NiSource And CPG Outline Post-separation Business Strategies - Quick Facts

(RTTNews) - NiSource Inc. (NI) and Columbia Pipeline Group or CPG outlined their respective post-separation business strategies and growth outlooks while confirming additional details of the planned separation.

Following the separation, NiSource will remain one of the largest natural gas utility companies in the United States, serving more than 3.4 million customers in seven states under the Columbia Gas and NIPSCO brands.

NiSource reiterated its commitment to investment grade credit ratings and that it expects to grow earnings and the dividend each by 4-6 percent annually. In 2016, NiSource expects to deliver non-GAAP earnings per share of $1.00-$1.10 with planned infrastructure enhancement opportunities reaching approximately $1.4 billion.

Approximately 75 percent of these investments are expected to be focused on revenue-generating investments. The initial annualized dividend is expected to be $0.62 per share, and in aggregate with the expected CPG dividend outlined below, is 7.7 percent higher than the current NiSource dividend.

After the separation, CPG will include Columbia Gas Transmission, Columbia Gulf Transmission, Columbia Midstream Group, its ownership in Columbia Pipeline Partners (CPPL), and other current NiSource natural gas pipeline, storage and midstream holdings. In total, at separation the new public company will operate more than 15,000 miles of natural gas transmission pipelines, nearly 300 billion cubic feet of underground natural gas storage working capacity, and a growing portfolio of midstream and related facilities. CPG will be based in Houston and is expected to trade on the New York Stock Exchange under the ticker symbol "CPGX."

Expected net investment in pipeline, storage and midstream assets is expected to grow from approximately $4.6 billion at the beginning of 2015 to approximately $13.5 billion at year-end 2020. Total capital expenditures from 2016 to 2020 are expected to reach approximately $8.4 billion, of which approximately $4 billion is planned to be funded by the issuance of CPPL equity. Total capital expenditures include maintenance capital of approximately $135 million a year.

The committed project inventory is expected to deliver CPG EBITDA (non-GAAP) of approximately $680 million, excluding separation costs, in 2015, with an average annual growth rate of approximately 20 percent through 2020. As previously announced, the initial annualized dividend is expected to be $0.50 per share, with a targeted average growth rate of approximately 15 percent per year from 2016 to 2020.