01—Abstract
Summary
Summary of the 10-K/A filed May 8, 2017. Cited figures are marked; the original filing is the authoritative source.
NiSource Inc. is an energy holding company whose subsidiaries are rate-regulated natural gas and electric utilities serving approximately 3.9 million customers in seven states.
For 2016, gross revenues were $4,492.5 milliona, down from $4,651.8 million in 2015, while operating income rose to $858.2 million from $799.9 million. Net income attributable to NiSource was $331.5 million, compared with $286.5 million in 2015, and basic earnings per share were $1.03 versus $0.90. The 2015 results reflect the July 1, 2015 spin-off of Columbia Pipeline Group, Inc., which is reported as discontinued operations.
The balance sheet shows total assets of $18,691.9 millionb at December 31, 2016, up from $17,492.5 million. Short-term borrowings increased to $1,488.0 million from $567.4 million, including $1,178.0 million of commercial paper, and total long-term debt was $6,421.3 million. Management stated the debt-to-capitalization ratio was 66% against covenant limits of 70% and 75%.
Capital expenditures were $1,475.2 millionc in cash terms for 2016. Common dividends paid fell to $205.5 million, reflecting $0.64 per share in 2016 compared with $0.83 in 2015. The filing highlights ongoing rate cases across several states and NIPSCO's 2016 Integrated Resource Plan, which proposes retiring Bailly Generating Station Units 7 and 8 by May 31, 2018 and two units at R.M.
Schahfer by the end of 2023. The filing states that NIPSCO expects over $1 billiond in operating, maintenance, environmental and other costs over the next seven years if the current coal-fired fleet remains operational. Pension plans were underfunded by $414.9 million and other postretirement plans by $297.6 million at year-end 2016.
02—Key points
Key Highlights
- Gross revenues declined to $4,492.5 million in 2016 from $4,651.8 million in 2015, while operating income increased to $858.2 million from $799.9 million.
- Net income attributable to NiSource was $331.5 million in 2016 versus $286.5 million in 2015; basic EPS was $1.03 compared with $0.90.
- Short-term borrowings rose to $1,488.0 million from $567.4 million, including $1,178.0 million of commercial paper outstanding at year-end.
- The debt-to-capitalization ratio was 66% at December 31, 2016, below the 70% revolving credit facility covenant and the 75% private placement covenant.
- NIPSCO's 2016 Integrated Resource Plan proposes retiring Bailly Generating Station Units 7 and 8 by May 31, 2018, with the MISO having approved the plan in the fourth quarter of 2016.
- Pension and other postretirement plans were underfunded by $414.9 million and $297.6 million, respectively, at December 31, 2016.
- Common dividends were $0.64 per share in 2016 versus $0.83 in 2015, and the Board declared a quarterly dividend of $0.175 per share in January 2017.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, NiSource kept $0.07.
- Revenue$4.49B100.0%
- Cost of revenue$-00.0%
- Gross profit$4.49B100.0%
- Operating costs−$3.63B80.7%
- Operating income$866.1M19.3%
- Interest, other & tax−$534.6M11.9%
- Net income$331.5M7.4%
Where FY2016 revenue went
$4.49B- Operating costs: $2.24B, 50% of revenue
- Cost of revenue: $1.39B, 31% of revenue
- Net income: $331.5M, 7.4% of revenue
- Interest, other & tax: $534.6M, 12% of revenue
Kept 7.4% as net incomeNet income $331.5M · 7.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2016filed May 8, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $4.49B$4.65B | −3.4% |
| Cost of Revenue | $1.39B$1.64B | −15.4% |
| Gross Profit | $4.49B$4.65B | −3.4% |
| Operating Expenses | $3.63B$3.85B | −5.9% |
| Operating Income | $866.10M$799.90M | +8.3% |
| Interest Expense | $349.50M$380.20M | −8.1% |
| Net Income | $331.50M$286.50M | +15.7% |
| EPS (Basic) | $1.03$0.90 | +14.4% |
| EPS (Diluted) | $1.02$0.90 | +13.3% |
| Shares Outstanding (Basic) | 321.81M317.75M | +1.3% |
| Shares Outstanding (Diluted) | 323.52M319.84M | +1.2% |
05—Questions
Frequently Asked Questions
How did NiSource's revenue and profitability change in 2016?
Gross revenues were $4,492.5 million in 2016, compared with $4,651.8 million in 2015. Operating income increased to $858.2 million from $799.9 million, and net income attributable to NiSource rose to $331.5 million from $286.5 million. The filing attributes the 2015 results partly to discontinued operations from Columbia Pipeline Group.
How much debt does NiSource carry and how is it financed?
Total long-term debt was $6,421.3 million at December 31, 2016. Short-term borrowings were $1,488.0 million, including $1,178.0 million of commercial paper under a $1.5 billion program, and $310.0 million from accounts receivable securitization. The revolving credit facility was amended in November 2016 to $1.85 billion with a termination date of November 28, 2021.
What major regulatory and infrastructure matters does the filing describe?
The filing describes multiple base rate cases, including Columbia of Virginia seeking a $37.0 million increase with a settlement of $28.5 million pending a VSCC decision, and Columbia of Pennsylvania receiving a $35.0 million increase effective December 19, 2016. It also describes NIPSCO's plan to retire Bailly Generating Station Units 7 and 8 by May 31, 2018, with $22.1 million of related retirement charges recorded in the fourth quarter of 2016.
What environmental compliance costs does NiSource disclose?
NiSource recorded environmental remediation liabilities of $111.4 million at December 31, 2016. NIPSCO estimates capital compliance costs of approximately $230 million for coal combustion residual rules and approximately $170 million for effluent limitation guidelines. The Clean Power Plan's impact is described as not yet estimable, though the filing says NIPSCO believes compliance costs would be eligible for recovery through customer rates.
06—Continue