NiSource Inc. (NI) Q1 2010 Earnings Call May 4, 2010; 09:00 am ET Executives Robert C. Skaggs, Jr. - President, Chief Executive Officer & Director Stephen P. Smith - Chief Financial Officer & Executive Vice President Glen Kettering - Senior Vice President of Corporate Affairs Randy Hulen - Director of Investor Relations Analyst Paul Patterson - Glenrock Associate Paul Ridzon - Keybanc Capital Markets Barry Klein - Citigroup Jonathan Lefebvre - Wells Fargo Carl Kirst - BMO Capital Markets Presentation Operator
Previous Statements by NI
» NiSource, Inc. Q4 2009 Earnings Call Transcript
» NiSource Inc. Q3 2009 Earnings Call Transcript
» NiSource Inc. Q2 2009 Earnings Call Transcript
Now I’d like to turn the call over to Bob Skaggs.Bob Skaggs Thanks Glen. Good morning everyone, and thanks for joining us today. In the sprite of continues improvement, our format for today's call will be somewhat different than our prior calls. Instead of simply reviewing the contents of our quarterly earnings release, which hopefully you’ve had an opportunity to read by now, we are going to streamline things and focus on our financial results, and the progress the team in making on our 2010 business and regulatory priorities. As part of our new approach, you’ll see we’ve added additional supplemental slides that you can refer to on www.nisource.com. We hope that you find the new format helpful and we certainly welcome your feedback. Referring to slide three, you can see that we’ve delivered first quarter net operating earnings, non-GAAP of about $200 million or $0.72 per share, compared to $0.62 per share last year. Operating earnings for the quarter were almost $405 million compared to $370 million for the same period last year. We are encouraged by these results and believe that they demonstrate the teams continuing success in executing our balanced low risk, investment driven strategy for building sustainable growth and shareholder value. With this solid start to the year, we remain on track to deliver our 2010 earnings outlook of $1.10 to $1.20 per share again non-GAAP. Part of reviewing our business results, I’ll take a moment to reiterate our four part strategy to position, build and grow NiSource. The strategy, one we’ve been consistently articulating and pursuing for the last five years is summarized on slide four. Specifically we continue to expand our gas transmission in storage business, particularly in the Marcellus shale region of the Appalachian. We continue to think our long-term utility infrastructure program with complementary regulatory initiatives. We continue to manage our financials in a disciplined, thoughtful manner, with an unwavering focus on delivering long-term value to our shareholders and other financials stack-holders; and finally we continue to manage costs and processes across the corporation.
Lets now take a look at our NiSource gas distribution unit or NGD on slide five. You’ll see NGD delivered operating earnings for the quarter of nearly $235 million, essentially flat to 2009. I’d note that this is a bit of an apples-to-oranges comparison, in particular NGDs 2010 first quarter revenues were reduced by about $20 million compared to last year, as the result of Columbia Gas of Ohio’s full implementation of the so called levelized rate design or some might say, straight fixed variable.This change effectively means that all of COH’s fixed cost will be recovered on a fixed monthly basis going forward, versus the traditional model under which a significant portion of its costs were recovered on a volumetric basis. Because the new methodology results in a more even spread of revenues over the course of the year, the revenue decrease experienced in the first quarter will be offset over the balance of the year. I’d also note that increased revenue from our other utilities, including the impact of the recent rate cases, helped to offset some of the reduced Colombia of Ohio revenue in the quarter. Looking forward, the remainder of 2010 will be quite active for NGD as we continue to synchronize our infrastructure programs with various customer and regulatory initiatives. Lets start with Indiana. As you know, Jimmy Staton is now also leading our Indiana utilities as group CEO. Jimmy has a strong track record of developing and executing regulatory and business strategies, designed to benefit customers and other key stake holders. Read the rest of this transcript for free on seekingalpha.com