Delaware
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35-2108964
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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801 East 86th Avenue
Merrillville, Indiana
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46410
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(Address of principal executive offices)
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(Zip Code)
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Page
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PART I
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FINANCIAL INFORMATION
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Item 1.
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Financial Statements - unaudited
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Item 2.
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Item 3.
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Item 4.
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PART II
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OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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DEFINED TERMS
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The following is a list of frequently used abbreviations or acronyms that are found in this report:
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NiSource Subsidiaries, Affiliates and Former Subsidiaries
|
|
Capital Markets
|
NiSource Capital Markets, Inc.
|
Columbia of Kentucky
|
Columbia Gas of Kentucky, Inc.
|
Columbia of Maryland
|
Columbia Gas of Maryland, Inc.
|
Columbia of Massachusetts
|
Bay State Gas Company
|
Columbia of Ohio
|
Columbia Gas of Ohio, Inc.
|
Columbia of Pennsylvania
|
Columbia Gas of Pennsylvania, Inc.
|
Columbia of Virginia
|
Columbia Gas of Virginia, Inc.
|
NIPSCO
|
Northern Indiana Public Service Company
|
NiSource or the Company
|
NiSource Inc.
|
NiSource Finance
|
NiSource Finance Corp.
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Abbreviations and Other
|
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AFUDC
|
Allowance for funds used during construction
|
AOCI
|
Accumulated Other Comprehensive Income (Loss)
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update
|
ATM
|
At-the-market
|
CAA
|
Clean Air Act
|
CCRs
|
Coal Combustion Residuals
|
CERCLA
|
Comprehensive Environmental Response Compensation and Liability Act (also known as Superfund)
|
CIAC
|
Contributions In Aid of Construction
|
CO
2
|
Carbon Dioxide
|
CPP
|
Clean Power Plan
|
DPU
|
Department of Public Utilities
|
DSM
|
Demand Side Management
|
ECR
|
Environmental Cost Recovery
|
ECT
|
Environmental Cost Tracker
|
EFV
|
Excess flow valve
|
EGUs
|
Electric Utility Generating Units
|
ELG
|
Effluent limitations guidelines
|
EPA
|
United States Environmental Protection Agency
|
EPS
|
Earnings per share
|
FAC
|
Fuel adjustment clause
|
FASB
|
Financial Accounting Standards Board
|
FERC
|
Federal Energy Regulatory Commission
|
GAAP
|
Generally Accepted Accounting Principles
|
GCA
|
Gas cost adjustment
|
GCR
|
Gas cost recovery
|
GHG
|
Greenhouse gases
|
GSEP
|
Gas System Enhancement Program
|
gwh
|
Gigawatt hours
|
IBM
|
International Business Machines Corporation
|
DEFINED TERMS
|
|
IRP
|
Infrastructure Replacement Program
|
IURC
|
Indiana Utility Regulatory Commission
|
LDCs
|
Local distribution companies
|
LIFO
|
Last in, first out
|
MGP
|
Manufactured Gas Plant
|
MISO
|
Midcontinent Independent System Operator
|
MMDth
|
Million dekatherms
|
MPSC
|
Maryland Public Service Commission
|
NAAQS
|
National Ambient Air Quality Standards
|
NOL
|
Net operating loss
|
NYMEX
|
New York Mercantile Exchange
|
OPEB
|
Other Postretirement Benefits
|
OUCC
|
Office of Utility Consumer Counselor
|
PHMSA
|
U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration
|
Pure Air
|
Pure Air on the Lake LP
|
RCRA
|
Resource Conservation and Recovery Act
|
ppb
|
Parts per billion
|
PUCO
|
Public Utilities Commission of Ohio
|
SEC
|
Securities and Exchange Commission
|
TDSIC
|
Transmission, Distribution and Storage System Improvement Charge
|
TUAs
|
Transmission Upgrade Agreements
|
VIE
|
Variable Interest Entities
|
VSCC
|
Virginia State Corporation Commission
|
Index
|
Page
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in millions, except per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Revenues
|
|
|
|
|
|
|
|||||||||
Gas Distribution
|
$
|
327.1
|
|
|
$
|
294.2
|
|
|
$
|
1,163.6
|
|
|
$
|
1,032.0
|
|
Gas Transportation
|
204.9
|
|
|
207.8
|
|
|
543.5
|
|
|
509.5
|
|
||||
Electric
|
458.0
|
|
|
391.5
|
|
|
879.7
|
|
|
783.7
|
|
||||
Other
|
0.7
|
|
|
4.1
|
|
|
2.5
|
|
|
9.0
|
|
||||
Gross Revenues
|
990.7
|
|
|
897.6
|
|
|
2,589.3
|
|
|
2,334.2
|
|
||||
Cost of Sales (excluding depreciation and amortization)
|
276.8
|
|
|
234.9
|
|
|
829.1
|
|
|
731.4
|
|
||||
Total Net Revenues
|
713.9
|
|
|
662.7
|
|
|
1,760.2
|
|
|
1,602.8
|
|
||||
Operating Expenses
|
|
|
|
|
|
|
|
||||||||
Operation and maintenance
|
391.1
|
|
|
337.6
|
|
|
801.6
|
|
|
692.3
|
|
||||
Depreciation and amortization
|
142.2
|
|
|
136.9
|
|
|
285.5
|
|
|
269.7
|
|
||||
Gain on sale of assets and impairments, net
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.3
|
)
|
||||
Other taxes
|
56.2
|
|
|
50.2
|
|
|
132.2
|
|
|
121.5
|
|
||||
Total Operating Expenses
|
589.4
|
|
|
524.5
|
|
|
1,219.2
|
|
|
1,083.2
|
|
||||
Operating Income
|
124.5
|
|
|
138.2
|
|
|
541.0
|
|
|
519.6
|
|
||||
Other Income (Deductions)
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(87.7
|
)
|
|
(86.0
|
)
|
|
(172.9
|
)
|
|
(176.5
|
)
|
||||
Other, net
|
3.8
|
|
|
(6.1
|
)
|
|
5.0
|
|
|
(5.4
|
)
|
||||
Loss on early extinguishment of long-term debt
|
(111.5
|
)
|
|
—
|
|
|
(111.5
|
)
|
|
—
|
|
||||
Total Other Deductions, Net
|
(195.4
|
)
|
|
(92.1
|
)
|
|
(279.4
|
)
|
|
(181.9
|
)
|
||||
Income (Loss) from Continuing Operations before Income Taxes
|
(70.9
|
)
|
|
46.1
|
|
|
261.6
|
|
|
337.7
|
|
||||
Income Taxes
|
(26.6
|
)
|
|
17.1
|
|
|
94.6
|
|
|
122.1
|
|
||||
Income (Loss) from Continuing Operations
|
(44.3
|
)
|
|
29.0
|
|
|
167.0
|
|
|
215.6
|
|
||||
Loss from Discontinued Operations - net of taxes
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Net Income (Loss)
|
(44.4
|
)
|
|
28.9
|
|
|
166.9
|
|
|
215.5
|
|
||||
Basic Earnings (Loss) Per Share
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.14
|
)
|
|
$
|
0.09
|
|
|
$
|
0.51
|
|
|
$
|
0.67
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Basic Earnings (Loss) Per Share
|
$
|
(0.14
|
)
|
|
$
|
0.09
|
|
|
$
|
0.51
|
|
|
$
|
0.67
|
|
Diluted Earnings (Loss) Per Share
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.14
|
)
|
|
$
|
0.09
|
|
|
$
|
0.51
|
|
|
$
|
0.67
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted Earnings (Loss) Per Share
|
$
|
(0.14
|
)
|
|
$
|
0.09
|
|
|
$
|
0.51
|
|
|
$
|
0.67
|
|
Dividends Declared Per Common Share
|
$
|
0.175
|
|
|
$
|
0.165
|
|
|
$
|
0.525
|
|
|
$
|
0.475
|
|
Basic Average Common Shares Outstanding
|
325.1
|
|
|
321.7
|
|
|
324.4
|
|
|
321.0
|
|
||||
Diluted Average Common Shares
|
325.1
|
|
|
323.2
|
|
|
325.8
|
|
|
322.8
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in millions, net of taxes)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Income (Loss)
|
$
|
(44.4
|
)
|
|
$
|
28.9
|
|
|
$
|
166.9
|
|
|
$
|
215.5
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net unrealized gain on available-for-sale securities
(1)
|
0.6
|
|
|
0.8
|
|
|
1.0
|
|
|
2.5
|
|
||||
Net unrealized loss on cash flow hedges
(2)
|
(16.8
|
)
|
|
(53.5
|
)
|
|
(11.9
|
)
|
|
(124.2
|
)
|
||||
Unrecognized pension and OPEB benefit
(3)
|
0.2
|
|
|
0.2
|
|
|
0.4
|
|
|
0.5
|
|
||||
Total other comprehensive income (loss)
|
(16.0
|
)
|
|
(52.5
|
)
|
|
(10.5
|
)
|
|
(121.2
|
)
|
||||
Comprehensive Income (Loss)
|
$
|
(60.4
|
)
|
|
$
|
(23.6
|
)
|
|
$
|
156.4
|
|
|
$
|
94.3
|
|
NiSource Inc.
Condensed Consolidated Balance Sheets (unaudited)
|
|||||||
(in millions)
|
June 30,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
||||
Property, Plant and Equipment
|
|
|
|
||||
Utility plant
|
$
|
20,206.4
|
|
|
$
|
19,368.0
|
|
Accumulated depreciation and amortization
|
(6,833.7
|
)
|
|
(6,613.7
|
)
|
||
Net utility plant
|
13,372.7
|
|
|
12,754.3
|
|
||
Other property, at cost, less accumulated depreciation
|
296.6
|
|
|
313.7
|
|
||
Net Property, Plant and Equipment
|
13,669.3
|
|
|
13,068.0
|
|
||
Investments and Other Assets
|
|
|
|
||||
Unconsolidated affiliates
|
6.0
|
|
|
6.6
|
|
||
Other investments
|
195.1
|
|
|
193.3
|
|
||
Total Investments and Other Assets
|
201.1
|
|
|
199.9
|
|
||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
17.9
|
|
|
26.4
|
|
||
Restricted cash
|
14.9
|
|
|
9.6
|
|
||
Accounts receivable (less reserve of $26.0 and $23.3, respectively)
|
545.2
|
|
|
847.0
|
|
||
Gas inventory
|
194.3
|
|
|
279.9
|
|
||
Materials and supplies, at average cost
|
96.7
|
|
|
101.7
|
|
||
Electric production fuel, at average cost
|
102.2
|
|
|
112.8
|
|
||
Exchange gas receivable
|
35.1
|
|
|
5.4
|
|
||
Regulatory assets
|
183.2
|
|
|
248.7
|
|
||
Prepayments and other
|
91.3
|
|
|
130.6
|
|
||
Total Current Assets
|
1,280.8
|
|
|
1,762.1
|
|
||
Other Assets
|
|
|
|
||||
Regulatory assets
|
1,659.4
|
|
|
1,636.7
|
|
||
Goodwill
|
1,690.7
|
|
|
1,690.7
|
|
||
Intangible assets
|
237.2
|
|
|
242.7
|
|
||
Deferred charges and other
|
84.2
|
|
|
91.8
|
|
||
Total Other Assets
|
3,671.5
|
|
|
3,661.9
|
|
||
Total Assets
|
$
|
18,822.7
|
|
|
$
|
18,691.9
|
|
NiSource Inc.
Condensed Consolidated Balance Sheets (unaudited) (continued)
|
|||||||
(in millions, except share amounts)
|
June 30,
2017 |
|
December 31,
2016 |
||||
CAPITALIZATION AND LIABILITIES
|
|
|
|
||||
Capitalization
|
|
|
|
||||
Common Stockholders’ Equity
|
|
|
|
||||
Common stock - $0.01 par value, 400,000,000 shares authorized; 325,756,677 and 323,159,672 shares outstanding, respectively
|
$
|
3.3
|
|
|
$
|
3.3
|
|
Treasury stock
|
(94.6
|
)
|
|
(88.7
|
)
|
||
Additional paid-in capital
|
5,225.3
|
|
|
5,153.9
|
|
||
Retained deficit
|
(975.6
|
)
|
|
(972.2
|
)
|
||
Accumulated other comprehensive loss
|
(35.6
|
)
|
|
(25.1
|
)
|
||
Total Common Stockholders’ Equity
|
4,122.8
|
|
|
4,071.2
|
|
||
Long-term debt, excluding amounts due within one year
|
6,777.4
|
|
|
6,058.2
|
|
||
Total Capitalization
|
10,900.2
|
|
|
10,129.4
|
|
||
Current Liabilities
|
|
|
|
||||
Current portion of long-term debt
|
561.2
|
|
|
363.1
|
|
||
Short-term borrowings
|
901.3
|
|
|
1,488.0
|
|
||
Accounts payable
|
451.1
|
|
|
539.4
|
|
||
Dividends payable
|
57.0
|
|
|
—
|
|
||
Customer deposits and credits
|
168.6
|
|
|
264.1
|
|
||
Taxes accrued
|
152.2
|
|
|
195.4
|
|
||
Interest accrued
|
104.9
|
|
|
120.3
|
|
||
Exchange gas payable
|
46.6
|
|
|
83.7
|
|
||
Regulatory liabilities
|
83.7
|
|
|
116.7
|
|
||
Legal and environmental
|
29.3
|
|
|
37.4
|
|
||
Accrued compensation and employee benefits
|
143.7
|
|
|
161.4
|
|
||
Other accruals
|
78.7
|
|
|
82.7
|
|
||
Total Current Liabilities
|
2,778.3
|
|
|
3,452.2
|
|
||
Other Liabilities
|
|
|
|
||||
Risk management liabilities
|
58.5
|
|
|
44.5
|
|
||
Deferred income taxes
|
2,617.0
|
|
|
2,528.0
|
|
||
Deferred investment tax credits
|
12.9
|
|
|
13.4
|
|
||
Accrued insurance liabilities
|
86.7
|
|
|
82.8
|
|
||
Accrued liability for postretirement and postemployment benefits
|
688.1
|
|
|
713.4
|
|
||
Regulatory liabilities
|
1,224.9
|
|
|
1,265.1
|
|
||
Asset retirement obligations
|
267.2
|
|
|
262.6
|
|
||
Other noncurrent liabilities
|
188.9
|
|
|
200.5
|
|
||
Total Other Liabilities
|
5,144.2
|
|
|
5,110.3
|
|
||
Commitments and Contingencies (Refer to Note 15, "Other Commitments and Contingencies")
|
—
|
|
|
—
|
|
||
Total Capitalization and Liabilities
|
$
|
18,822.7
|
|
|
$
|
18,691.9
|
|
NiSource Inc.
Condensed Statements of Consolidated Cash Flows (unaudited)
|
|||||||
Six Months Ended June 30,
(in millions)
|
2017
|
|
2016
|
||||
Operating Activities
|
|
|
|
||||
Net Income
|
$
|
166.9
|
|
|
$
|
215.5
|
|
Adjustments to Reconcile Net Income to Net Cash from Continuing Operations:
|
|
|
|
||||
Loss on early extinguishment of debt
|
111.5
|
|
|
—
|
|
||
Depreciation and amortization
|
285.5
|
|
|
269.7
|
|
||
Deferred income taxes and investment tax credits
|
88.4
|
|
|
117.1
|
|
||
Other adjustments
|
22.4
|
|
|
18.4
|
|
||
Changes in Assets and Liabilities:
|
|
|
|
||||
Components of working capital
|
(6.4
|
)
|
|
13.3
|
|
||
Regulatory assets/liabilities
|
23.2
|
|
|
(135.6
|
)
|
||
Other noncurrent assets
|
(1.1
|
)
|
|
—
|
|
||
Other noncurrent liabilities
|
(38.9
|
)
|
|
(10.6
|
)
|
||
Net Operating Activities from Continuing Operations
|
651.5
|
|
|
487.8
|
|
||
Net Operating Activities used for Discontinued Operations
|
(0.1
|
)
|
|
(0.7
|
)
|
||
Net Cash Flows from Operating Activities
|
651.4
|
|
|
487.1
|
|
||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(732.2
|
)
|
|
(672.5
|
)
|
||
Cost of removal
|
(55.6
|
)
|
|
(48.0
|
)
|
||
Purchases of available-for-sale securities
|
(105.6
|
)
|
|
(16.6
|
)
|
||
Sales of available-for-sale securities
|
106.6
|
|
|
18.7
|
|
||
Other investing activities
|
(4.4
|
)
|
|
3.4
|
|
||
Net Cash Flows used for Investing Activities
|
(791.2
|
)
|
|
(715.0
|
)
|
||
Financing Activities
|
|
|
|
||||
Issuance of long-term debt
|
2,000.0
|
|
|
—
|
|
||
Repayments of long-term debt and capital lease obligations
|
(1,078.4
|
)
|
|
(207.7
|
)
|
||
Premiums and other debt related costs
|
(130.7
|
)
|
|
(0.3
|
)
|
||
Change in short-term borrowings, net
|
(586.7
|
)
|
|
533.3
|
|
||
Issuance of common stock
|
46.2
|
|
|
10.0
|
|
||
Acquisition of treasury stock
|
(5.9
|
)
|
|
(7.9
|
)
|
||
Dividends paid - common stock
|
(113.2
|
)
|
|
(99.3
|
)
|
||
Net Cash Flows from Financing Activities
|
131.3
|
|
|
228.1
|
|
||
Change in cash and cash equivalents from continuing operations
|
(8.4
|
)
|
|
0.9
|
|
||
Change in cash and cash equivalents used for discontinued operations
|
(0.1
|
)
|
|
(0.7
|
)
|
||
Cash and cash equivalents at beginning of period
|
26.4
|
|
|
15.5
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
17.9
|
|
|
$
|
15.7
|
|
June 30,
(in millions)
|
2017
|
|
2016
|
||||
Non-cash transactions:
|
|
|
|
||||
Capital expenditures included in current liabilities
|
$
|
206.9
|
|
|
$
|
139.8
|
|
Dividends declared but not paid
|
$
|
57.0
|
|
|
$
|
53.0
|
|
(in millions)
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
||||||||||||
Balance as of January 1, 2017
|
$
|
3.3
|
|
|
$
|
(88.7
|
)
|
|
$
|
5,153.9
|
|
|
$
|
(972.2
|
)
|
|
$
|
(25.1
|
)
|
|
$
|
4,071.2
|
|
Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
166.9
|
|
|
—
|
|
|
166.9
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.5
|
)
|
|
(10.5
|
)
|
||||||
Common stock dividends ($0.525 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(170.3
|
)
|
|
—
|
|
|
(170.3
|
)
|
||||||
Treasury stock acquired
|
—
|
|
|
(5.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.9
|
)
|
||||||
Stock issuances:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee stock purchase plan
|
—
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
||||||
Long-term incentive plan
|
—
|
|
|
—
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
6.9
|
|
||||||
401(k) and profit sharing
|
—
|
|
|
—
|
|
|
23.7
|
|
|
—
|
|
|
—
|
|
|
23.7
|
|
||||||
Dividend reinvestment plan
|
—
|
|
|
—
|
|
|
4.6
|
|
|
—
|
|
|
—
|
|
|
4.6
|
|
||||||
ATM Program
|
—
|
|
|
—
|
|
|
33.8
|
|
|
—
|
|
|
—
|
|
|
33.8
|
|
||||||
Balance as of June 30, 2017
|
$
|
3.3
|
|
|
$
|
(94.6
|
)
|
|
$
|
5,225.3
|
|
|
$
|
(975.6
|
)
|
|
$
|
(35.6
|
)
|
|
$
|
4,122.8
|
|
Shares
(in thousands)
|
Common Shares
|
|
Treasury Shares
|
|
Outstanding Shares
|
|||
Balance as of January 1, 2017
|
326,664
|
|
|
(3,504
|
)
|
|
323,160
|
|
Treasury Stock acquired
|
|
|
(237
|
)
|
|
(237
|
)
|
|
Issued:
|
|
|
|
|
|
|||
Employee stock purchase plan
|
103
|
|
|
—
|
|
|
103
|
|
Long-term incentive plan
|
221
|
|
|
—
|
|
|
221
|
|
401(k) and profit sharing
|
996
|
|
|
—
|
|
|
996
|
|
Dividend reinvestment plan
|
196
|
|
|
—
|
|
|
196
|
|
ATM Program
|
1,318
|
|
|
—
|
|
|
1,318
|
|
Balance as of June 30, 2017
|
329,498
|
|
|
(3,741
|
)
|
|
325,757
|
|
Standard
|
Description
|
Effective Date
|
Effect on the financial statements or other significant matters
|
ASU 2017-07,
Compensation -
Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
The pronouncement changes how defined benefit pension and other postretirement benefit plans present net periodic benefit cost. The service cost component of net periodic benefit cost will be included with other employee compensation costs whereas other components of the net periodic benefit cost will be disclosed separately outside of income from operations in the income statement. Additionally, only the service cost component of net periodic benefit cost will be eligible for capitalization.
|
Annual periods beginning after December 15, 2017, including interim periods therein. Early adoption is permitted.
|
NiSource is currently evaluating the impact of adoption on the Condensed Consolidated Financial Statements (unaudited) and Notes to Condensed Consolidated Financial Statements (unaudited).
|
Standard
|
Description
|
Effective Date
|
Effect on the financial statements or other significant matters
|
ASU 2016-12,
Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients
|
The pronouncement clarifies implementation guidance in ASU 2014-09 on assessing collectability, noncash consideration and the presentation of sales and other similar taxes collected from customers.
|
Annual periods beginning after December 15, 2017, including interim periods therein. Early adoption is permitted for annual or interim periods beginning after December 15, 2016.
|
NiSource has formed an internal stakeholder group to promote information sharing and communication of the new requirements. Additionally, NiSource participates in an informal forum of industry peers where questions can be asked and interpretations of the new standard can be shared. Recently, involvement in this group has resulted in additional clarity on industry-specific issues such as treatment of CIAC, scoping of tariff arrangements and presentation of alternative revenue programs. This clarity will help to further NiSource's adoption efforts. NiSource has separated its various revenue streams into high-level categories, which serve as the basis for accounting analysis and documentation as it relates to the pronouncement's impact on NiSource's revenues. Substantially all of NiSource’s revenues are tariff based, which NiSource concluded will be in scope of ASC 606. NiSource has also undertaken efforts to outline mock footnote disclosures intended to satisfy ASC 606's disclosure requirements. NiSource expects to adopt this ASU effective January 1, 2018. As of June 30, 2017, NiSource has not concluded on a method of adoption, nor is NiSource able to estimate the impact the adoption of these standards will have on the financial statements.
|
ASU 2016-08,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations
|
The pronouncement clarifies the principal versus agent guidance in ASU 2014-09. The amendment clarifies how an entity should identify the unit of accounting for the principal versus agent evaluation, and how it should apply the control principle to certain types of arrangements.
|
||
ASU 2014-09,
Revenue from Contracts with Customers (Topic 606)
|
The pronouncement outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
|
||
ASU 2016-02,
Leases (Topic 842)
|
The pronouncement introduces a lessee model that brings most leases on the balance sheet. The standard requires that lessees recognize the following for all leases (with the exception of short-term leases, as that term is defined in the standard) at the lease commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
|
Annual periods beginning after December 15, 2018, including interim periods therein. Early adoption is permitted.
|
NiSource has formed an internal stakeholder group that meets periodically to share information and gather data related to leasing activity at NiSource. This includes compiling a list of all contracts that could meet the definition of a lease under the new standard and evaluating the accounting for these contracts under the new standard to determine the ultimate impact the new standard will have on NiSource’s financial statements. Also, this procedure has identified process improvements to ensure data from newly initiated leases is captured to comply with the new standard. This work included the assistance of a third-party advisory firm. NiSource plans to adopt this standard effective January 1, 2019.
|
Standard
|
Adoption
|
ASU 2017-09,
Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting
|
NiSource elected to adopt this ASU effective July 1, 2017. The adoption of this standard will not have a material impact on the Condensed Consolidated Financial Statements (unaudited) or Notes to Condensed Consolidated Financial Statements (unaudited).
|
ASU 2017-04,
Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
NiSource elected to adopt this ASU effective January 1, 2017. The adoption of this standard did not have a material impact on the Condensed Consolidated Financial Statements (unaudited) or Notes to Condensed Consolidated Financial Statements (unaudited).
|
ASU 2016-09,
Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
|
NiSource elected to adopt this pronouncement during the third quarter of 2016. Upon adoption, NiSource elected to begin accounting for forfeitures of share-based awards as they occur. The impact of this change was not material. Additionally, NiSource recorded a $25.3 million credit to beginning retained deficit. This adjustment represents excess tax benefits generated in years prior to 2016 that were previously not recognized in stockholders' equity due to NOLs in those years. Both of these adjustments were adopted on a modified retrospective basis. Lastly, NiSource recorded income tax benefits of $7.2 million related to excess tax benefits generated in 2016. This provision was adopted on a prospective basis. However, because NiSource adopted the standard during an interim period, the standard required this $7.2 million benefit be reflected as though it was adopted as of January 1, 2016. Quarter-to-date March 31, 2016 and June 30, 2016 earnings per share from continuing operations increased by $0.02 and $0.00, respectively, as a result of the adoption. For additional information, see Note 2, "Recent Accounting Pronouncements" in NiSource's Form 10-Q for the quarterly period ended September 30, 2016.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||
|
|
June 30,
|
|
June 30,
|
|||||
(in thousands)
|
|
2016
|
|
2017
|
|
2016
|
|||
Denominator
|
|
|
|
|
|
|
|||
Basic average common shares outstanding
|
|
321,725
|
|
|
324,386
|
|
|
321,003
|
|
Dilutive potential common shares:
|
|
|
|
|
|
|
|||
Shares contingently issuable under employee stock plans
|
|
163
|
|
|
452
|
|
|
104
|
|
Shares restricted under employee stock plans
|
|
1,316
|
|
|
975
|
|
|
1,725
|
|
Diluted Average Common Shares
|
|
323,204
|
|
|
325,813
|
|
|
322,832
|
|
(in millions)
|
June 30, 2017
|
|
December 31, 2016
|
||||
Risk Management Assets - Current
(1)
|
|
|
|
||||
Interest rate risk programs
|
$
|
—
|
|
|
$
|
17.0
|
|
Commodity price risk programs
|
0.7
|
|
|
7.4
|
|
||
Total
|
$
|
0.7
|
|
|
$
|
24.4
|
|
Risk Management Assets - Noncurrent
(2)
|
|
|
|
||||
Interest rate risk programs
|
$
|
13.7
|
|
|
$
|
17.1
|
|
Commodity price risk programs
|
3.1
|
|
|
7.5
|
|
||
Total
|
$
|
16.8
|
|
|
$
|
24.6
|
|
Risk Management Liabilities - Current
(3)
|
|
|
|
||||
Interest rate risk programs
|
$
|
—
|
|
|
$
|
15.3
|
|
Commodity price risk programs
|
4.1
|
|
|
1.5
|
|
||
Total
|
$
|
4.1
|
|
|
$
|
16.8
|
|
Risk Management Liabilities - Noncurrent
|
|
|
|
||||
Interest rate risk programs
|
$
|
34.3
|
|
|
$
|
24.5
|
|
Commodity price risk programs
|
24.2
|
|
|
20.0
|
|
||
Total
|
$
|
58.5
|
|
|
$
|
44.5
|
|
Recurring Fair Value Measurements
June 30, 2017 (in millions) |
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Balance as of June 30, 2017
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Risk management assets
|
$
|
0.3
|
|
|
$
|
16.9
|
|
|
$
|
0.3
|
|
|
$
|
17.5
|
|
Available-for-sale securities
|
—
|
|
|
128.0
|
|
|
—
|
|
|
128.0
|
|
||||
Total
|
$
|
0.3
|
|
|
$
|
144.9
|
|
|
$
|
0.3
|
|
|
$
|
145.5
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Risk management liabilities
|
$
|
3.2
|
|
|
$
|
59.4
|
|
|
$
|
—
|
|
|
$
|
62.6
|
|
Total
|
$
|
3.2
|
|
|
$
|
59.4
|
|
|
$
|
—
|
|
|
$
|
62.6
|
|
Recurring Fair Value Measurements
December 31, 2016 (in millions) |
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Balance as of
December 31, 2016
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Risk management assets
|
$
|
5.4
|
|
|
$
|
43.6
|
|
|
$
|
—
|
|
|
$
|
49.0
|
|
Available-for-sale securities
|
—
|
|
|
131.5
|
|
|
—
|
|
|
131.5
|
|
||||
Total
|
$
|
5.4
|
|
|
$
|
175.1
|
|
|
$
|
—
|
|
|
$
|
180.5
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Risk management liabilities
|
$
|
1.2
|
|
|
$
|
58.9
|
|
|
$
|
1.2
|
|
|
$
|
61.3
|
|
Total
|
$
|
1.2
|
|
|
$
|
58.9
|
|
|
$
|
1.2
|
|
|
$
|
61.3
|
|
June 30, 2017
(in millions)
|
Amortized
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair
Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury debt securities
|
$
|
29.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29.9
|
|
Corporate/Other debt securities
|
97.5
|
|
|
1.1
|
|
|
(0.5
|
)
|
|
98.1
|
|
||||
Total
|
$
|
127.4
|
|
|
$
|
1.1
|
|
|
$
|
(0.5
|
)
|
|
$
|
128.0
|
|
December 31, 2016
(in millions)
|
Amortized
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair
Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury debt securities
|
$
|
35.0
|
|
|
$
|
0.1
|
|
|
$
|
(0.6
|
)
|
|
$
|
34.5
|
|
Corporate/Other debt securities
|
98.7
|
|
|
0.3
|
|
|
(2.0
|
)
|
|
97.0
|
|
||||
Total
|
$
|
133.7
|
|
|
$
|
0.4
|
|
|
$
|
(2.6
|
)
|
|
$
|
131.5
|
|
(in millions)
|
Carrying
Amount as of June 30, 2017 |
|
Estimated Fair
Value as of June 30, 2017 |
|
Carrying
Amount as of
Dec. 31, 2016
|
|
Estimated Fair
Value as of
Dec. 31, 2016
|
||||||||
Long-term debt (including current portion)
|
$
|
7,338.6
|
|
|
$
|
8,062.3
|
|
|
$
|
6,421.3
|
|
|
$
|
7,064.1
|
|
(in millions)
|
June 30, 2017
|
|
December 31, 2016
|
||||
Gross Receivables
|
$
|
445.9
|
|
|
$
|
618.3
|
|
Less: Receivables not transferred
|
147.6
|
|
|
308.3
|
|
||
Net receivables transferred
|
$
|
298.3
|
|
|
$
|
310.0
|
|
Short-term debt due to asset securitization
|
$
|
298.3
|
|
|
$
|
310.0
|
|
(in millions)
|
|
Gas Distribution Operations
|
|
Electric Operations
|
|
Corporate and Other
|
|
Total
|
||||||||
Goodwill
|
|
$
|
1,690.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,690.7
|
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||||||||||
Three Months Ended June 30,
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
||||||||
Service cost
(1)
|
$
|
7.5
|
|
|
$
|
7.7
|
|
|
$
|
1.2
|
|
|
$
|
1.2
|
|
Interest cost
(1)
|
17.2
|
|
|
22.4
|
|
|
4.4
|
|
|
5.5
|
|
||||
Expected return on assets
|
(30.2
|
)
|
|
(33.2
|
)
|
|
(3.9
|
)
|
|
(4.3
|
)
|
||||
Amortization of prior service credit
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(1.1
|
)
|
|
(1.2
|
)
|
||||
Recognized actuarial loss
|
13.4
|
|
|
15.3
|
|
|
0.7
|
|
|
0.8
|
|
||||
Total Net Periodic Benefit Cost
|
$
|
7.7
|
|
|
$
|
12.1
|
|
|
$
|
1.3
|
|
|
$
|
2.0
|
|
(in millions)
|
June 30,
2017 |
|
December 31,
2016 |
||||
Commercial Paper weighted-average interest rate of 1.51% and 1.24% at June 30, 2017 and December 31, 2016, respectively
|
$
|
603.0
|
|
|
$
|
1,178.0
|
|
Accounts receivable securitization facility borrowings
|
298.3
|
|
|
310.0
|
|
||
Total Short-Term Borrowings
|
$
|
901.3
|
|
|
$
|
1,488.0
|
|
Three Months Ended June 30, 2017
(in millions)
|
Gains and Losses on Securities
(1)
|
|
Gains and Losses on Cash Flow Hedges
(1)
|
|
Pension and OPEB Items
(1)
|
|
Accumulated
Other
Comprehensive
Loss
(1)
|
||||||||
Balance as of April 1, 2017
|
$
|
(0.2
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(17.4
|
)
|
|
$
|
(19.6
|
)
|
Other comprehensive income (loss) before reclassifications
|
0.8
|
|
|
(18.2
|
)
|
|
0.1
|
|
|
(17.3
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
(0.2
|
)
|
|
1.4
|
|
|
0.1
|
|
|
1.3
|
|
||||
Net current-period other comprehensive income (loss)
|
0.6
|
|
|
(16.8
|
)
|
|
0.2
|
|
|
(16.0
|
)
|
||||
Balance as of June 30, 2017
|
$
|
0.4
|
|
|
$
|
(18.8
|
)
|
|
$
|
(17.2
|
)
|
|
$
|
(35.6
|
)
|
|
|
|
|
|
|
|
|
||||||||
Six Months Ended June 30, 2017
(in millions)
|
Gains and Losses on Securities
(1)
|
|
Gains and Losses on Cash Flow Hedges
(1)
|
|
Pension and OPEB Items
(1)
|
|
Accumulated
Other
Comprehensive
Loss
(1)
|
||||||||
Balance as of January 1, 2017
|
$
|
(0.6
|
)
|
|
$
|
(6.9
|
)
|
|
$
|
(17.6
|
)
|
|
$
|
(25.1
|
)
|
Other comprehensive income (loss) before reclassifications
|
1.0
|
|
|
(13.6
|
)
|
|
0.2
|
|
|
(12.4
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
1.7
|
|
|
0.2
|
|
|
1.9
|
|
||||
Net current-period other comprehensive income (loss)
|
1.0
|
|
|
(11.9
|
)
|
|
0.4
|
|
|
(10.5
|
)
|
||||
Balance as of June 30, 2017
|
$
|
0.4
|
|
|
$
|
(18.8
|
)
|
|
$
|
(17.2
|
)
|
|
$
|
(35.6
|
)
|
Three Months Ended June 30, 2016
(in millions)
|
Gains and Losses on Securities
(1)
|
|
Gains and Losses on Cash Flow Hedges
(1)
|
|
Pension and OPEB Items
(1)
|
|
Accumulated
Other Comprehensive Loss (1) |
||||||||
Balance as of April 1, 2016
|
$
|
1.2
|
|
|
$
|
(86.2
|
)
|
|
$
|
(18.8
|
)
|
|
$
|
(103.8
|
)
|
Other comprehensive income (loss) before reclassifications
|
0.9
|
|
|
(53.9
|
)
|
|
(0.1
|
)
|
|
(53.1
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
(0.1
|
)
|
|
0.4
|
|
|
0.3
|
|
|
0.6
|
|
||||
Net current-period other comprehensive income (loss)
|
0.8
|
|
|
(53.5
|
)
|
|
0.2
|
|
|
(52.5
|
)
|
||||
Balance as of June 30, 2016
|
$
|
2.0
|
|
|
$
|
(139.7
|
)
|
|
$
|
(18.6
|
)
|
|
$
|
(156.3
|
)
|
|
|
|
|
|
|
|
|
||||||||
Six Months Ended June 30, 2016
(in millions)
|
Gains and Losses on Securities
(1)
|
|
Gains and Losses on Cash Flow Hedges
(1)
|
|
Pension and OPEB Items
(1)
|
|
Accumulated
Other
Comprehensive
Loss
(1)
|
||||||||
Balance as of January 1, 2016
|
$
|
(0.5
|
)
|
|
$
|
(15.5
|
)
|
|
$
|
(19.1
|
)
|
|
$
|
(35.1
|
)
|
Other comprehensive income (loss) before reclassifications
|
2.6
|
|
|
(125.1
|
)
|
|
—
|
|
|
(122.5
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
(0.1
|
)
|
|
0.9
|
|
|
0.5
|
|
|
1.3
|
|
||||
Net current-period other comprehensive income (loss)
|
2.5
|
|
|
(124.2
|
)
|
|
0.5
|
|
|
(121.2
|
)
|
||||
Balance as of June 30, 2016
|
$
|
2.0
|
|
|
$
|
(139.7
|
)
|
|
$
|
(18.6
|
)
|
|
$
|
(156.3
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Gross Revenues
|
|
|
|
|
|
|
|
||||||||
Gas Distribution Operations
|
|
|
|
|
|
|
|
||||||||
Unaffiliated
|
$
|
532.5
|
|
|
$
|
502.4
|
|
|
$
|
1,708.8
|
|
|
$
|
1,543.2
|
|
Intersegment
|
3.6
|
|
|
3.3
|
|
|
7.1
|
|
|
6.5
|
|
||||
Total
|
536.1
|
|
|
505.7
|
|
|
1,715.9
|
|
|
1,549.7
|
|
||||
Electric Operations
|
|
|
|
|
|
|
|
||||||||
Unaffiliated
|
458.0
|
|
|
391.7
|
|
|
879.7
|
|
|
783.8
|
|
||||
Intersegment
|
0.2
|
|
|
—
|
|
|
0.4
|
|
|
0.2
|
|
||||
Total
|
458.2
|
|
|
391.7
|
|
|
880.1
|
|
|
784.0
|
|
||||
Corporate and Other
|
|
|
|
|
|
|
|
||||||||
Unaffiliated
|
0.2
|
|
|
3.5
|
|
|
0.8
|
|
|
7.2
|
|
||||
Intersegment
|
121.7
|
|
|
98.8
|
|
|
241.3
|
|
|
197.6
|
|
||||
Total
|
121.9
|
|
|
102.3
|
|
|
242.1
|
|
|
204.8
|
|
||||
Eliminations
|
(125.5
|
)
|
|
(102.1
|
)
|
|
(248.8
|
)
|
|
(204.3
|
)
|
||||
Consolidated Gross Revenues
|
$
|
990.7
|
|
|
$
|
897.6
|
|
|
$
|
2,589.3
|
|
|
$
|
2,334.2
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Gas Distribution Operations
|
$
|
45.1
|
|
|
$
|
73.5
|
|
|
$
|
385.8
|
|
|
$
|
388.4
|
|
Electric Operations
|
84.9
|
|
|
68.4
|
|
|
161.9
|
|
|
138.7
|
|
||||
Corporate and Other
|
(5.5
|
)
|
|
(3.7
|
)
|
|
(6.7
|
)
|
|
(7.5
|
)
|
||||
Consolidated Operating Income
|
$
|
124.5
|
|
|
$
|
138.2
|
|
|
$
|
541.0
|
|
|
$
|
519.6
|
|
Index
|
Page
|
Results and Discussion of Segment Operations
|
|
Gas Distribution Operations
|
|
Electric Operations
|
|
Off Balance Sheet
Arrangements
|
|
•
|
Columbia of Ohio's application for a five year extension of its IRP remains pending before the PUCO. This well-established pipeline replacement program, which is currently authorized through December 31, 2017, covers replacement of priority mainline pipe and targeted customer service lines. A PUCO order is expected by the end of the year.
|
•
|
Columbia of Maryland's base rate case remains pending before the MPSC. The request, filed April 14, 2017, seeks to adjust the company's base rates so it can continue to expedite the replacement of aging pipe as well as adopt additional pipeline safety upgrades. On July 28, 2017, all parties filed a settlement agreement with the MPSC which, if approved as filed, would result in an annual revenue increase of
$2.4 million
, effective in late October 2017.
|
•
|
NIPSCO continues to execute on its seven-year, $845 million gas infrastructure modernization program to further improve system reliability and safety. On June 28, 2017, the IURC approved NIPSCO's latest semi-annual tracker update covering approximately $61 million of investments that were made in the second half of 2016.
|
•
|
NIPSCO's request, filed in November 2016, to invest in environmental upgrades at its Michigan City Unit 12 and R.M. Schahfer Units 14 and 15 generating facilities remains pending before the IURC. On June 9, 2017, NIPSCO, along with the Indiana OUCC, the Citizens Action Coalition and a group of NIPSCO industrial customers, submitted a settlement agreement seeking, among other things, approval and cost recovery for the CCR projects and moving ELG-related investments to a later proceeding. An IURC order is expected before the end of 2017.
|
•
|
NIPSCO continues to execute on its seven-year electric infrastructure modernization program, which includes enhancements to its electric transmission and distribution system designed to further improve system safety and reliability. The IURC-approved program represents approximately
$1.25 billion
of electric infrastructure investments expected to be made through 2022. In February 2017, NIPSCO began recovering on $
45.5 million
of these investments. On June 30, 2017, NIPSCO filed with the IURC its latest tracker update request, covering
$177.3 million
of cumulative net capital expenditures through April 30, 2017. An order is expected by the fourth quarter of 2017.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions, except per share amounts)
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||
Total Net Revenues
|
$
|
713.9
|
|
|
$
|
662.7
|
|
|
$
|
51.2
|
|
|
$
|
1,760.2
|
|
|
$
|
1,602.8
|
|
|
$
|
157.4
|
|
Total Operating Expenses
|
589.4
|
|
|
524.5
|
|
|
64.9
|
|
|
1,219.2
|
|
|
1,083.2
|
|
|
136.0
|
|
||||||
Operating Income
|
124.5
|
|
|
138.2
|
|
|
(13.7
|
)
|
|
541.0
|
|
|
519.6
|
|
|
21.4
|
|
||||||
Total Other Deductions, net
|
(195.4
|
)
|
|
(92.1
|
)
|
|
(103.3
|
)
|
|
(279.4
|
)
|
|
(181.9
|
)
|
|
(97.5
|
)
|
||||||
Income Taxes
|
(26.6
|
)
|
|
17.1
|
|
|
(43.7
|
)
|
|
94.6
|
|
|
122.1
|
|
|
(27.5
|
)
|
||||||
Loss from Discontinued Operations - net of taxes
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
||||||
Net Income (Loss)
|
(44.4
|
)
|
|
28.9
|
|
|
(73.3
|
)
|
|
166.9
|
|
|
215.5
|
|
|
(48.6
|
)
|
||||||
Basic Earnings (Loss) Per Share from Continuing Operations
|
$
|
(0.14
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.23
|
)
|
|
$
|
0.51
|
|
|
$
|
0.67
|
|
|
$
|
(0.16
|
)
|
Basic Average Common Shares Outstanding
|
325.1
|
|
|
321.7
|
|
|
3.4
|
|
|
324.4
|
|
|
321.0
|
|
|
3.4
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales revenues
|
$
|
536.1
|
|
|
$
|
505.7
|
|
|
$
|
30.4
|
|
|
$
|
1,715.9
|
|
|
$
|
1,549.7
|
|
|
$
|
166.2
|
|
Less: Cost of gas sold (excluding depreciation and amortization)
|
131.2
|
|
|
116.1
|
|
|
15.1
|
|
|
567.4
|
|
|
493.5
|
|
|
73.9
|
|
||||||
Net Revenues
|
404.9
|
|
|
389.6
|
|
|
15.3
|
|
|
1,148.5
|
|
|
1,056.2
|
|
|
92.3
|
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operation and maintenance
|
251.8
|
|
|
216.5
|
|
|
35.3
|
|
|
534.4
|
|
|
454.9
|
|
|
79.5
|
|
||||||
Depreciation and amortization
|
66.3
|
|
|
63.3
|
|
|
3.0
|
|
|
131.6
|
|
|
124.5
|
|
|
7.1
|
|
||||||
Other taxes
|
41.7
|
|
|
36.3
|
|
|
5.4
|
|
|
96.7
|
|
|
88.4
|
|
|
8.3
|
|
||||||
Total Operating Expenses
|
359.8
|
|
|
316.1
|
|
|
43.7
|
|
|
762.7
|
|
|
667.8
|
|
|
94.9
|
|
||||||
Operating Income
|
$
|
45.1
|
|
|
$
|
73.5
|
|
|
$
|
(28.4
|
)
|
|
$
|
385.8
|
|
|
$
|
388.4
|
|
|
$
|
(2.6
|
)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
$
|
338.4
|
|
|
$
|
325.4
|
|
|
$
|
13.0
|
|
|
$
|
1,140.2
|
|
|
$
|
1,007.2
|
|
|
$
|
133.0
|
|
Commercial
|
105.3
|
|
|
98.6
|
|
|
6.7
|
|
|
375.1
|
|
|
331.1
|
|
|
44.0
|
|
||||||
Industrial
|
45.3
|
|
|
42.0
|
|
|
3.3
|
|
|
116.8
|
|
|
103.5
|
|
|
13.3
|
|
||||||
Off-System
|
35.8
|
|
|
16.4
|
|
|
19.4
|
|
|
66.7
|
|
|
39.5
|
|
|
27.2
|
|
||||||
Other
|
11.3
|
|
|
23.3
|
|
|
(12.0
|
)
|
|
17.1
|
|
|
68.4
|
|
|
(51.3
|
)
|
||||||
Total
|
$
|
536.1
|
|
|
$
|
505.7
|
|
|
$
|
30.4
|
|
|
$
|
1,715.9
|
|
|
$
|
1,549.7
|
|
|
$
|
166.2
|
|
Sales and Transportation (MMDth)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
29.2
|
|
|
35.0
|
|
|
(5.8
|
)
|
|
142.7
|
|
|
155.8
|
|
|
(13.1
|
)
|
||||||
Commercial
|
24.6
|
|
|
26.8
|
|
|
(2.2
|
)
|
|
94.0
|
|
|
98.4
|
|
|
(4.4
|
)
|
||||||
Industrial
|
121.6
|
|
|
123.1
|
|
|
(1.5
|
)
|
|
254.4
|
|
|
263.3
|
|
|
(8.9
|
)
|
||||||
Off-System
|
11.9
|
|
|
7.8
|
|
|
4.1
|
|
|
22.7
|
|
|
19.9
|
|
|
2.8
|
|
||||||
Other
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||||
Total
|
187.3
|
|
|
192.8
|
|
|
(5.5
|
)
|
|
513.7
|
|
|
537.4
|
|
|
(23.7
|
)
|
||||||
Heating Degree Days
|
457
|
|
|
652
|
|
|
(195
|
)
|
|
2,836
|
|
|
3,264
|
|
|
(428
|
)
|
||||||
Normal Heating Degree Days
|
599
|
|
|
599
|
|
|
—
|
|
|
3,491
|
|
|
3,523
|
|
|
(32
|
)
|
||||||
% (Warmer) Colder than Normal
|
(24
|
)%
|
|
9
|
%
|
|
|
|
|
(19
|
)%
|
|
(7
|
)%
|
|
|
|||||||
Gas Distribution Customers
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
|
|
|
|
|
|
3,122,349
|
|
|
3,100,503
|
|
|
21,846
|
|
|||||||||
Commercial
|
|
|
|
|
|
|
277,187
|
|
|
275,873
|
|
|
1,314
|
|
|||||||||
Industrial
|
|
|
|
|
|
|
6,203
|
|
|
6,416
|
|
|
(213
|
)
|
|||||||||
Total
|
|
|
|
|
|
|
3,405,739
|
|
|
3,382,792
|
|
|
22,947
|
|
•
|
New rates from base-rate proceedings and infrastructure replacement programs of $19.7 million.
|
•
|
The effects of increased residential customer growth of $1.4 million.
|
•
|
Increased regulatory, tax and depreciation trackers, which are offset in expense, of $1.4 million.
|
•
|
The effects of warmer weather of $7.0 million.
|
•
|
Increased employee and administrative expenses of $17.6 million.
|
•
|
Higher outside service costs of $10.8 million.
|
•
|
Increased property taxes of $5.7 due to higher capital expenditures placed in service and an accrual adjustment recorded in 2016.
|
•
|
Higher environmental costs of $4.4 million.
|
•
|
Increased depreciation of $2.6 million due to higher capital expenditures placed in service.
|
•
|
Higher regulatory, tax and depreciation trackers, which are offset in net revenues, of $1.4 million.
|
•
|
New rates from base-rate proceedings and infrastructure replacement programs of $81.0 million.
|
•
|
Higher regulatory, tax and depreciation trackers, which are offset in expense, of $23.7 million.
|
•
|
The effects of increased residential customer growth of $4.4 million.
|
•
|
The effects of warmer weather of $14.8 million.
|
•
|
Increased employee and administrative expenses of $27.8 million.
|
•
|
Higher regulatory, tax and depreciation trackers, which are offset in net revenues, of $23.7 million.
|
•
|
Higher outside service costs of $20.1 million.
|
•
|
Increased property taxes of $7.3 million due to higher capital expenditures placed in service and an accrual adjustment recorded in 2016.
|
•
|
Increased depreciation of $6.1 million due to higher capital expenditures placed in service.
|
•
|
Higher environmental costs of $4.4 million.
|
•
|
Higher material and supplies expense of $1.7 million.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales revenues
|
$
|
458.2
|
|
|
$
|
391.7
|
|
|
$
|
66.5
|
|
|
$
|
880.1
|
|
|
$
|
784.0
|
|
|
$
|
96.1
|
|
Less: Cost of sales (excluding depreciation and amortization)
|
145.7
|
|
|
118.9
|
|
|
26.8
|
|
|
261.9
|
|
|
238.0
|
|
|
23.9
|
|
||||||
Net Revenues
|
312.5
|
|
|
272.8
|
|
|
39.7
|
|
|
618.2
|
|
|
546.0
|
|
|
72.2
|
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operation and maintenance
|
146.0
|
|
|
124.6
|
|
|
21.4
|
|
|
285.4
|
|
|
244.5
|
|
|
40.9
|
|
||||||
Depreciation and amortization
|
70.2
|
|
|
68.9
|
|
|
1.3
|
|
|
142.2
|
|
|
135.9
|
|
|
6.3
|
|
||||||
Other taxes
|
11.4
|
|
|
10.9
|
|
|
0.5
|
|
|
28.7
|
|
|
26.9
|
|
|
1.8
|
|
||||||
Total Operating Expenses
|
227.6
|
|
|
204.4
|
|
|
23.2
|
|
|
456.3
|
|
|
407.3
|
|
|
49.0
|
|
||||||
Operating Income
|
$
|
84.9
|
|
|
$
|
68.4
|
|
|
$
|
16.5
|
|
|
$
|
161.9
|
|
|
$
|
138.7
|
|
|
$
|
23.2
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Residential
|
$
|
110.0
|
|
|
$
|
98.4
|
|
|
$
|
11.6
|
|
|
$
|
225.7
|
|
|
$
|
201.0
|
|
|
$
|
24.7
|
|
Commercial
|
123.7
|
|
|
105.6
|
|
|
18.1
|
|
|
244.4
|
|
|
209.1
|
|
|
35.3
|
|
||||||
Industrial
|
180.8
|
|
|
151.8
|
|
|
29.0
|
|
|
359.9
|
|
|
313.6
|
|
|
46.3
|
|
||||||
Wholesale
|
2.5
|
|
|
2.6
|
|
|
(0.1
|
)
|
|
5.3
|
|
|
5.1
|
|
|
0.2
|
|
||||||
Other
|
41.2
|
|
|
33.3
|
|
|
7.9
|
|
|
44.8
|
|
|
55.2
|
|
|
(10.4
|
)
|
||||||
Total
|
$
|
458.2
|
|
|
$
|
391.7
|
|
|
$
|
66.5
|
|
|
$
|
880.1
|
|
|
$
|
784.0
|
|
|
$
|
96.1
|
|
Sales (Gigawatt Hours)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Residential
|
769.0
|
|
|
793.8
|
|
|
(24.8
|
)
|
|
1,521.6
|
|
|
1,597.4
|
|
|
(75.8
|
)
|
||||||
Commercial
|
930.4
|
|
|
940.1
|
|
|
(9.7
|
)
|
|
1,825.4
|
|
|
1,852.0
|
|
|
(26.6
|
)
|
||||||
Industrial
|
2,438.5
|
|
|
2,295.2
|
|
|
143.3
|
|
|
4,801.8
|
|
|
4,715.9
|
|
|
85.9
|
|
||||||
Wholesale
|
1.7
|
|
|
1.3
|
|
|
0.4
|
|
|
21.9
|
|
|
1.3
|
|
|
20.6
|
|
||||||
Other
|
31.7
|
|
|
30.6
|
|
|
1.1
|
|
|
65.1
|
|
|
65.1
|
|
|
—
|
|
||||||
Total
|
4,171.3
|
|
|
4,061.0
|
|
|
110.3
|
|
|
8,235.8
|
|
|
8,231.7
|
|
|
4.1
|
|
||||||
Cooling Degree Days
|
264
|
|
|
285
|
|
|
(21
|
)
|
|
264
|
|
|
285
|
|
|
(21
|
)
|
||||||
Normal Cooling Degree Days
|
229
|
|
|
229
|
|
|
|
|
|
229
|
|
|
229
|
|
|
|
|
||||||
% Warmer than Normal
|
15
|
%
|
|
24
|
%
|
|
|
|
|
15
|
%
|
|
24
|
%
|
|
|
|
||||||
Electric Customers
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
|
|
|
|
|
|
407,406
|
|
|
405,443
|
|
|
1,963
|
|
|||||||||
Commercial
|
|
|
|
|
|
|
55,804
|
|
|
55,270
|
|
|
534
|
|
|||||||||
Industrial
|
|
|
|
|
|
|
2,309
|
|
|
2,343
|
|
|
(34
|
)
|
|||||||||
Wholesale
|
|
|
|
|
|
|
743
|
|
|
742
|
|
|
1
|
|
|||||||||
Other
|
|
|
|
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|||||||||
Total
|
|
|
|
|
|
|
466,264
|
|
|
463,800
|
|
|
2,464
|
|
•
|
New rates from base-rate proceedings of $21.2 million.
|
•
|
Higher regulatory and depreciation trackers, which are offset in expense, of $8.3 million.
|
•
|
Increased rates from incremental capital spend on electric transmission projects of $5.0 million.
|
•
|
Greater industrial and commercial usage of $3.5 million.
|
•
|
Increased outside service costs of $8.4 million, primarily due to generation-related maintenance and vegetation management activities.
|
•
|
Higher regulatory and depreciation trackers, which are offset in net revenues, of $8.3 million.
|
•
|
Increased employee and administrative expenses of $3.9 million.
|
•
|
Higher gross receipts taxes of $3.4 million driven by higher revenues.
|
•
|
Decreased amortization expense of $3.6 million.
|
•
|
New rates from base-rate proceedings of $42.1 million.
|
•
|
Higher regulatory and depreciation trackers, which are offset in expense, of $20.4 million.
|
•
|
Increased rates from incremental capital spend on electric transmission projects of $10.8 million.
|
•
|
Higher regulatory and depreciation trackers, which are offset in net revenues, of $20.4 million.
|
•
|
Increased outside service costs of $12.9 million, primarily due to generation-related maintenance and vegetation management activities.
|
•
|
Higher materials and supplies expenses of $7.9 million driven by generation-related maintenance and increased chemical usage.
|
•
|
Increased employee and administrative expenses of $9.3 million.
|
•
|
Higher gross receipts taxes of $4.7 million driven by higher revenues.
|
•
|
Decreased amortization expense of $7.2 million.
|
(in millions)
|
June 30, 2017
|
December 31, 2016
|
||||
Current Liquidity
|
|
|
||||
Revolving Credit Facility
|
$
|
1,850.0
|
|
$
|
1,850.0
|
|
Accounts Receivable Program
(1)
|
298.3
|
|
310.0
|
|
||
Less:
|
|
|
||||
Drawn on Revolving Credit Facility
|
—
|
|
—
|
|
||
Commercial Paper
|
603.0
|
|
1,178.0
|
|
||
Accounts Receivable Program Utilized
|
298.3
|
|
310.0
|
|
||
Letters of Credit Outstanding Under Credit Facility
|
13.0
|
|
14.7
|
|
||
Add:
|
|
|
||||
Cash and Cash Equivalents
|
17.9
|
|
26.4
|
|
||
Net Available Liquidity
|
$
|
1,251.9
|
|
$
|
683.7
|
|
(10.1)
|
Form of Change in Control and Termination Agreement. *
|
|
|
(31.1)
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
|
|
|
(31.2)
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
|
|
|
(32.1)
|
Certification of Chief Executive Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). *
|
|
|
(32.2)
|
Certification of Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). *
|
|
|
(101.INS)
|
XBRL Instance Document
|
|
|
(101.SCH)
|
XBRL Schema Document
|
|
|
(101.CAL)
|
XBRL Calculation Linkbase Document
|
|
|
(101.LAB)
|
XBRL Labels Linkbase Document
|
|
|
(101.PRE)
|
XBRL Presentation Linkbase Document
|
|
|
(101.DEF)
|
XBRL Definition Linkbase Document
|
|
|
*
|
Exhibit filed herewith.
|
|
|
|
NiSource Inc.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
August 2, 2017
|
By:
|
/s/ Joseph W. Mulpas
|
|
|
|
|
Joseph W. Mulpas
|
|
|
|
|
Vice President and Chief Accounting Officer
(Principal Accounting Officer
and Duly Authorized Officer)
|
(i)
|
to his/her surviving spouse; or
|
(ii)
|
if there is no surviving spouse, to his/her living descendants
per
stirpes
; or
|
(iii)
|
if there is neither a surviving spouse nor descendants, to his/her duly appointed and qualified executor or personal representative.
|
1.
|
I have reviewed this Quarterly Report of NiSource Inc. on Form 10-Q for the quarter ended
June 30, 2017
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 2, 2017
|
By:
|
|
/s/ Joseph Hamrock
|
|
|
|
|
|
Joseph Hamrock
|
|
|
|
|
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report of NiSource Inc. on Form 10-Q for the quarter ended
June 30, 2017
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 2, 2017
|
By:
|
|
/s/ Donald E. Brown
|
|
|
|
|
|
Donald E. Brown
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ Joseph Hamrock
|
|
|
|
|
Joseph Hamrock
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
Date:
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August 2, 2017
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Donald E. Brown
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Donald E. Brown
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Executive Vice President and Chief Financial Officer
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Date:
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August 2, 2017
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