NiSource Investor Day Millennium Broadway Hotel New York, New York September 12, 2012
From the Gulf Coast through the Midwest to the Northeast, our portfolio of companies serves some of the nations highest-value energy markets, with services NYSE: NI ranging from natural gas transmission, storage and local…
Todays Agenda Building Investment-Driven Growth Strategic Framework Bob Skaggs and Key Takeaways NiSource Gas Distribution, Joe Hamrock Business Unit NIPSCO Electric, Jimmy Staton Discussions NiSource Gas Transmission &…
Speaker Bios Bob Skaggs Joe Hamrock President & Chief Executive Officer Executive Vice President & Group CEO Robert (Bob) Skaggs, Jr., is president and chief executive officer NiSource Gas Distribution of NiSource Inc. He is…
Strategic Framework and Key Takeaways Bob Skaggs President & CEO September 12, 2012
NiSource Strategic Framework Position, Build & Grow NiSource Aspiration North Americas Premier Regulated Energy Company Value Regulated/Fee-Based Infrastructure Proposition Investment-Driven Growth + Attractive & Growing…
Key Takeaways Investment Inventory 25-30B/Over 15-20+ Years Modernization Environmental Investment Core Growth 1.4-1.6B/Year Maintenance Profile Midstream Up to 300M/Year Revenue Profile 90%+ Fee-Based Identifiable,…
NiSource: A Compelling Investment 5-7% EPS Growth + 3-5% Dividend Growth Balanced, Diverse and Highly Stable Portfolio of Regulated/Fee-Based Businesses Substantial (25-30B) Inventory of Accretive Investment Opportunities to…
Gas Distribution Joe Hamrock EVP & Group CEO September 12, 2012
NiSource Gas Distribution (NGD) NIPSCO Gas Columbia Gas of Massachusetts Largest LDC in Indiana 800,000 Customers Largest Gas-Only LDC 17,000 Miles of Pipe in Massachusetts Fair Value Rate Base 800M 300,000 Customers 4,800 Miles…
NGD Performance Delivering for Our Customers, Communities and Other Key Stakeholders Safety/ Reliability Top Decile/Quartile Performance Customer Experience Robust Programs and Satisfaction Scores Stakeholder Relations…
Executing a Strategy for Long-Term Growth NGD Business Strategy Executing a Strategy for Sustainable Long-Term Growth Long-Term Growth Through Investment in Infrastructure Modernization and Innovative Rate Structures Expanded…
NGD Business Strategy A Long-Term Investment-Driven Growth Strategy Expand Customer Programs 600-650M 7-9% Grow Customer Base Annual Capital Operating Earnings Investment Growth Modernize Infrastructure Growing Rate…
Long-Term Infrastructure Modernization Investments 75% Revenue-Enhancing Investments OH IN PA MA VA KY MD Totals Modernization (Tracker) 180-189M 30-45M 150-155M 50M 35M 15M 9M 469-498M /Growth Maintenance 30-31M 30-45M 20-25M…
NGD Operating Earnings* (M) Attractive, Low-Risk, Investment-Driven 2012-2017 7-9% CAGR 2009-2012 CAGR 11.3% NGD ** * Non-GAAP. For a reconciliation to GAAP, see page 15 of the 2011 NiSource Statistical Summary. **…
NGD Business Strategy NiSources Foundation Expand Customer Ongoing Disciplined Execution Programs Sustain Growth Through Long-Term Investment in Infrastructure Grow Customer Base Modernization Maintain Innovative Rate…
Appendix 17
Modernizing our Business Model Aligning Revenues, Costs and Investments OH IN PA MA VA KY MD Levelized Rates; Decoupling Uncollectible Expense Tracker; Uncollectible Commodity Adj. Accelerated Infrastructure Tracker; Expedited…
NIPSCO Electric Jimmy Staton EVP & Group CEO September 12, 2012
NIPSCO Electric Indianas Largest Combination Utility 3,300 MW Generation Capacity 78% Coal 450,000 Electric Customers Rate Base of 2.3B Strong Customer Service Stable, Balanced Regulatory Environment 22% Natural Gas…
NIPSCO Performance Delivering for Our Customers, Communities and Other Key Stakeholders Safety/ Reliability Top Quartile/Decile Performance Customer Experience Robust Programs, Significant JD Power Gains Stakeholder…
NIPSCO Electric Business Strategy Executing a Strategy for Sustainable Long-Term Growth Long-Term Growth Based on: Tracked Environmental Investments Ensuring Compliance Tracked Transmission System Enhancements Modernizing…
NIPSCO Electric Business Strategy Investment-Driven Growth Upgrade Generation Fleet 400-450M Enhance 7-9% Annual Capital Transmission System Operating Earnings Investment Growth Modernize Infrastructure Growing Rate…
NIPSCO Electric Business Strategy Upgrade Generation Fleet Plants Investment Compliance Recovery Technology Schahfer 525-775M FGDs Tracker FGD Michigan City (SO2) All Plants 80M - 200M Enhanced Mercury and Tracker…
NIPSCO Electric Business Strategy Enhance Transmission System Strategically Located at MISO/PJM SEAM Two MISO Multi-Value Projects Ongoing Work with MISO to Reduce Congestion Capital Investment FERC Allowed Returns Reynolds…
NIPSCO Electric Business Strategy Modernize Infrastructure Systematic Replacement of Aging Infrastructure Spurs Redevelopment Opportunities, Economic Growth & Jobs Improved Reliability and System Integrity; Meets Increasing…
NIPSCO Electric Operating Earnings* (M) Attractive, Low-Risk, Investment-Driven 2012-2017 7-9% CAGR 2009-2012 CAGR 14.3% NIPSCO ** Electric * Non-GAAP. For a reconciliation to GAAP, see page 17 of the 2011 NiSource…
NIPSCO Electric Business Strategy Positioned for Growth Deep Inventory of Investment Upgrade Opportunities Synched with Rate Generation Fleet Recovery Stable, Balanced Regulatory Enhance Environment Transmission System Strong…
Gas Transmission & Storage Jimmy Staton EVP & Group CEO September 12, 2012
NiSource Gas Transmission Storage (NGT&S) Strategically Located Assets 15,000+ Pipeline Miles 1.3 Tcf Throughput Overlaying Utica Nearly 300 Bcf of and Marcellus Storage Capacity; Shale Region 7.3 Bcf of Deliverability Rate…
NGT&S Footprint Strategically Located Assets Serving Markets Across 16 States 2010 US Census Population Density by County 33
NGT&S Growth Strategy 4M Integrated Investment Strategy Modernize Our Infrastructure Reconfigure Our System for an Evolving Market M M Capture Emerging Midstream Modernization Marketing Opportunities Leverage Our Minerals…
NGT&S Growth Strategy Regulated Pipeline & Storage Midstream & Minerals Rebuilding Our System in Leveraging Strategic Partnership with our Assets and Footprint Customers Developing Fee-Based Linking New Supplies to Gathering and…
NGT&S Growth Strategy 1-1.5B Strengthening Our System Foundation Self-Funded Investment Linking New Supplies to Growing Markets Providing Market 4-5B Access for Shale Supplies 3-4B Leveraging Our Minerals Assets 8-10B…
NGT&S Growth Strategy 4M Integrated Investment Strategy M M Modernization Marketing 500-700M 10-12% Annual Capital Operating Earnings Investment Growth M M Midstream Minerals Building Long-Term Sustainable Growth 38
NGT&S Growth Strategy Strengthening Our System Foundation M M Modernization Marketing M M Midstream Minerals Building Long-Term Sustainable Growth 39
Strengthening Our System Foundation M System Modernization Modernization Systematically Rebuild Our Infrastructure Improve Public Safety Increase Customer Flexibility and Reliability Earn Consistent Returns on Investments…
Strengthening Our System Foundation M Unprecedented Settlement Modernization Collaboration: Near-Unanimous Settlement Annual Investment: 300M Minimal Regulatory Lag: Annual Tracker Recovery of Return, Taxes & Depreciation Initial…
NGT&S Growth Strategy Linking New Supplies to Growing Markets M M Modernization Marketing M M Midstream Minerals Opportunistic, Disciplined Approach 42
Linking New Supplies to Growing Markets M Marketing Strategy Marketing Enhance Market Liquidity Increase Supply Optionality Provide Market Access for Emerging Appalachian Supplies Access East Coast and Gulf LNG Export…
Linking New Supplies to Growing Markets West Side Expansion M Marketing GOAL Move Marcellus Supply to Growing Southeast Markets CapEx: 200-250M INVESTMENT 440 Mdt/d TCO Expansion 540 Mdt/d Gulf Expansion Line Looping at…
Linking New Supplies to Growing Markets East Side Expansion M Marketing GOAL Provide Northern Marcellus Supplies to Northeast and Mid-Atlantic Markets INVESTMENT CapEx: 200-300M 220-300 Mdt/d TCO Expansion Pipeline…
Linking New Supplies to Growing Markets Quick Link Expansion M Marketing GOAL Deliver Utica Shale Supplies to Multiple Markets INVESTMENT CapEx: 300M 500 Mdt/d TCO Expansion Pipeline Looping, Extension Majorsville…
Linking New Supplies to Growing Markets LNG Export Opportunities M Marketing GOAL Deliver Shale Gas to LNG Export Hubs CapEx: 0.5-1.3B Cove INVESTMENT 1-2 MMdt/d TCO/Gulf Expansion Point TCO Pipeline Looping/Expansion;…
Linking New Supplies to Growing Markets Gas-Fired Generation Strategy M Marketing GOAL Fueling Coal-Fired Generation Conversions and New Builds INVESTMENT CapEx: 0.5-1B Proposed Pipeline Looping and Expansion; Plants…
Linking New Supplies to Growing Markets Warren County Expansion M Marketing GOAL Additional Capacity to Serve New 1,300MW Generating Facility INVESTMENT CapEx: 35M 250 Mdt/d TCO Expansion 2.5 Mile Pipeline Extension;…
Linking New Supplies to Growing Markets Millennium Pipeline M Marketing GOAL Deliver Marcellus Shale Supplies to Multiple Markets Hancock 40M (NiSources Share) Minisink INVESTMENT Minisink Compressor: Expand Capacity by…
NGT&S Growth Strategy Providing Market Access for Shale Supplies M M Modernization Marketing M M Midstream Minerals Attractive Investment; Fee-Based Structures 51
Providing Market Access for Shale Supplies M Midstream Strategy Midstream Leverage Location and Asset Base Pennant NI Develop Gathering and Processing NI Opportunities and Targeted NI Partnerships Big Pine Create Franchise…
Providing Market Access for Shale Supplies M Evolving Midstream Opportunities Midstream Utica Wells Drilled to Date NI Anadarko NI Antero NI Chesapeake Enervest Gulfport Hess Range Rex Developing Shell NI Shale…
Providing Market Access for Shale Supplies M Evolving Midstream Opportunities Midstream Current Active Lease Holders NI Anadarko BP NI Chesapeake Chevron NI CNX/Hess Devon EnerVest Exxon XTO Gulfport Halcon Hilcorp 2…
Providing Market Access for Shale Supplies M Evolving Midstream Opportunities Midstream First Mover in Underserved Pennant Areas NI Gathering, NI Processing and Partnership NI Opportunities Big Pine Significant Expansion…
Providing Market Access for Shale Supplies Majorsville Processing Complex Inlet/Outlet Pipelines M Midstream Gather Wet Marcellus Gas to GOAL Processing Facility and Provide Downstream Pipeline Market Access INVESTMENT…
Providing Market Access for Shale Supplies Big Pine Gathering System M Midstream Move Marcellus Gas to Market GOAL Position NGT&S as First Mover in Region CapEx: 150M Dominion Interconnect INVESTMENT 400 Mdt/d Capacity…
Providing Market Access for Shale Supplies Pennant Midstream M Midstream Establish Utica Franchise GOAL JV to Provide Gathering and Processing Services 20 Rich Gas Initial Gas Header 150M (NI Share - Phase 1) Processing…
NGT&S Growth Strategy Leveraging Our Mineral Assets M M Modernization Marketing M M Midstream Minerals Supports, Complements Midstream Strategy 59
Leveraging Our Minerals Positions M Integrated Strategy Minerals Optimize Our Minerals Position in Marcellus NI and Utica Shale Region NI Partner with NI Credible Shale Areas NGT&S System Producers Mineral Leases Fund…
Leveraging Our Minerals Positions Hilcorp Upstream Agreement M Minerals GOAL Jointly Develop and Extract Value of 100k Acres of Mineral Rights Market-Based Cash Payment Consistent with market values INVESTMENT (e.g.…
Leveraging Our Minerals Positions Significant Potential Minerals Opportunities M Minerals Expect Utica to Develop East to West Small Number NI of Wells Drilled to Date NI Area Continues NI to Evolve Shale Areas…
NGT&S Growth Strategy 1-1.5B Strengthening Our System Foundation Self-Funded Investment Linking New Supplies to Growing Markets Providing Market 4-5B Access for Shale Supplies 3-4B Leveraging Our Minerals Assets 8-10B…
NGT&S Operating Earnings* Attractive Return on Investment 2012-2017 10-12% CAGR NGT&S 400** Consistent Earnings Growth * Non-GAAP. For a reconciliation to GAAP, see page 16 of the 2011 NiSource Statistical Summary. **…
NGT&S Business Strategy Positioned for Success 8-10B Inventory of M M Investments Demonstrated Execution Modernization Marketing Disciplined Approach to the Evolving Marketplace M M Positioned for 10-12% Operating Earnings…
Long-Term Financial Baselines Earnings Growth and Highly Disciplined Stable Credit Profile Attractive, Increasing Capital Allocation and Strong Liquidity Dividend Framework Sustainable EPS Growth Investment Inventory of Commitment…
Investment Inventory by Segment Investment Infrastructure Investment Trackers & Recovery Inventory Mechanisms Across Service Territory Gas 10B Distribution Complimentary Customer Programs Energy 20+ Yrs. Conservation and Payment…
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