Continuing Operations before Income Taxes |
426.2 | (154.2 | ) | 11.2 | 283.2 | |||||||||||
| Income Taxes |
150.9 | (54.0 | ) | 4.5 | (f) | 101.4 | ||||||||||
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| Income from Continuing Operations |
275.3 | (100.2 | ) | 6.7 | 181.8 | |||||||||||
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| Less: Income attributable to noncontrolling interest |
6.9 | (6.9 | ) | — | — | |||||||||||
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| Income attributable to NiSource |
$ | 268.4 | $ | (93.3 | ) | $ | 6.7 | $ | 181.8 | |||||||
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| Income from continuing operations per share: |
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| Basic |
$ | 0.85 | $ | 0.57 | ||||||||||||
| Diluted |
$ | 0.85 | $ | 0.57 | ||||||||||||
| Average common shares outstanding |
||||||||||||||||
| Basic |
316.6 | 316.6 | ||||||||||||||
| Diluted |
317.4 | 317.4 | ||||||||||||||
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
NiSource Inc. and Subsidiaries
Pro Forma Condensed Consolidated Income Statement (unaudited)
Three Months Ended March 31, 2014
| (in millions, except per share amounts) |
NiSource Historical |
Separation of CPG (c) |
Pro Forma Adjustments |
NiSource Pro Forma |
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| Net Revenues |
||||||||||||||||
| Gas Distribution |
$ | 1,215.0 | $ | — | $ | — | $ | 1,215.0 | ||||||||
| Gas Transportation and Storage |
578.5 | (230.0 | ) | — | 348.5 | |||||||||||
| Electric |
450.0 | — | — | 450.0 | ||||||||||||
| Other |
77.0 | (73.6 | ) | — | 3.4 | |||||||||||
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| Gross Revenues |
2,320.5 | (303.6 | ) | — | 2,016.9 | |||||||||||
| Cost of Sales (excluding depreciation and amortization) |
1,061.3 | (0.1 | ) | 42.1 | (d) | 1,103.3 | ||||||||||
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| Total Net Revenues |
1,259.2 | (303.5 | ) | (42.1 | ) | 913.6 | ||||||||||
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| Operating Expenses |
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| Operation and maintenance |
501.2 | (137.2 | ) | — | 364.0 | |||||||||||
| Depreciation and amortization |
148.7 | (29.8 | ) | — | 118.9 | |||||||||||
| Gain on sale of assets, net |
(15.7 | ) | 17.5 | — | 1.8 | |||||||||||
| Other taxes |
101.1 | (18.5 | ) | — | 82.6 | |||||||||||
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| Total Operating Expenses |
735.3 | (168.0 | ) | — | 567.3 | |||||||||||
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| Equity Earnings in Unconsolidated Affiliates |
9.8 | (9.8 | ) | — | — | |||||||||||
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| Operating Income |
533.7 | (145.3 | ) | (42.1 | ) | 346.3 | ||||||||||
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| Other Income (Deductions) |
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| Interest expense, net |
(109.1 | ) | (1.5 | ) | 32.9 | (b) | (77.7 | ) | ||||||||
| Other, net |
4.5 | (1.9 | ) | — | 2.6 | |||||||||||
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| Total Other Deductions |
(104.6 | ) | (3.4 | ) | 32.9 | (75.1 | ) | |||||||||
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| Income from Continuing Operations before Income Taxes |
429.1 | (148.7 | ) | (9.2 | ) | 271.2 | ||||||||||
| Income Taxes |
162.7 | (55.8 | ) | (3.7 | ) (f) | 103.2 | ||||||||||
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|||||||||
| Income from Continuing Operations |
$ | 266.4 | $ | (92.9 | ) | $ | (5.5 | ) | $ | 168.0 | ||||||
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| Income from continuing operations per share: |
||||||||||||||||
| Basic |
$ | 0.85 | $ | 0.53 | ||||||||||||
| Diluted |
$ | 0.85 | $ | 0.53 | ||||||||||||
| Average common shares outstanding |
||||||||||||||||
| Basic |
314.2 | 314.2 | ||||||||||||||
| Diluted |
315.1 | 315.1 | ||||||||||||||
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
NiSource Inc. and Subsidiaries
Pro Forma Condensed Consolidated Income Statement (unaudited)
Year Ended December 31, 2014
| (in millions, except per share amounts) |
NiSource Historical |
Separation of CPG (c) |
Pro Forma Adjustments |
NiSource Pro Forma |
||||||||||||
| Net Revenues |
||||||||||||||||
| Gas Distribution |
$ | 2,597.8 | $ | — | $ | — | $ | 2,597.8 | ||||||||
| Gas Transportation and Storage |
1,872.7 | (885.2 | ) | — | 987.5 | |||||||||||
| Electric |
1,672.0 | — | — | 1,672.0 | ||||||||||||
| Other |
328.1 | (314.2 | ) | — | 13.9 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross Revenues |
6,470.6 | (1,199.4 | ) | — | 5,271.2 | |||||||||||
| Cost of Sales (excluding depreciation and amortization) |
2,224.2 | (0.3 | ) | 146.4 | (d) | 2,370.3 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Net Revenues |
4,246.4 | (1,199.1 | ) | (146.4 | ) | 2,900.9 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Expenses |
||||||||||||||||
| Operation and maintenance |
2,136.3 | (628.4 | ) | (19.2 | ) (e) | 1,488.7 | ||||||||||
| Depreciation and amortization |
605.5 | (118.8 | ) | — | 486.7 | |||||||||||
| Gain on sale of assets, net |
(31.5 | ) | 34.5 | — | 3.0 | |||||||||||
| Other taxes |
320.3 | (67.1 | ) | — | 253.2 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Operating Expenses |
3,030.6 | (779.8 | ) | (19.2 | ) | 2,231.6 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Equity Earnings in Unconsolidated Affiliates |
46.6 | (46.6 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Income |
1,262.4 | (465.9 | ) | (127.2 | ) | 669.3 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other Income (Deductions) |
||||||||||||||||
| Interest expense, net |
(443.6 | ) | (5.9 | ) | 131.6 | (b) | (317.9 | ) | ||||||||
| Other, net |
22.3 | (8.8 | ) | — | 13.5 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Other Deductions |
(421.3 | ) | (14.7 | ) | 131.6 | (304.4 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from Continuing Operations before Income Taxes |
841.1 | (480.6 | ) | 4.4 | 364.9 | |||||||||||
| Income Taxes |
310.4 | (186.6 | ) | 1.8 | (f) | 125.6 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from Continuing Operations |
$ | 530.7 | $ | (294.0 | ) | $ | 2.6 | $ | 239.3 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations per share: |
||||||||||||||||
| Basic |
$ | 1.68 | $ | 0.76 | ||||||||||||
| Diluted |
$ | 1.67 | $ | 0.76 | ||||||||||||
| Average common shares outstanding |
||||||||||||||||
| Basic |
315.1 | 315.1 | ||||||||||||||
| Diluted |
316.6 | 316.6 | ||||||||||||||
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
NiSource Inc. and Subsidiaries
Pro Forma Condensed Consolidated Income Statement (unaudited)
Year Ended December 31, 2013
| (in millions, except per share amounts) |
NiSource Historical |
Separation of CPG (c) |
Pro Forma Adjustments |
NiSource Pro Forma |
||||||||||||
| Net Revenues |
||||||||||||||||
| Gas Distribution |
$ | 2,226.3 | $ | — | $ | — | $ | 2,226.3 | ||||||||
| Gas Transportation and Storage |
1,643.2 | (823.2 | ) | — | 820.0 | |||||||||||
| Electric |
1,563.4 | — | — | 1,563.4 | ||||||||||||
| Other |
224.4 | (210.0 | ) | — | 14.4 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross Revenues |
5,657.3 | (1,033.2 | ) | — | 4,624.1 | |||||||||||
| Cost of Sales (excluding depreciation and amortization) |
1,815.5 | (0.4 | ) | 147.9 | (d) | 1,963.0 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Net Revenues |
3,841.8 | (1,032.8 | ) | (147.9 | ) | 2,661.1 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Expenses |
||||||||||||||||
| Operation and maintenance |
1,873.9 | (509.0 | ) | — | 1,364.9 | |||||||||||
| Depreciation and amortization |
577.3 | (107.0 | ) | — | 470.3 | |||||||||||
| Gain on sale of assets, net |
(17.5 | ) | 18.6 | — | 1.1 | |||||||||||
| Other taxes |
300.6 | (62.2 | ) | — | 238.4 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Operating Expenses |
2,734.3 | (659.6 | ) | — | 2,074.7 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Equity Earnings in Unconsolidated Affiliates |
35.9 | (35.9 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Income |
1,143.4 | (409.1 | ) | (147.9 | ) | 586.4 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other Income (Deductions) |
||||||||||||||||
| Interest expense, net |
(414.8 | ) | (6.2 | ) | 131.6 | (b) | (289.4 | ) | ||||||||
| Other, net |
24.2 | (17.9 | ) | — | 6.3 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Other Deductions |
(390.6 | ) | (24.1 | ) | 131.6 | (283.1 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from Continuing Operations before Income Taxes |
752.8 | (433.2 | ) | (16.3 | ) | 303.3 | ||||||||||
| Income Taxes |
261.9 | (152.5 | ) | (6.5 | ) (f) | 102.9 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from Continuing Operations |
$ | 490.9 | $ | (280.7 | ) | $ | (9.8 | ) | $ | 200.4 | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations per share: |
||||||||||||||||
| Basic |
$ | 1.57 | $ | 0.64 | ||||||||||||
| Diluted |
$ | 1.57 | $ | 0.64 | ||||||||||||
| Average common shares outstanding |
||||||||||||||||
| Basic |
312.4 | 312.4 | ||||||||||||||
| Diluted |
313.6 | 313.6 | ||||||||||||||
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
NiSource Inc. and Subsidiaries
Pro Forma Condensed Consolidated Income Statement (unaudited)
Year Ended December 31, 2012
| (in millions, except per share amounts) |
NiSource Historical |
Separation of CPG (c) |
Pro Forma Adjustments |
NiSource Pro Forma |
||||||||||||
| Net Revenues |
||||||||||||||||
| Gas Distribution |
$ | 1,959.8 | $ | — | $ | — | $ | 1,959.8 | ||||||||
| Gas Transportation and Storage |
1,462.4 | (770.0 | ) | — | 692.4 | |||||||||||
| Electric |
1,507.7 | — | — | 1,507.7 | ||||||||||||
| Other |
101.0 | (84.1 | ) | — | 16.9 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross Revenues |
5,030.9 | (854.1 | ) | — | 4,176.8 | |||||||||||
| Cost of Sales (excluding depreciation and amortization) |
1,516.9 | (1.1 | ) | 147.9 | (d) | 1,663.7 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Net Revenues |
3,514.0 | (853.0 | ) | (147.9 | ) | 2,513.1 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Expenses |
||||||||||||||||
| Operation and maintenance |
1,660.3 | (375.9 | ) | — | 1,284.4 | |||||||||||
| Depreciation and amortization |
561.9 | (99.4 | ) | — | 462.5 | |||||||||||
| Gain on sale of assets, net |
(3.8 | ) | 0.6 | — | (3.2 | ) | ||||||||||
| Other taxes |
287.7 | (59.2 | ) | — | 228.5 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Operating Expenses |
2,506.1 | (533.9 | ) | — | 1,972.2 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Equity Earnings in Unconsolidated Affiliates |
32.2 | (32.2 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Income |
1,040.1 | (351.3 | ) | (147.9 | ) | 540.9 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other Income (Deductions) |
||||||||||||||||
| Interest expense, net |
(418.3 | ) | (9.5 | ) | 131.6 | (b) | (296.2 | ) | ||||||||
| Other, net |
1.7 | (2.1 | ) | — | (0.4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Other Deductions |
(416.6 | ) | (11.6 | ) | 131.6 | (296.6 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from Continuing Operations before Income Taxes |
623.5 | (362.9 | ) | (16.3 | ) | 244.3 | ||||||||||
| Income Taxes |
214.7 | (138.3 | ) | (6.5 | ) (f) | 69.9 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from Continuing Operations |
$ | 408.8 | $ | (224.6 | ) | $ | (9.8 | ) | $ | 174.4 | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations per share: |
||||||||||||||||
| Basic |
$ | 1.40 | $ | 0.60 | ||||||||||||
| Diluted |
$ | 1.36 | $ | 0.58 | ||||||||||||
| Average common shares outstanding |
||||||||||||||||
| Basic |
291.9 | 291.9 | ||||||||||||||
| Diluted |
300.4 | 300.4 | ||||||||||||||
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
NiSource Inc. and Subsidiaries
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Financing Adjustments
(a) In May 2015, Columbia Pipeline Group, Inc. (“CPG”) completed the issuance of $2,750 million of senior notes. CPG received approximately $2,721.0 million from the offering net of issuance costs and discounts. CPG made a cash payment to NiSource Inc. (“NiSource”) of approximately $2,528.0 million from the proceeds of the offering. Proceeds from the cash payment from CPG to NiSource were used by NiSource for debt retirement.
(b) Represents the elimination of interest expense and other financing costs related to approximately $2,256.5 million of debt retired post-Separation at NiSource. Interest expense was calculated using NiSource’s weighted average rate of long-term debt.
In May 2015, NiSource settled its two bank term loans in the amount of $1,075.0 million and executed a tender offer for $750.0 million of its 5.250% Notes due 2017, 6.400% Notes due 2018 and 4.450% Notes due 2021. Additionally, NiSource anticipates using the cash proceeds to repay $230.0 million of private placement debt maturing in November 2015 and $201.5 million of senior unsecured debt due to mature in March 2016. In conjunction with the retired debt, NiSource paid premiums of $91.7 million, accrued interest of $7.9 million, and recognized charges of $2.3 million, $1.9 million and $1.3 million related to the write-off of unamortized debt issuance costs, dealer manager fees and unamortized discount, respectively. The impact of these charges within retained earnings reflects the application of a blended statutory tax rate of 40 percent.
Distribution Adjustments
(c) On July 1, 2015, NiSource completed the Separation. Amounts presented are the adjustments to remove the historical balances and results of operations for the natural gas pipeline and related businesses from NiSource’s consolidated financial statements. Balances are net of affiliated transactions.
Other Pro Forma Adjustments
(d) Represents the reclassification of cost of gas from natural gas storage and transportation provided by CPG to NiSource affiliates, previously eliminated in consolidation, as third-party transactions. Such services are expected to continue after the Separation.
(e) Reflects adjustments for one-time costs incurred in the Separation. These costs have been eliminated from the income statement as the charges are nonrecurring. Charges accrued have been included as an adjustment in the balance sheet. We expect to incur additional charges after the Separation; however, such amounts have not been included as pro forma adjustments as the amounts are not objectively determinable or factually supportable.
(f) Represents the tax effect of the pro forma adjustments to income using a blended statutory rate of 40 percent for all periods.
(g) Reclassification of affiliated payable balances with CPG to non-affiliated.
Following the Separation, we anticipate changes to operating expenses associated with shared corporate services functions. No pro forma adjustments have been made for these expenses as an estimate of the changes to these expenses is not objectively determinable.
In connection with the Separation, we entered into the Separation and Distribution Agreement and several other agreements with CPG to effect the Separation and provide a framework for our relationship with CPG after the distribution. These other agreements include:
| • | Transition Services Agreements; |
| • | Tax Allocation Agreement; and |
| • | Employee Matters Agreement. |
No adjustments have been made related to these agreements as any such adjustments would be considered not objectively determinable or, for income statement purposes, nonrecurring in nature.