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
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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.
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NIPSCO
|
Northern Indiana Public Service Company LLC
|
NiSource ("we," "us" or “our”)
|
NiSource Inc.
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Abbreviations and Other
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ACE
|
Affordable Clean Energy
|
AFUDC
|
Allowance for funds used during construction
|
AMRP
|
Accelerated Main Replacement Program
|
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
|
CEP
|
Capital Expenditure Program
|
CERCLA
|
Comprehensive Environmental Response Compensation and Liability Act (also known as Superfund)
|
CO
2
|
Carbon Dioxide
|
CPP
|
Clean Power Plan
|
DPU
|
Department of Public Utilities
|
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
|
IRP
|
Infrastructure Replacement Program
|
IRS
|
Internal Revenue Service
|
IURC
|
Indiana Utility Regulatory Commission
|
LDCs
|
Local distribution companies
|
LIBOR
|
London InterBank Offered Rate
|
DEFINED TERMS
|
|
LIFO
|
Last In, First Out
|
MGP
|
Manufactured Gas Plant
|
MISO
|
Midcontinent Independent System Operator
|
MMDth
|
Million dekatherms
|
NOL
|
Net operating loss
|
NTSB
|
National Transportation Safety Board
|
NYMEX
|
New York Mercantile Exchange
|
OPEB
|
Other Postretirement Benefits
|
PHMSA
|
Pipeline and Hazardous Materials Safety Administration
|
PSC
|
Public Service Commission
|
PUC
|
Public Utility Commission
|
PUCO
|
Public Utilities Commission of Ohio
|
Pure Air
|
Pure Air on the Lake LP
|
RCRA
|
Resource Conservation and Recovery Act
|
SEC
|
Securities and Exchange Commission
|
STRIDE
|
Strategic Infrastructure Development Enhancement
|
TCJA
|
An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (commonly known as the Tax Cuts and Jobs Act of 2017)
|
TDSIC
|
Transmission, Distribution and Storage System Improvement Charge
|
VIE
|
Variable Interest Entities
|
VSCC
|
Virginia State Corporation Commission
|
WCE
|
Whiting Clean Energy
|
Index
|
Page
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in millions, except per share amounts)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating Revenues
|
|
|
|
|
|
|
|||||||||
Customer revenues
|
$
|
855.8
|
|
|
$
|
883.4
|
|
|
$
|
3,555.1
|
|
|
$
|
3,386.0
|
|
Other revenues
|
39.2
|
|
|
33.6
|
|
|
97.7
|
|
|
120.3
|
|
||||
Total Operating Revenues
|
895.0
|
|
|
917.0
|
|
|
3,652.8
|
|
|
3,506.3
|
|
||||
Operating Expenses
|
|
|
|
|
|
|
|
||||||||
Cost of sales (excluding depreciation and amortization)
|
222.0
|
|
|
233.6
|
|
|
1,259.7
|
|
|
1,062.7
|
|
||||
Operation and maintenance
|
780.8
|
|
|
371.7
|
|
|
1,548.5
|
|
|
1,174.9
|
|
||||
Depreciation and amortization
|
148.5
|
|
|
143.0
|
|
|
437.8
|
|
|
428.5
|
|
||||
Loss (Gain) on sale of assets and impairments, net
|
0.7
|
|
|
—
|
|
|
0.4
|
|
|
(0.1
|
)
|
||||
Other taxes
|
58.9
|
|
|
57.5
|
|
|
203.3
|
|
|
189.7
|
|
||||
Total Operating Expenses
|
1,210.9
|
|
|
805.8
|
|
|
3,449.7
|
|
|
2,855.7
|
|
||||
Operating Income (Loss)
|
(315.9
|
)
|
|
111.2
|
|
|
203.1
|
|
|
650.6
|
|
||||
Other Income (Deductions)
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(83.4
|
)
|
|
(87.9
|
)
|
|
(265.2
|
)
|
|
(260.8
|
)
|
||||
Other, net
|
(1.7
|
)
|
|
(6.8
|
)
|
|
42.4
|
|
|
(0.3
|
)
|
||||
Loss on early extinguishment of long-term debt
|
(33.0
|
)
|
|
—
|
|
|
(45.5
|
)
|
|
(111.5
|
)
|
||||
Total Other Deductions, Net
|
(118.1
|
)
|
|
(94.7
|
)
|
|
(268.3
|
)
|
|
(372.6
|
)
|
||||
Income (Loss) before Income Taxes
|
(434.0
|
)
|
|
16.5
|
|
|
(65.2
|
)
|
|
278.0
|
|
||||
Income Taxes
|
(94.5
|
)
|
|
2.5
|
|
|
(26.3
|
)
|
|
97.1
|
|
||||
Net Income (Loss)
|
(339.5
|
)
|
|
14.0
|
|
|
(38.9
|
)
|
|
180.9
|
|
||||
Preferred dividends
|
(5.6
|
)
|
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
||||
Net Income (Loss) Available to Common Shareholders
|
(345.1
|
)
|
|
14.0
|
|
|
(45.8
|
)
|
|
180.9
|
|
||||
Earnings (Loss) Per Share
|
|
|
|
|
|
|
|
||||||||
Basic Earnings (Loss) Per Share
|
$
|
(0.95
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.13
|
)
|
|
$
|
0.55
|
|
Diluted Earnings (Loss) Per Share
|
$
|
(0.95
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.13
|
)
|
|
$
|
0.55
|
|
Dividends Declared Per Common Share
|
$
|
0.195
|
|
|
$
|
0.175
|
|
|
$
|
0.780
|
|
|
$
|
0.700
|
|
Basic Average Common Shares Outstanding
|
363.9
|
|
|
331.1
|
|
|
352.1
|
|
|
326.7
|
|
||||
Diluted Average Common Shares
|
363.9
|
|
|
332.4
|
|
|
352.1
|
|
|
328.0
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in millions, net of taxes)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net Income (Loss)
|
$
|
(339.5
|
)
|
|
$
|
14.0
|
|
|
$
|
(38.9
|
)
|
|
$
|
180.9
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net unrealized gain (loss) on available-for-sale securities
(1)
|
0.1
|
|
|
0.1
|
|
|
(2.3
|
)
|
|
1.1
|
|
||||
Net unrealized gain (loss) on cash flow hedges
(2)
|
22.5
|
|
|
(9.3
|
)
|
|
56.5
|
|
|
(21.2
|
)
|
||||
Unrecognized pension and OPEB benefit
(3)
|
0.8
|
|
|
1.1
|
|
|
1.2
|
|
|
1.5
|
|
||||
Total other comprehensive income (loss)
|
23.4
|
|
|
(8.1
|
)
|
|
55.4
|
|
|
(18.6
|
)
|
||||
Comprehensive Income (Loss)
|
$
|
(316.1
|
)
|
|
$
|
5.9
|
|
|
$
|
16.5
|
|
|
$
|
162.3
|
|
NiSource Inc.
Condensed Consolidated Balance Sheets (unaudited)
|
|||||||
(in millions)
|
September 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Property, Plant and Equipment
|
|
|
|
||||
Utility plant
|
$
|
22,328.2
|
|
|
$
|
21,026.6
|
|
Accumulated depreciation and amortization
|
(7,171.0
|
)
|
|
(6,953.6
|
)
|
||
Net utility plant
|
15,157.2
|
|
|
14,073.0
|
|
||
Other property, at cost, less accumulated depreciation
|
17.2
|
|
|
286.5
|
|
||
Net Property, Plant and Equipment
|
15,174.4
|
|
|
14,359.5
|
|
||
Investments and Other Assets
|
|
|
|
||||
Unconsolidated affiliates
|
2.6
|
|
|
5.5
|
|
||
Other investments
|
214.5
|
|
|
204.1
|
|
||
Total Investments and Other Assets
|
217.1
|
|
|
209.6
|
|
||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
41.8
|
|
|
29.0
|
|
||
Restricted cash
|
12.0
|
|
|
9.4
|
|
||
Accounts receivable (less reserve of $13.0 and $18.3, respectively)
|
500.4
|
|
|
898.9
|
|
||
Gas inventory
|
320.2
|
|
|
285.1
|
|
||
Materials and supplies, at average cost
|
97.7
|
|
|
105.9
|
|
||
Electric production fuel, at average cost
|
49.0
|
|
|
80.1
|
|
||
Exchange gas receivable
|
37.3
|
|
|
45.8
|
|
||
Regulatory assets
|
221.0
|
|
|
176.3
|
|
||
Prepayments and other
|
89.7
|
|
|
132.8
|
|
||
Total Current Assets
|
1,369.1
|
|
|
1,763.3
|
|
||
Other Assets
|
|
|
|
||||
Regulatory assets
|
1,907.4
|
|
|
1,624.9
|
|
||
Goodwill
|
1,690.7
|
|
|
1,690.7
|
|
||
Intangible assets, net
|
223.5
|
|
|
231.7
|
|
||
Deferred charges and other
|
117.2
|
|
|
82.0
|
|
||
Total Other Assets
|
3,938.8
|
|
|
3,629.3
|
|
||
Total Assets
|
$
|
20,699.4
|
|
|
$
|
19,961.7
|
|
NiSource Inc.
Condensed Consolidated Balance Sheets (unaudited) (continued)
|
|||||||
(in millions, except share amounts)
|
September 30,
2018 |
|
December 31,
2017 |
||||
CAPITALIZATION AND LIABILITIES
|
|
|
|
||||
Capitalization
|
|
|
|
||||
Stockholders’ Equity
|
|
|
|
||||
Common stock - $0.01 par value, 400,000,000 shares authorized; 363,167,067 and 337,015,806 shares outstanding, respectively
|
$
|
3.7
|
|
|
$
|
3.4
|
|
Preferred stock - $1,000 par value, 20,000,000 shares authorized; 400,000 shares outstanding
|
393.9
|
|
|
—
|
|
||
Treasury stock
|
(99.9
|
)
|
|
(95.9
|
)
|
||
Additional paid-in capital
|
6,161.0
|
|
|
5,529.1
|
|
||
Retained deficit
|
(1,387.5
|
)
|
|
(1,073.1
|
)
|
||
Accumulated other comprehensive income (loss)
|
2.5
|
|
|
(43.4
|
)
|
||
Total Stockholders’ Equity
|
5,073.7
|
|
|
4,320.1
|
|
||
Long-term debt, excluding amounts due within one year
|
7,094.5
|
|
|
7,512.2
|
|
||
Total Capitalization
|
12,168.2
|
|
|
11,832.3
|
|
||
Current Liabilities
|
|
|
|
||||
Current portion of long-term debt
|
48.6
|
|
|
284.3
|
|
||
Short-term borrowings
|
1,611.0
|
|
|
1,205.7
|
|
||
Accounts payable
|
433.7
|
|
|
625.6
|
|
||
Dividends payable - common stock
|
70.8
|
|
|
—
|
|
||
Dividends payable - preferred stock
|
11.6
|
|
|
—
|
|
||
Customer deposits and credits
|
238.4
|
|
|
262.6
|
|
||
Taxes accrued
|
150.0
|
|
|
208.1
|
|
||
Interest accrued
|
108.0
|
|
|
112.3
|
|
||
Risk management liabilities
|
4.8
|
|
|
43.2
|
|
||
Exchange gas payable
|
58.2
|
|
|
59.6
|
|
||
Regulatory liabilities
|
81.9
|
|
|
58.7
|
|
||
Legal and environmental
|
20.4
|
|
|
32.1
|
|
||
Accrued compensation and employee benefits
|
153.4
|
|
|
195.4
|
|
||
Claims accrued
|
365.9
|
|
|
12.5
|
|
||
Other accruals
|
54.5
|
|
|
78.3
|
|
||
Total Current Liabilities
|
3,411.2
|
|
|
3,178.4
|
|
||
Other Liabilities
|
|
|
|
||||
Risk management liabilities
|
45.2
|
|
|
28.5
|
|
||
Deferred income taxes
|
1,291.7
|
|
|
1,292.9
|
|
||
Deferred investment tax credits
|
11.7
|
|
|
12.4
|
|
||
Accrued insurance liabilities
|
81.8
|
|
|
80.1
|
|
||
Accrued liability for postretirement and postemployment benefits
|
300.9
|
|
|
337.1
|
|
||
Regulatory liabilities
|
2,826.8
|
|
|
2,736.9
|
|
||
Asset retirement obligations
|
346.9
|
|
|
268.7
|
|
||
Other noncurrent liabilities
|
215.0
|
|
|
194.4
|
|
||
Total Other Liabilities
|
5,120.0
|
|
|
4,951.0
|
|
||
Commitments and Contingencies (Refer to Note 16, "Other Commitments and Contingencies")
|
—
|
|
|
—
|
|
||
Total Capitalization and Liabilities
|
$
|
20,699.4
|
|
|
$
|
19,961.7
|
|
NiSource Inc.
Condensed Statements of Consolidated Cash Flows (unaudited)
|
|||||||
Nine Months Ended September 30,
(in millions)
|
2018
|
|
2017
|
||||
Operating Activities
|
|
|
|
||||
Net Income (Loss)
|
$
|
(38.9
|
)
|
|
$
|
180.9
|
|
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
|
|
|
|
||||
Loss on early extinguishment of debt
|
45.5
|
|
|
111.5
|
|
||
Depreciation and amortization
|
437.8
|
|
|
428.5
|
|
||
Deferred income taxes and investment tax credits
|
(26.4
|
)
|
|
96.3
|
|
||
Other adjustments
|
15.6
|
|
|
28.5
|
|
||
Changes in Assets and Liabilities:
|
|
|
|
||||
Components of working capital
|
442.9
|
|
|
32.6
|
|
||
Regulatory assets/liabilities
|
61.3
|
|
|
(12.9
|
)
|
||
Postretirement and postemployment benefits
|
(41.4
|
)
|
|
(314.5
|
)
|
||
Deferred charges and other noncurrent assets
|
0.8
|
|
|
(3.7
|
)
|
||
Other noncurrent liabilities
|
30.0
|
|
|
(17.6
|
)
|
||
Net Cash Flows from Operating Activities
|
927.2
|
|
|
529.6
|
|
||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(1,296.6
|
)
|
|
(1,216.4
|
)
|
||
Cost of removal
|
(72.6
|
)
|
|
(78.9
|
)
|
||
Purchases of available-for-sale securities
|
(71.4
|
)
|
|
(139.4
|
)
|
||
Sales of available-for-sale securities
|
58.5
|
|
|
129.4
|
|
||
Other investing activities
|
5.6
|
|
|
(1.4
|
)
|
||
Net Cash Flows used for Investing Activities
|
(1,376.5
|
)
|
|
(1,306.7
|
)
|
||
Financing Activities
|
|
|
|
||||
Issuance of long-term debt
|
350.0
|
|
|
2,750.0
|
|
||
Repayments of long-term debt and capital lease obligations
|
(1,044.0
|
)
|
|
(1,352.4
|
)
|
||
Premiums and other debt related costs
|
(46.1
|
)
|
|
(139.8
|
)
|
||
Issuance of short-term debt (maturity > 90 days)
|
600.0
|
|
|
—
|
|
||
Change in short-term borrowings, net (maturity ≤ 90 days)
|
(194.6
|
)
|
|
(644.9
|
)
|
||
Issuance of common stock
|
611.6
|
|
|
332.6
|
|
||
Issuance of preferred stock
|
394.3
|
|
|
—
|
|
||
Acquisition of treasury stock
|
(4.0
|
)
|
|
(5.9
|
)
|
||
Dividends paid - common stock
|
(202.5
|
)
|
|
(170.2
|
)
|
||
Net Cash Flows from Financing Activities
|
464.7
|
|
|
769.4
|
|
||
Change in cash, cash equivalents and restricted cash
|
15.4
|
|
|
(7.7
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
38.4
|
|
|
36.0
|
|
||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
$
|
53.8
|
|
|
$
|
28.3
|
|
Nine Months Ended September 30,
(in millions)
|
2018
|
|
2017
|
||||
Non-cash transactions:
|
|
|
|
||||
Capital expenditures included in current liabilities
|
$
|
167.5
|
|
|
$
|
219.1
|
|
Dividends declared but not paid
|
82.4
|
|
|
58.9
|
|
||
Reclassification of other property to regulatory assets
(1)
|
245.3
|
|
|
—
|
|
||
Change in estimated costs of asset retirement obligations
(2)
|
$
|
70.7
|
|
|
$
|
—
|
|
(in millions)
|
Common
Stock
|
|
Preferred Stock
|
|
Treasury
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Deficit
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
||||||||||||||
Balance as of January 1, 2018
|
$
|
3.4
|
|
|
$
|
—
|
|
|
$
|
(95.9
|
)
|
|
$
|
5,529.1
|
|
|
$
|
(1,073.1
|
)
|
|
$
|
(43.4
|
)
|
|
$
|
4,320.1
|
|
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38.9
|
)
|
|
—
|
|
|
(38.9
|
)
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.4
|
|
|
55.4
|
|
|||||||
Common stock dividends ($0.78 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(273.4
|
)
|
|
—
|
|
|
(273.4
|
)
|
|||||||
Preferred stock dividends ($28.88 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.6
|
)
|
|
—
|
|
|
(11.6
|
)
|
|||||||
Treasury stock acquired
|
—
|
|
|
—
|
|
|
(4.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.0
|
)
|
|||||||
Cumulative effect of change in accounting principle
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.5
|
|
|
(9.5
|
)
|
|
—
|
|
|||||||
Stock issuances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Common stock - private placement
(2)
|
0.3
|
|
|
—
|
|
|
—
|
|
|
599.3
|
|
|
—
|
|
|
—
|
|
|
599.6
|
|
|||||||
Preferred stock
(2)
|
—
|
|
|
393.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
393.9
|
|
|||||||
Employee stock purchase plan
|
—
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|||||||
Long-term incentive plan
|
—
|
|
|
—
|
|
|
—
|
|
|
11.5
|
|
|
—
|
|
|
—
|
|
|
11.5
|
|
|||||||
401(k) and profit sharing
|
—
|
|
|
—
|
|
|
—
|
|
|
16.9
|
|
|
—
|
|
|
—
|
|
|
16.9
|
|
|||||||
Balance as of September 30, 2018
|
$
|
3.7
|
|
|
$
|
393.9
|
|
|
$
|
(99.9
|
)
|
|
$
|
6,161.0
|
|
|
$
|
(1,387.5
|
)
|
|
$
|
2.5
|
|
|
$
|
5,073.7
|
|
|
Preferred
|
|
Common
|
||||||||
(in thousands)
|
Shares
|
|
Shares
|
|
Treasury
|
|
Outstanding
|
||||
Balance as of January 1, 2018
|
—
|
|
|
340,813
|
|
|
(3,797
|
)
|
|
337,016
|
|
Treasury Stock acquired
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
(166
|
)
|
Issued:
|
|
|
|
|
|
|
|
||||
Common stock - private placement
(1)
|
—
|
|
|
24,964
|
|
|
—
|
|
|
24,964
|
|
Preferred stock
(1)
|
400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Employee stock purchase plan
|
—
|
|
|
166
|
|
|
—
|
|
|
166
|
|
Long-term incentive plan
|
—
|
|
|
499
|
|
|
—
|
|
|
499
|
|
401(k) and profit sharing
|
—
|
|
|
688
|
|
|
—
|
|
|
688
|
|
Balance as of September 30, 2018
|
400
|
|
|
367,130
|
|
|
(3,963
|
)
|
|
363,167
|
|
Standard
|
Description
|
Effective Date
|
Effect on the financial statements or other significant matters
|
ASU 2018-14,
Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans
|
The pronouncement modifies the disclosure requirements for defined benefit pension or other postretirement benefit plans. The guidance removes disclosures that are no longer considered cost beneficial, clarifies the specific requirements of disclosures and adds disclosure requirements identified as relevant. The modifications affect annual period disclosures and must be applied on a retrospective basis to all periods presented.
|
Annual periods ending after December 15, 2020. Early adoption is permitted.
|
We are currently evaluating the effects of this pronouncement on our Notes to Condensed Consolidated Financial Statements (unaudited), including potential early adoption in the fourth quarter of 2018.
|
ASU 2016-13,
Financial Instruments-Credit Losses (Topic 326)
|
The pronouncement changes the impairment model for most financial assets, replacing the current "incurred loss" model. ASU 2016-13 will require the use of an "expected loss" model for instruments measured at amortized cost. It will also require entities to record allowances for available-for-sale debt securities rather than impair the carrying amount of the securities. Subsequent improvements to the estimated credit losses of available-for-sale securities will be recognized immediately in earnings instead of over time as they are under historic guidance.
|
Annual periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for annual or interim periods beginning after December 15, 2018.
|
We maintain investments in U.S. Treasury, corporate and mortgage-backed debt securities, which are pledged as collateral for trust accounts related to our wholly-owned insurance company. These debt securities are classified as available for sale. We are currently evaluating the impact of adoption, if any, on our 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 2018-11,
Leases (Topic 842): Targeted Improvements
|
The pronouncement allows entities the option to initially apply ASC 842 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.
|
Annual periods beginning after December 15, 2018, including interim periods therein. Early adoption is permitted.
|
We are the lessee for substantially all of our current leasing activity. Upon adopting ASC 842 we will begin recognizing right-of-use assets and liabilities associated with operating leases (other than short term operating leases) on our Condensed Consolidated Balance Sheets (unaudited). The impact of this change on the balance sheet is not reasonably estimable at this time. We do not anticipate the adoption of ASC 842 will have a material impact to our results of operations or cash flows. We have undertaken efforts to outline mock footnote disclosures intended to satisfy ASC 842’s disclosure requirements, which will enhance our disclosures on lease accounting policies and elections. We are implementing a new lease accounting system, which we will utilize to capture, track, and account for lease data. The new system will also aid in automating the compilation of disclosure information. We expect to conclude final system tests in the fourth quarter of 2018, with full system implementation prior to the effective date of these standards. ASC 842 provides lessees the option of electing an accounting policy, by class of underlying asset, in which the lessee may choose not to separate nonlease components from lease components. We currently anticipate adopting this practical expedient for certain classes of leases. Further, we will elect the "practical expedient package" described in ASC 842-10-65-1. We maintain a substantial number of easements and will also elect the provisions of ASU 2018-01 to ease the process of implementing ASC 842. Lastly, we anticipate electing the transition method provided in ASU 2018-11 when we adopt these standards effective January 1, 2019.
|
ASU 2018-01,
Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842
|
The pronouncement offers a practical expedient for accounting for land easements under ASU 2016-02. This practical expedient allows an entity the option of not evaluating existing land easements under ASC 842. New or modified land easements will still require evaluation under ASC 842 on a prospective basis beginning on the date of adoption.
|
||
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.
|
Standard
|
Adoption
|
ASU 2018-15,
Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
|
In August 2018, the FASB issued this ASU, which amends current guidance to align the accounting for costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs associated with developing or obtaining internal-use software.
We elected to early adopt the ASU on a prospective basis, effective October 1, 2018. As a result of adopting this ASU, we will defer onto the balance sheet those up-front implementation costs of cloud computing arrangements if they would have been capitalized in a similar on-premise software solution.
|
ASU 2018-02,
Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
We adopted this ASU effective March 31, 2018. Upon adoption, $9.5 million of tax effects that were stranded in accumulated other comprehensive income (loss) as a result of the implementation of the TCJA were reclassified to retained deficit. This change is reflected on our Condensed Statements of Consolidated Equity (unaudited).
|
ASU 2016-15,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)
|
We adopted this ASU effective January 1, 2018. The adoption of this standard did not have a material impact on our Condensed Consolidated Financial Statements (unaudited) or Notes to Condensed Consolidated Financial Statements (unaudited).
|
ASU 2016-12,
Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients
|
See Note 3, "Revenue Recognition," for our discussion of the effects of implementing these standards.
|
ASU 2016-08,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations
|
|
ASU 2014-09,
Revenue from Contracts with Customers (Topic 606)
|
Year Ended December 31, 2016
(in millions)
|
|
As Previously Reported
|
|
Effect of Change
(1)
|
|
As Adjusted
|
||||||
Operation and maintenance
|
|
$
|
1,453.7
|
|
|
$
|
(7.9
|
)
|
|
$
|
1,445.8
|
|
Total Operating Expenses
|
|
3,634.3
|
|
|
(7.9
|
)
|
|
3,626.4
|
|
|||
Operating Income
|
|
858.2
|
|
|
7.9
|
|
|
866.1
|
|
|||
Other Income (Deductions)
|
|
|
|
|
|
|
||||||
Other, net
|
|
1.5
|
|
|
(7.9
|
)
|
|
(6.4
|
)
|
|||
Total Other Deductions
|
|
(348.0
|
)
|
|
(7.9
|
)
|
|
(355.9
|
)
|
|||
Income before Income Taxes
|
|
$
|
510.2
|
|
|
$
|
—
|
|
|
$
|
510.2
|
|
Year Ended December 31, 2017
(in millions)
|
|
As Previously Reported
|
|
Effect of Change
(1)
|
|
As Adjusted
|
||||||
Operation and maintenance
|
|
$
|
1,612.3
|
|
|
$
|
(10.6
|
)
|
|
$
|
1,601.7
|
|
Total Operating Expenses
|
|
3,964.0
|
|
|
(10.6
|
)
|
|
3,953.4
|
|
|||
Operating Income
|
|
910.6
|
|
|
10.6
|
|
|
921.2
|
|
|||
Other Income (Deductions)
|
|
|
|
|
|
|
||||||
Other, net
|
|
(2.8
|
)
|
|
(10.6
|
)
|
|
(13.4
|
)
|
|||
Total Other Deductions
|
|
(467.5
|
)
|
|
(10.6
|
)
|
|
(478.1
|
)
|
|||
Income before Income Taxes
|
|
$
|
443.1
|
|
|
$
|
—
|
|
|
$
|
443.1
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating Revenues
|
|
|
|
|
|
|
|
||||||||
Gas Distribution
|
$
|
232.3
|
|
|
$
|
239.4
|
|
|
$
|
1,600.3
|
|
|
$
|
1,403.0
|
|
Gas Transportation
|
186.0
|
|
|
191.6
|
|
|
745.2
|
|
|
735.1
|
|
||||
Electric
|
476.2
|
|
|
485.8
|
|
|
1,304.4
|
|
|
1,365.5
|
|
||||
Other
|
0.5
|
|
|
0.2
|
|
|
2.9
|
|
|
2.7
|
|
||||
Total Operating Revenues
|
$
|
895.0
|
|
|
$
|
917.0
|
|
|
$
|
3,652.8
|
|
|
$
|
3,506.3
|
|
Three Months Ended September 30, 2018
(in millions)
|
Gas Distribution Operations
|
|
Electric Operations
|
|
Corporate and Other
|
|
Total
|
||||||||
Customer Revenues
(1)
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
257.0
|
|
|
$
|
154.7
|
|
|
$
|
—
|
|
|
$
|
411.7
|
|
Commercial
|
80.9
|
|
|
140.7
|
|
|
—
|
|
|
221.6
|
|
||||
Industrial
|
39.0
|
|
|
153.6
|
|
|
—
|
|
|
192.6
|
|
||||
Off-system
|
20.4
|
|
|
—
|
|
|
—
|
|
|
20.4
|
|
||||
Miscellaneous
|
9.2
|
|
|
0.1
|
|
|
0.2
|
|
|
9.5
|
|
||||
Total Customer Revenues
|
$
|
406.5
|
|
|
$
|
449.1
|
|
|
$
|
0.2
|
|
|
$
|
855.8
|
|
Other Revenues
|
12.1
|
|
|
27.1
|
|
|
—
|
|
|
39.2
|
|
||||
Total Operating Revenues
|
$
|
418.6
|
|
|
$
|
476.2
|
|
|
$
|
0.2
|
|
|
$
|
895.0
|
|
Nine Months Ended September 30, 2018
(in millions)
|
Gas Distribution Operations
|
|
Electric Operations
|
|
Corporate and Other
|
|
Total
|
||||||||
Customer Revenues
(1)
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
1,540.3
|
|
|
$
|
382.3
|
|
|
$
|
—
|
|
|
$
|
1,922.6
|
|
Commercial
|
516.2
|
|
|
374.2
|
|
|
—
|
|
|
890.4
|
|
||||
Industrial
|
161.3
|
|
|
468.1
|
|
|
—
|
|
|
629.4
|
|
||||
Off-system
|
63.6
|
|
|
—
|
|
|
—
|
|
|
63.6
|
|
||||
Miscellaneous
|
36.2
|
|
|
12.3
|
|
|
0.6
|
|
|
49.1
|
|
||||
Total Customer Revenues
|
$
|
2,317.6
|
|
|
$
|
1,236.9
|
|
|
$
|
0.6
|
|
|
$
|
3,555.1
|
|
Other Revenues
|
30.2
|
|
|
67.5
|
|
|
—
|
|
|
97.7
|
|
||||
Total Operating Revenues
|
$
|
2,347.8
|
|
|
$
|
1,304.4
|
|
|
$
|
0.6
|
|
|
$
|
3,652.8
|
|
(in millions)
|
Customer Accounts Receivable, Billed (less reserve)
(1)
|
|
Customer Accounts Receivable, Unbilled (less reserve)
(2)
|
||||
Balance as of December 31, 2017
|
$
|
477.0
|
|
|
$
|
356.0
|
|
Balance as of September 30, 2018
|
297.2
|
|
|
154.8
|
|
||
Increase (Decrease)
|
$
|
(179.8
|
)
|
|
$
|
(201.2
|
)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||
|
|
September 30,
|
|
September 30,
|
||
(in thousands)
|
|
2017
|
|
2017
|
||
Denominator
|
|
|
|
|
||
Basic average common shares outstanding
|
|
331,139
|
|
|
326,662
|
|
Dilutive potential common shares:
|
|
|
|
|
||
Shares contingently issuable under employee stock plans
|
|
604
|
|
|
503
|
|
Shares restricted under employee stock plans
|
|
653
|
|
|
866
|
|
Diluted Average Common Shares
|
|
332,396
|
|
|
328,031
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Number of shares issued
|
—
|
|
|
10,612,915
|
|
|
—
|
|
|
11,931,376
|
|
||||
Average price per share
|
$
|
—
|
|
|
$
|
26.67
|
|
|
$
|
—
|
|
|
$
|
26.58
|
|
Proceeds, net of fees
(in millions)
|
$
|
—
|
|
|
$
|
281.0
|
|
|
$
|
—
|
|
|
$
|
314.7
|
|
|
|
|
|
|
(in millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Risk Management Assets - Current
(1)
|
|
|
|
||||
Interest rate risk programs
|
$
|
21.4
|
|
|
$
|
14.0
|
|
Commodity price risk programs
|
1.0
|
|
|
0.5
|
|
||
Total
|
$
|
22.4
|
|
|
$
|
14.5
|
|
Risk Management Assets - Noncurrent
(2)
|
|
|
|
||||
Interest rate risk programs
|
$
|
32.6
|
|
|
$
|
5.6
|
|
Commodity price risk programs
|
2.6
|
|
|
1.0
|
|
||
Total
|
$
|
35.2
|
|
|
$
|
6.6
|
|
Risk Management Liabilities - Current
|
|
|
|
||||
Interest rate risk programs
|
$
|
—
|
|
|
$
|
38.6
|
|
Commodity price risk programs
|
4.8
|
|
|
4.6
|
|
||
Total
|
$
|
4.8
|
|
|
$
|
43.2
|
|
Risk Management Liabilities - Noncurrent
|
|
|
|
||||
Interest rate risk programs
|
$
|
—
|
|
|
$
|
—
|
|
Commodity price risk programs
|
45.2
|
|
|
28.5
|
|
||
Total
|
$
|
45.2
|
|
|
$
|
28.5
|
|
Recurring Fair Value Measurements
September 30, 2018 (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 September 30, 2018
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Risk management assets
|
$
|
—
|
|
|
$
|
57.6
|
|
|
$
|
—
|
|
|
$
|
57.6
|
|
Available-for-sale securities
|
—
|
|
|
143.8
|
|
|
—
|
|
|
143.8
|
|
||||
Total
|
$
|
—
|
|
|
$
|
201.4
|
|
|
$
|
—
|
|
|
$
|
201.4
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Risk management liabilities
|
$
|
—
|
|
|
$
|
50.0
|
|
|
$
|
—
|
|
|
$
|
50.0
|
|
Total
|
$
|
—
|
|
|
$
|
50.0
|
|
|
$
|
—
|
|
|
$
|
50.0
|
|
Recurring Fair Value Measurements
December 31, 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
December 31, 2017
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Risk management assets
|
$
|
—
|
|
|
$
|
21.1
|
|
|
$
|
—
|
|
|
$
|
21.1
|
|
Available-for-sale securities
|
—
|
|
|
133.9
|
|
|
—
|
|
|
133.9
|
|
||||
Total
|
$
|
—
|
|
|
$
|
155.0
|
|
|
$
|
—
|
|
|
$
|
155.0
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Risk management liabilities
|
$
|
—
|
|
|
$
|
71.4
|
|
|
$
|
0.3
|
|
|
$
|
71.7
|
|
Total
|
$
|
—
|
|
|
$
|
71.4
|
|
|
$
|
0.3
|
|
|
$
|
71.7
|
|
September 30, 2018
(in millions)
|
Amortized
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair
Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury debt securities
|
$
|
29.7
|
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
29.5
|
|
Corporate/Other debt securities
|
116.8
|
|
|
0.4
|
|
|
(2.9
|
)
|
|
114.3
|
|
||||
Total
|
$
|
146.5
|
|
|
$
|
0.4
|
|
|
$
|
(3.1
|
)
|
|
$
|
143.8
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
(in millions)
|
Amortized
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair
Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury debt securities
|
$
|
26.9
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
26.8
|
|
Corporate/Other debt securities
|
106.8
|
|
|
0.9
|
|
|
(0.6
|
)
|
|
107.1
|
|
||||
Total
|
$
|
133.7
|
|
|
$
|
0.9
|
|
|
$
|
(0.7
|
)
|
|
$
|
133.9
|
|
(in millions)
|
Carrying
Amount as of September 30, 2018 |
|
Estimated Fair
Value as of September 30, 2018 |
|
Carrying
Amount as of
Dec. 31, 2017
|
|
Estimated Fair
Value as of
Dec. 31, 2017
|
||||||||
Long-term debt (including current portion)
|
$
|
7,143.1
|
|
|
$
|
7,280.1
|
|
|
$
|
7,796.5
|
|
|
$
|
8,603.4
|
|
(in millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Gross Receivables
|
$
|
410.9
|
|
|
$
|
635.3
|
|
Less: Receivables not transferred
|
145.9
|
|
|
298.6
|
|
||
Net receivables transferred
|
$
|
265.0
|
|
|
$
|
336.7
|
|
Short-term debt due to asset securitization
|
$
|
265.0
|
|
|
$
|
336.7
|
|
(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 September 30,
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Components of Net Periodic Benefit Cost
(1)
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
7.8
|
|
|
$
|
7.4
|
|
|
$
|
1.3
|
|
|
$
|
1.2
|
|
Interest cost
|
16.8
|
|
|
17.1
|
|
|
4.4
|
|
|
4.4
|
|
||||
Expected return on assets
|
(35.4
|
)
|
|
(30.8
|
)
|
|
(3.7
|
)
|
|
(3.9
|
)
|
||||
Amortization of prior service credit
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(1.0
|
)
|
|
(1.1
|
)
|
||||
Recognized actuarial loss
|
10.2
|
|
|
13.2
|
|
|
0.9
|
|
|
0.7
|
|
||||
Settlement loss
|
8.3
|
|
|
10.6
|
|
|
—
|
|
|
—
|
|
||||
Total Net Periodic Benefit Cost
|
$
|
7.6
|
|
|
$
|
17.4
|
|
|
$
|
1.9
|
|
|
$
|
1.3
|
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||||||||||
Nine Months Ended September 30,
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Components of Net Periodic Benefit Cost
(1)
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
23.6
|
|
|
$
|
22.4
|
|
|
$
|
3.9
|
|
|
$
|
3.6
|
|
Interest cost
|
50.0
|
|
|
51.5
|
|
|
13.2
|
|
|
13.4
|
|
||||
Expected return on assets
|
(107.9
|
)
|
|
(91.3
|
)
|
|
(11.1
|
)
|
|
(11.9
|
)
|
||||
Amortization of prior service credit
|
(0.3
|
)
|
|
(0.5
|
)
|
|
(3.0
|
)
|
|
(3.3
|
)
|
||||
Recognized actuarial loss
|
30.6
|
|
|
40.0
|
|
|
2.7
|
|
|
2.2
|
|
||||
Settlement loss
|
11.8
|
|
|
10.6
|
|
|
—
|
|
|
—
|
|
||||
Total Net Periodic Benefit Cost
|
$
|
7.8
|
|
|
$
|
32.7
|
|
|
$
|
5.7
|
|
|
$
|
4.0
|
|
|
August 31,
2018
|
|
May 31,
2018
|
|
December 31, 2017
|
|||
Weighted-average Assumption to Determine Benefit Obligation:
|
|
|
|
|
|
|||
Discount rate
|
4.08
|
%
|
|
4.03
|
%
|
|
3.58
|
%
|
Weighted-average Assumptions to Determine Net Periodic Benefit Costs for the period ended:
|
|
|
|
|
|
|||
Discount rate - service cost
|
3.79
|
%
|
|
3.79
|
%
|
|
4.40
|
%
|
Discount rate - interest cost
|
3.15
|
%
|
|
3.15
|
%
|
|
3.31
|
%
|
Expected return on assets
|
6.30
|
%
|
|
6.30
|
%
|
|
7.25
|
%
|
(in millions)
|
September 30,
2018 |
|
December 31,
2017 |
||||
Commercial paper weighted-average interest rate of 2.57% and 1.97% at September 30, 2018 and December 31, 2017, respectively
|
$
|
746.0
|
|
|
$
|
869.0
|
|
Accounts receivable securitization facility borrowings
|
265.0
|
|
|
336.7
|
|
||
Term loan weighted-average interest rate of 2.79% at September 30, 2018
|
600.0
|
|
|
—
|
|
||
Total Short-Term Borrowings
|
$
|
1,611.0
|
|
|
$
|
1,205.7
|
|
Three Months Ended September 30, 2018
(in millions)
|
Gains and Losses on Securities
(1)
|
|
Gains and Losses on Cash Flow Hedges
(1)
|
|
Pension and OPEB Items
(1)
|
|
Accumulated
Other Comprehensive Income (Loss) (1) |
||||||||
Balance as of July 1, 2018
|
$
|
(2.2
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(17.0
|
)
|
|
$
|
(20.9
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
21.6
|
|
|
1.0
|
|
|
22.6
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
0.1
|
|
|
0.9
|
|
|
(0.2
|
)
|
|
0.8
|
|
||||
Net current-period other comprehensive income
|
0.1
|
|
|
22.5
|
|
|
0.8
|
|
|
23.4
|
|
||||
Balance as of September 30, 2018
|
$
|
(2.1
|
)
|
|
$
|
20.8
|
|
|
$
|
(16.2
|
)
|
|
$
|
2.5
|
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2018
(in millions)
|
Gains and Losses on Securities
(1)
|
|
Gains and Losses on Cash Flow Hedges
(1)
|
|
Pension and OPEB Items
(1)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
(1)
|
||||||||
Balance as of January 1, 2018
|
$
|
0.2
|
|
|
$
|
(29.4
|
)
|
|
$
|
(14.2
|
)
|
|
$
|
(43.4
|
)
|
Other comprehensive income (loss) before reclassifications
|
(2.5
|
)
|
|
70.8
|
|
|
1.0
|
|
|
69.3
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
(2)
|
0.2
|
|
|
(14.3
|
)
|
|
0.2
|
|
|
(13.9
|
)
|
||||
Net current-period other comprehensive income (loss)
|
(2.3
|
)
|
|
56.5
|
|
|
1.2
|
|
|
55.4
|
|
||||
Reclassification due to adoption of ASU 2018-02 (Refer to Note 2)
|
—
|
|
|
(6.3
|
)
|
|
(3.2
|
)
|
|
(9.5
|
)
|
||||
Balance as of September 30, 2018
|
$
|
(2.1
|
)
|
|
$
|
20.8
|
|
|
$
|
(16.2
|
)
|
|
$
|
2.5
|
|
Three Months Ended September 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 July 1, 2017
|
$
|
0.4
|
|
|
$
|
(18.8
|
)
|
|
$
|
(17.2
|
)
|
|
$
|
(35.6
|
)
|
Other comprehensive income (loss) before reclassifications
|
0.1
|
|
|
(9.7
|
)
|
|
—
|
|
|
(9.6
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
0.4
|
|
|
1.1
|
|
|
1.5
|
|
||||
Net current-period other comprehensive income (loss)
|
0.1
|
|
|
(9.3
|
)
|
|
1.1
|
|
|
(8.1
|
)
|
||||
Balance as of September 30, 2017
|
$
|
0.5
|
|
|
$
|
(28.1
|
)
|
|
$
|
(16.1
|
)
|
|
$
|
(43.7
|
)
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 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
|
1.1
|
|
|
(23.3
|
)
|
|
0.2
|
|
|
(22.0
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
2.1
|
|
|
1.3
|
|
|
3.4
|
|
||||
Net current-period other comprehensive income (loss)
|
1.1
|
|
|
(21.2
|
)
|
|
1.5
|
|
|
(18.6
|
)
|
||||
Balance as of September 30, 2017
|
$
|
0.5
|
|
|
$
|
(28.1
|
)
|
|
$
|
(16.1
|
)
|
|
$
|
(43.7
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interest Income
|
$
|
1.4
|
|
|
$
|
1.4
|
|
|
$
|
4.2
|
|
|
$
|
3.2
|
|
AFUDC Equity
|
5.0
|
|
|
4.3
|
|
|
12.6
|
|
|
10.5
|
|
||||
Charitable Contributions
|
(11.1
|
)
|
|
(0.8
|
)
|
|
(13.9
|
)
|
|
(3.5
|
)
|
||||
Pension and other postretirement non-service cost
|
2.4
|
|
|
(11.8
|
)
|
|
14.7
|
|
|
(10.1
|
)
|
||||
Interest rate swap settlement gain
(1)
|
—
|
|
|
—
|
|
|
21.2
|
|
|
—
|
|
||||
Miscellaneous
|
0.6
|
|
|
0.1
|
|
|
3.6
|
|
|
(0.4
|
)
|
||||
Total Other, net
|
$
|
(1.7
|
)
|
|
$
|
(6.8
|
)
|
|
$
|
42.4
|
|
|
$
|
(0.3
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating Revenues
|
|
|
|
|
|
|
|
||||||||
Gas Distribution Operations
|
|
|
|
|
|
|
|
||||||||
Unaffiliated
|
$
|
418.6
|
|
|
$
|
431.1
|
|
|
$
|
2,347.8
|
|
|
$
|
2,139.9
|
|
Intersegment
|
3.3
|
|
|
3.5
|
|
|
9.8
|
|
|
10.6
|
|
||||
Total
|
421.9
|
|
|
434.6
|
|
|
2,357.6
|
|
|
2,150.5
|
|
||||
Electric Operations
|
|
|
|
|
|
|
|
||||||||
Unaffiliated
|
476.2
|
|
|
485.8
|
|
|
1,304.4
|
|
|
1,365.5
|
|
||||
Intersegment
|
0.2
|
|
|
0.2
|
|
|
0.6
|
|
|
0.6
|
|
||||
Total
|
476.4
|
|
|
486.0
|
|
|
1,305.0
|
|
|
1,366.1
|
|
||||
Corporate and Other
|
|
|
|
|
|
|
|
||||||||
Unaffiliated
|
0.2
|
|
|
0.1
|
|
|
0.6
|
|
|
0.9
|
|
||||
Intersegment
|
116.4
|
|
|
126.4
|
|
|
346.6
|
|
|
367.7
|
|
||||
Total
|
116.6
|
|
|
126.5
|
|
|
347.2
|
|
|
368.6
|
|
||||
Eliminations
|
(119.9
|
)
|
|
(130.1
|
)
|
|
(357.0
|
)
|
|
(378.9
|
)
|
||||
Consolidated Operating Revenues
|
$
|
895.0
|
|
|
$
|
917.0
|
|
|
$
|
3,652.8
|
|
|
$
|
3,506.3
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Gas Distribution Operations
|
$
|
(455.2
|
)
|
|
$
|
(15.4
|
)
|
|
$
|
(94.4
|
)
|
|
$
|
367.1
|
|
Electric Operations
|
134.9
|
|
|
125.1
|
|
|
300.4
|
|
|
288.3
|
|
||||
Corporate and Other
|
4.4
|
|
|
1.5
|
|
|
(2.9
|
)
|
|
(4.8
|
)
|
||||
Consolidated Operating Income
|
$
|
(315.9
|
)
|
|
$
|
111.2
|
|
|
$
|
203.1
|
|
|
$
|
650.6
|
|
Index
|
Page
|
Executive Summary
|
|
Summary of Consolidated Financial Results
|
|
Results and Discussion of Segment Operations
|
|
Gas Distribution Operations
|
|
Electric Operations
|
|
Off Balance Sheet
Arrangements
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||
Operating Income (Loss)
|
$
|
(315.9
|
)
|
|
$
|
111.2
|
|
|
$
|
(427.1
|
)
|
|
$
|
203.1
|
|
|
$
|
650.6
|
|
|
$
|
(447.5
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in millions, except per share amounts)
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||
Operating Revenues
|
$
|
895.0
|
|
|
$
|
917.0
|
|
|
$
|
(22.0
|
)
|
|
$
|
3,652.8
|
|
|
$
|
3,506.3
|
|
|
$
|
146.5
|
|
Cost of Sales (excluding depreciation and amortization)
|
222.0
|
|
|
233.6
|
|
|
(11.6
|
)
|
|
1,259.7
|
|
|
1,062.7
|
|
|
197.0
|
|
||||||
Total Net Revenues
|
673.0
|
|
|
683.4
|
|
|
(10.4
|
)
|
|
$
|
2,393.1
|
|
|
$
|
2,443.6
|
|
|
$
|
(50.5
|
)
|
|||
Other Operating Expenses
|
988.9
|
|
|
572.2
|
|
|
416.7
|
|
|
2,190.0
|
|
|
1,793.0
|
|
|
397.0
|
|
||||||
Operating Income (Loss)
|
(315.9
|
)
|
|
111.2
|
|
|
(427.1
|
)
|
|
203.1
|
|
|
650.6
|
|
|
(447.5
|
)
|
||||||
Total Other Deductions, net
|
(118.1
|
)
|
|
(94.7
|
)
|
|
(23.4
|
)
|
|
(268.3
|
)
|
|
(372.6
|
)
|
|
104.3
|
|
||||||
Income Taxes
|
(94.5
|
)
|
|
2.5
|
|
|
(97.0
|
)
|
|
(26.3
|
)
|
|
97.1
|
|
|
(123.4
|
)
|
||||||
Net Income (Loss)
|
(339.5
|
)
|
|
14.0
|
|
|
(353.5
|
)
|
|
(38.9
|
)
|
|
180.9
|
|
|
(219.8
|
)
|
||||||
Preferred dividends
|
(5.6
|
)
|
|
—
|
|
|
(5.6
|
)
|
|
(6.9
|
)
|
|
—
|
|
|
(6.9
|
)
|
||||||
Net Income (Loss) Available to Common Shareholders
|
(345.1
|
)
|
|
14.0
|
|
|
(359.1
|
)
|
|
(45.8
|
)
|
|
180.9
|
|
|
(226.7
|
)
|
||||||
Basic Earnings (Loss) Per Share
|
$
|
(0.95
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.99
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
0.55
|
|
|
$
|
(0.68
|
)
|
Basic Average Common Shares Outstanding
|
363.9
|
|
|
331.1
|
|
|
32.8
|
|
|
352.1
|
|
|
326.7
|
|
|
25.4
|
|
•
|
On October 1, 2018, the first step of a three step implementation of new rates went into effect at NIPSCO following IURC approval of a settlement with parties on its gas base rate case. The settlement supports continued investment in system upgrades, technology improvements and other measures to increase pipeline safety and system reliability and will ultimately result in an annual revenue increase of $107.3 million, inclusive of amounts being recovered through various tracker programs and reflecting the impact of the TCJA.
|
•
|
On August 31, 2018, Columbia of Pennsylvania filed a settlement agreement in its base rate case with the Pennsylvania PUC. If approved as filed, the settlement supports an annual revenue increase of $26.0 million to upgrade and replace natural gas distribution pipelines and reflects the impact of the TCJA. An order is expected in the fourth quarter of 2018 with new rates to be implemented in December 2018.
|
•
|
On October 25, 2018, Columbia of Ohio filed a settlement agreement in its CEP application pending before the PUCO. If approved as filed, the initial $74.5 million CEP rider would allow recovery of deferred capital investments made between 2011 and 2017 that are not currently recovered through its IRP modernization tracker. The settlement also benefits customers by reducing base rates by approximately $23 million to reflect the impact of the TCJA.
|
•
|
On August 28, 2018, Columbia of Virginia filed a base rate case with the VSCC to recover costs associated with ongoing infrastructure investment programs and to incorporate changes from the TCJA. If approved as filed, the request would result in an annual revenue increase of $22.2 million. A VSCC order is expected in the second half of 2019 with interim rates to be implemented February 1, 2019.
|
•
|
On September 19, 2018, Columbia of Massachusetts' withdrew its base rate case pending before the Massachusetts DPU to focus on service restoration and assisting customers impacted by the Greater Lawrence Incident.
|
•
|
A settlement of Columbia of Maryland's base rate case remains pending before the Maryland PSC. The settlement supports continued replacement of gas pipelines and pipeline safety upgrades, and reflects the impact of federal tax reform. If approved as filed, the settlement would result in an annual revenue increase of $3.7 million. A Maryland PSC order is expected in the fourth quarter of 2018 with rates anticipated to be effective November 2018.
|
•
|
On October 31, 2018, NIPSCO submitted its 2018 Integrated Resource Plan to the IURC. The plan evaluated demand-side and supply-side resource alternatives to reliably and cost effectively meet NIPSCO customers' future energy requirements over the ensuing 20 years. The Integrated Resource Plan proposes to retire R.M. Schahfer Generating Station
|
•
|
Also on October 31, 2018 NIPSCO filed an electric base rate case with the IURC to address anticipated revenue loss resulting from the WCE filing, as well as to address impacts of the TCJA on customer rates. If approved as filed, the request is expected to increase annual revenues by
$21.4 million
. An IURC order is anticipated in the third quarter of 2019, with rates effective in September 2019.
|
•
|
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. A settlement was filed on October 25, 2018, in NIPSCO's latest tracker update request which remains pending before the IURC. It seeks a semi-annual incremental rate decrease of $11.2 million, due primarily to the pass-back to customers of a $14.1 million base rate refund for the January through May 2018 period related to the TCJA. An order is expected in the fourth quarter of 2018.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||
Operating Income (Loss)
|
$
|
(455.2
|
)
|
|
$
|
(15.4
|
)
|
|
$
|
(439.8
|
)
|
|
$
|
(94.4
|
)
|
|
$
|
367.1
|
|
|
$
|
(461.5
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Revenues
|
$
|
421.9
|
|
|
$
|
434.6
|
|
|
$
|
(12.7
|
)
|
|
$
|
2,357.6
|
|
|
$
|
2,150.5
|
|
|
$
|
207.1
|
|
Less: Cost of gas sold (excluding depreciation and amortization)
|
85.7
|
|
|
94.6
|
|
|
(8.9
|
)
|
|
875.1
|
|
|
662.0
|
|
|
213.1
|
|
||||||
Net Revenues
|
336.2
|
|
|
340.0
|
|
|
(3.8
|
)
|
|
1,482.5
|
|
|
1,488.5
|
|
|
(6.0
|
)
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operation and maintenance
|
678.5
|
|
|
249.6
|
|
|
428.9
|
|
|
1,214.2
|
|
|
787.3
|
|
|
426.9
|
|
||||||
Depreciation and amortization
|
72.5
|
|
|
67.9
|
|
|
4.6
|
|
|
215.0
|
|
|
199.5
|
|
|
15.5
|
|
||||||
Other taxes
|
40.4
|
|
|
37.9
|
|
|
2.5
|
|
|
147.7
|
|
|
134.6
|
|
|
13.1
|
|
||||||
Total Operating Expenses
|
791.4
|
|
|
355.4
|
|
|
436.0
|
|
|
1,576.9
|
|
|
1,121.4
|
|
|
455.5
|
|
||||||
Operating Income (Loss)
|
$
|
(455.2
|
)
|
|
$
|
(15.4
|
)
|
|
$
|
(439.8
|
)
|
|
$
|
(94.4
|
)
|
|
$
|
367.1
|
|
|
$
|
(461.5
|
)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
$
|
260.2
|
|
|
$
|
264.2
|
|
|
$
|
(4.0
|
)
|
|
$
|
1,540.8
|
|
|
$
|
1,404.4
|
|
|
$
|
136.4
|
|
Commercial
|
81.8
|
|
|
80.9
|
|
|
0.9
|
|
|
517.6
|
|
|
456.0
|
|
|
61.6
|
|
||||||
Industrial
|
39.2
|
|
|
39.7
|
|
|
(0.5
|
)
|
|
161.7
|
|
|
156.5
|
|
|
5.2
|
|
||||||
Off-System
|
22.0
|
|
|
30.4
|
|
|
(8.4
|
)
|
|
65.2
|
|
|
97.1
|
|
|
(31.9
|
)
|
||||||
Other
|
18.7
|
|
|
19.4
|
|
|
(0.7
|
)
|
|
72.3
|
|
|
36.5
|
|
|
35.8
|
|
||||||
Total
|
$
|
421.9
|
|
|
$
|
434.6
|
|
|
$
|
(12.7
|
)
|
|
$
|
2,357.6
|
|
|
$
|
2,150.5
|
|
|
$
|
207.1
|
|
Sales and Transportation (MMDth)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
13.8
|
|
|
14.5
|
|
|
(0.7
|
)
|
|
187.9
|
|
|
157.2
|
|
|
30.7
|
|
||||||
Commercial
|
17.5
|
|
|
17.3
|
|
|
0.2
|
|
|
129.7
|
|
|
111.3
|
|
|
18.4
|
|
||||||
Industrial
|
132.1
|
|
|
125.9
|
|
|
6.2
|
|
|
417.7
|
|
|
380.3
|
|
|
37.4
|
|
||||||
Off-System
|
7.5
|
|
|
11.1
|
|
|
(3.6
|
)
|
|
21.9
|
|
|
33.8
|
|
|
(11.9
|
)
|
||||||
Other
|
—
|
|
|
0.3
|
|
|
(0.3
|
)
|
|
0.3
|
|
|
0.2
|
|
|
0.1
|
|
||||||
Total
|
170.9
|
|
|
169.1
|
|
|
1.8
|
|
|
757.5
|
|
|
682.8
|
|
|
74.7
|
|
||||||
Heating Degree Days
|
51
|
|
|
75
|
|
|
(24
|
)
|
|
3,498
|
|
|
2,911
|
|
|
587
|
|
||||||
Normal Heating Degree Days
|
85
|
|
|
85
|
|
|
—
|
|
|
3,576
|
|
|
3,576
|
|
|
—
|
|
||||||
% Warmer than Normal
|
(40
|
)%
|
|
(12
|
)%
|
|
|
|
|
(2
|
)%
|
|
(19
|
)%
|
|
|
|||||||
Gas Distribution Customers
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
|
|
|
|
|
|
3,140,942
|
|
|
3,114,223
|
|
|
26,719
|
|
|||||||||
Commercial
|
|
|
|
|
|
|
276,832
|
|
|
275,424
|
|
|
1,408
|
|
|||||||||
Industrial
|
|
|
|
|
|
|
6,174
|
|
|
6,163
|
|
|
11
|
|
|||||||||
Other
|
|
|
|
|
|
|
5
|
|
|
3
|
|
|
2
|
|
|||||||||
Total
|
|
|
|
|
|
|
3,423,953
|
|
|
3,395,813
|
|
|
28,140
|
|
•
|
A revenue reserve in 2018 resulting from the probable future refund of certain collections from customers as a result of the lower income tax rate from the TCJA of $11.8 million.
|
•
|
Decreased rates from implementation of regulatory outcomes related to the TCJA of $7.0 million.
|
•
|
New rates from infrastructure replacement programs and base rate proceedings of $13.0 million.
|
•
|
Expenses related to third-party claims and other costs following the Greater Lawrence Incident of $451.6 million.
|
•
|
Increased depreciation of $4.8 million due to higher capital expenditures placed in service.
|
•
|
Decreased outside services of $8.5 million primarily due to IT service provider transition costs in 2017.
|
•
|
A revenue reserve in 2018 resulting from the probable future refund of certain collections from customers as a result of the lower income tax rate from the TCJA of $78.2 million.
|
•
|
Decreased rates from implementation of regulatory outcomes related to the TCJA of $13.4 million.
|
•
|
Higher revenues from the effects of colder weather in 2018 of $34.8 million.
|
•
|
New rates from infrastructure replacement programs and base rate proceedings of $34.7 million.
|
•
|
Increased customer growth and usage of $13.1 million.
|
•
|
Higher regulatory, tax and depreciation trackers, which are offset in expense, of $3.1 million.
|
•
|
Expenses related to third-party claims and other costs following the Greater Lawrence Incident of $451.6 million.
|
•
|
Increased depreciation of $15.1 million due to higher capital expenditures placed in service.
|
•
|
Increased property taxes of $5.1 million.
|
•
|
Lower outside services expenses of $12.2 million primarily due to IT service provider transition costs in 2017 and ongoing savings related to the new IT service agreements.
|
•
|
Decreased employee and administrative expenses of $9.5 million.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||
Operating Income
|
$
|
134.9
|
|
|
$
|
125.1
|
|
|
$
|
9.8
|
|
|
$
|
300.4
|
|
|
$
|
288.3
|
|
|
$
|
12.1
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating revenues
|
$
|
476.4
|
|
|
$
|
486.0
|
|
|
$
|
(9.6
|
)
|
|
$
|
1,305.0
|
|
|
$
|
1,366.1
|
|
|
$
|
(61.1
|
)
|
Less: Cost of sales (excluding depreciation and amortization)
|
136.3
|
|
|
139.0
|
|
|
(2.7
|
)
|
|
384.6
|
|
|
400.9
|
|
|
(16.3
|
)
|
||||||
Net Revenues
|
340.1
|
|
|
347.0
|
|
|
(6.9
|
)
|
|
920.4
|
|
|
965.2
|
|
|
(44.8
|
)
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operation and maintenance
|
123.4
|
|
|
136.0
|
|
|
(12.6
|
)
|
|
377.9
|
|
|
420.1
|
|
|
(42.2
|
)
|
||||||
Depreciation and amortization
|
66.3
|
|
|
69.8
|
|
|
(3.5
|
)
|
|
196.3
|
|
|
212.0
|
|
|
(15.7
|
)
|
||||||
Other taxes
|
15.5
|
|
|
16.1
|
|
|
(0.6
|
)
|
|
45.8
|
|
|
44.8
|
|
|
1.0
|
|
||||||
Total Operating Expenses
|
205.2
|
|
|
221.9
|
|
|
(16.7
|
)
|
|
620.0
|
|
|
676.9
|
|
|
(56.9
|
)
|
||||||
Operating Income
|
$
|
134.9
|
|
|
$
|
125.1
|
|
|
$
|
9.8
|
|
|
$
|
300.4
|
|
|
$
|
288.3
|
|
|
$
|
12.1
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Residential
|
$
|
154.7
|
|
|
$
|
138.0
|
|
|
$
|
16.7
|
|
|
$
|
382.3
|
|
|
$
|
363.7
|
|
|
$
|
18.6
|
|
Commercial
|
140.7
|
|
|
134.6
|
|
|
6.1
|
|
|
374.2
|
|
|
379.0
|
|
|
(4.8
|
)
|
||||||
Industrial
|
153.8
|
|
|
171.5
|
|
|
(17.7
|
)
|
|
468.7
|
|
|
531.4
|
|
|
(62.7
|
)
|
||||||
Wholesale
|
3.8
|
|
|
3.7
|
|
|
0.1
|
|
|
12.4
|
|
|
9.0
|
|
|
3.4
|
|
||||||
Other
|
23.4
|
|
|
38.2
|
|
|
(14.8
|
)
|
|
67.4
|
|
|
83.0
|
|
|
(15.6
|
)
|
||||||
Total
|
$
|
476.4
|
|
|
$
|
486.0
|
|
|
$
|
(9.6
|
)
|
|
$
|
1,305.0
|
|
|
$
|
1,366.1
|
|
|
$
|
(61.1
|
)
|
Sales (Gigawatt Hours)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Residential
|
1,121.5
|
|
|
1,002.3
|
|
|
119.2
|
|
|
2,754.6
|
|
|
2,523.9
|
|
|
230.7
|
|
||||||
Commercial
|
1,079.6
|
|
|
1,042.7
|
|
|
36.9
|
|
|
2,929.0
|
|
|
2,868.1
|
|
|
60.9
|
|
||||||
Industrial
|
2,223.3
|
|
|
2,390.9
|
|
|
(167.6
|
)
|
|
6,785.8
|
|
|
7,192.7
|
|
|
(406.9
|
)
|
||||||
Wholesale
|
2.5
|
|
|
6.1
|
|
|
(3.6
|
)
|
|
94.8
|
|
|
28.0
|
|
|
66.8
|
|
||||||
Other
|
34.7
|
|
|
31.2
|
|
|
3.5
|
|
|
95.2
|
|
|
96.3
|
|
|
(1.1
|
)
|
||||||
Total
|
4,461.6
|
|
|
4,473.2
|
|
|
(11.6
|
)
|
|
12,659.4
|
|
|
12,709.0
|
|
|
(49.6
|
)
|
||||||
Cooling Degree Days
|
739
|
|
|
540
|
|
|
199
|
|
|
1,131
|
|
|
804
|
|
|
327
|
|
||||||
Normal Cooling Degree Days
|
570
|
|
|
570
|
|
|
|
|
|
799
|
|
|
799
|
|
|
|
|
||||||
% Warmer (Colder) than Normal
|
30
|
%
|
|
(5
|
)%
|
|
|
|
|
42
|
%
|
|
1
|
%
|
|
|
|
||||||
Electric Customers
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
|
|
|
|
|
|
410,848
|
|
|
407,998
|
|
|
2,850
|
|
|||||||||
Commercial
|
|
|
|
|
|
|
56,426
|
|
|
55,912
|
|
|
514
|
|
|||||||||
Industrial
|
|
|
|
|
|
|
2,285
|
|
|
2,311
|
|
|
(26
|
)
|
|||||||||
Wholesale
|
|
|
|
|
|
|
736
|
|
|
740
|
|
|
(4
|
)
|
|||||||||
Other
|
|
|
|
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|||||||||
Total
|
|
|
|
|
|
|
470,297
|
|
|
466,963
|
|
|
3,334
|
|
•
|
Decreased rates from implementation of regulatory outcomes related to the TCJA of $14.1 million.
|
•
|
Lower regulatory and depreciation trackers, which are offset in operating expense, of $9.9 million.
|
•
|
Decreased industrial usage of $4.6 million.
|
•
|
The effects of warmer weather of $14.7 million.
|
•
|
Increased rates from infrastructure replacement programs of $6.2 million.
|
•
|
Lower regulatory and depreciation trackers, which are offset in net revenues, of $9.9 million.
|
•
|
Decreased employee and administrative costs of $6.6 million.
|
•
|
Decreased outside service costs of $5.1 million on lower generation-related maintenance activities.
|
•
|
Increased depreciation of $2.8 million due to higher capital expenditures placed in service.
|
•
|
Lower regulatory and depreciation trackers, which are offset in operating expense, of $34.1 million.
|
•
|
Decreased rates from implementation of regulatory outcomes related to the TCJA of $22.7 million.
|
•
|
A revenue reserve in 2018 resulting from the probable future refund of certain collections from customers as a result of the lower income tax rate from the TCJA of $16.3 million.
|
•
|
Decreased industrial usage of $10.1 million.
|
•
|
Increased fuel handling costs of $5.9 million.
|
•
|
The effects of warmer weather of $24.2 million.
|
•
|
Increased rates from infrastructure replacement programs of $17.6 million.
|
•
|
Decreased regulatory and depreciation trackers, which are offset in net revenues, of $34.1 million.
|
•
|
Lower outside service costs of $20.8 million and lower materials and supplies costs of $5.3 million primarily related to lower generation-related maintenance activities.
|
•
|
Decreased employee and administrative costs of $10.1 million.
|
•
|
Increased depreciation of $8.1 million due to higher capital expenditures placed in service.
|
(in millions)
|
September 30, 2018
|
December 31, 2017
|
||||
Current Liquidity
|
|
|
||||
Revolving Credit Facility
|
$
|
1,850.0
|
|
$
|
1,850.0
|
|
Accounts Receivable Program
(1)
|
265.0
|
|
336.7
|
|
||
Less:
|
|
|
||||
Commercial Paper
|
746.0
|
|
869.0
|
|
||
Accounts Receivable Program Utilized
|
265.0
|
|
336.7
|
|
||
Letters of Credit Outstanding Under Credit Facility
|
10.2
|
|
11.1
|
|
||
Add:
|
|
|
||||
Cash and Cash Equivalents
|
41.8
|
|
29.0
|
|
||
Net Available Liquidity
|
$
|
1,135.6
|
|
$
|
998.9
|
|
|
S&P
|
Moody's
|
Fitch
|
|||
|
Rating
|
Outlook
|
Rating
|
Outlook
|
Rating
|
Outlook
|
NiSource
|
BBB+
|
Negative
|
Baa2
|
Stable
|
BBB
|
Stable
|
NIPSCO
|
BBB+
|
Negative
|
Baa1
|
Stable
|
BBB
|
Stable
|
Columbia of Massachusetts
|
BBB+
|
Negative
|
Baa2
|
Stable
|
Not rated
|
Not rated
|
Commercial Paper
|
A-2
|
Negative
|
P-2
|
Stable
|
F2
|
Stable
|
(10.1)
|
|
|
|
(10.2)
|
|
|
|
(10.3)
|
|
|
|
(31.1)
|
|
|
|
(31.2)
|
|
|
|
(32.1)
|
|
|
|
(32.2)
|
|
|
|
(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:
|
November 1, 2018
|
By:
|
/s/ Joseph W. Mulpas
|
|
|
|
|
Joseph W. Mulpas
|
|
|
|
|
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
ARTICLE I Background and Purpose
|
1
|
|
||
|
1.1
|
Background
|
1
|
|
|
1.2
|
Purpose
|
1
|
|
|
|
|
|
|
ARTICLE II Definitions
|
2
|
|
||
|
2.1
|
Affiliate
|
2
|
|
|
2.2
|
Benefits Committee
|
2
|
|
|
2.3
|
Board
|
2
|
|
|
2.4
|
Code
|
2
|
|
|
2.5
|
Company
|
2
|
|
|
2.6
|
Compensation
|
2
|
|
|
2.7
|
Disability or Disabled
|
2
|
|
|
2.8
|
Early Retirement
|
3
|
|
|
2.9
|
Effective Date
|
3
|
|
|
2.10
|
Final Average Compensation
|
3
|
|
|
2.11
|
NiSource Pension Plan
|
3
|
|
|
2.12
|
Normal Retirement
|
3
|
|
|
2.13
|
ONC Committee
|
3
|
|
|
2.14
|
Participant
|
3
|
|
|
2.15
|
Pension
|
3
|
|
|
2.16
|
Pension Restoration Plan
|
3
|
|
|
2.17
|
Plan
|
3
|
|
|
2.18
|
Plan Administrator
|
3
|
|
|
2.19
|
Post‑2004 Benefit
|
3
|
|
|
2.20
|
Pre‑2005 Benefit
|
3
|
|
|
2.21
|
Primary Social Security Benefit
|
4
|
|
|
2.22
|
Qualified Pension Plan
|
4
|
|
|
2.23
|
Retirement
|
4
|
|
|
2.24
|
Service
|
4
|
|
|
|
|
|
|
ARTICLE III Eligibility and Participation
|
4
|
|
||
|
|
|
|
|
ARTICLE IV Supplemental Retirement Pension
|
4
|
|
||
|
4.1
|
Applicability
|
4
|
|
|
4.2
|
Supplemental Retirement Pension
|
4
|
|
|
4.3
|
Reduction for Early Retirement
|
5
|
|
|
4.4
|
Separation from Service Prior to Early Retirement
|
6
|
|
|
4.5
|
Supplemental Disability Pension
|
6
|
|
|
4.6
|
Supplemental Spouse Pension
|
7
|
|
|
4.7
|
Retiree Death Benefit
|
8
|
|
|
4.8
|
Cost of Living Adjustment
|
8
|
|
|
4.9
|
Separate Agreement
|
8
|
|
|
|
|
|
ARTICLE V Supplemental Retirement Account
|
8
|
|
||
|
5.1
|
Applicability
|
8
|
|
|
5.2
|
Supplemental Retirement Account
|
8
|
|
|
5.3
|
Supplemental Credits
|
8
|
|
|
5.4
|
Separation from Service
|
8
|
|
|
5.5
|
Death
|
9
|
|
|
|
|
|
|
ARTICLE VI Distributions
|
9
|
|
||
|
6.1
|
Pre‑2005 Benefit
|
9
|
|
|
6.2
|
Post‑2004 Benefit
|
9
|
|
|
|
|
|
|
ARTICLE VII Change in Control
|
12
|
|
||
|
7.1
|
Change in Control
|
12
|
|
|
7.2
|
Potential Change in Control
|
14
|
|
|
7.3
|
Additional Service and Compensation Upon Change in Control
|
14
|
|
|
7.4
|
Waiver of Service and Age Requirements Upon Change in Control
|
14
|
|
|
7.5
|
Funding of Plan Benefits Upon Potential Change in Control
|
15
|
|
|
7.6
|
Plan Administration and Amendment Upon a Change in Control
|
15
|
|
|
7.7
|
Committee Discretion to Pay Lump Sum After a Change in Control
|
15
|
|
|
7.8
|
Lump Sum Election
|
15
|
|
|
7.9
|
Definitions
|
16
|
|
|
|
|
|
|
ARTICLE VIII Beneficiary Designation
|
17
|
|
||
|
8.1
|
Beneficiary Designation
|
17
|
|
|
8.2
|
Changing Beneficiary
|
17
|
|
|
8.3
|
No Beneficiary Designation
|
17
|
|
|
|
|
|
|
ARTICLE IX Plan Administration
|
17
|
|
||
|
9.1
|
Allocation of Duties to Committees
|
17
|
|
|
9.2
|
Agents
|
18
|
|
|
9.3
|
Information Required by Committee
|
18
|
|
|
9.4
|
Binding Effect of Decisions
|
18
|
|
|
|
|
|
|
ARTICLE X Claims Procedure
|
18
|
|
||
|
10.1
|
Claim
|
18
|
|
|
10.2
|
Review of Claim
|
18
|
|
|
10.3
|
Notice of Denial of Claim
|
19
|
|
|
10.4
|
Reconsideration of Denied Claim
|
19
|
|
|
|
|
|
|
ARTICLE XI Plan Amendment and Termination
|
20
|
|
||
|
11.1
|
Plan Amendment
|
20
|
|
|
11.2
|
Plan Termination
|
20
|
|
|
ii
|
|
|
|
|
|
|
ARTICLE XII Miscellaneous
|
21
|
|
||
|
12.1
|
Plan Financing
|
21
|
|
|
12.2
|
Non‑Compete and Related Provisions
|
21
|
|
|
12.3
|
Nonguarantee of Employment
|
21
|
|
|
12.4
|
Nonalienation of Benefits
|
22
|
|
|
12.5
|
Indemnification
|
22
|
|
|
12.6
|
Severability
|
23
|
|
|
12.7
|
Action by Company
|
23
|
|
|
12.8
|
Protective Provisions
|
23
|
|
|
12.9
|
Governing Law
|
23
|
|
|
12.1
|
Notice
|
23
|
|
|
12.11
|
Successors
|
23
|
|
|
12.12
|
Actuarial Assumptions
|
23
|
|
|
iii
|
|
(a)
|
The Participant attained age 65 in the year of Retirement, and
|
(b)
|
The Participant earned maximum taxable wages under Code Section 3121(a)(1) in all years prior to the year of Retirement. A Participant’s Primary Social Security Benefit will be deducted in accordance with Article IV, even though he or she may not be receiving or may not be eligible to receive Social Security benefits.
|
(a)
|
The sum of:
|
(i)
|
1.7% of the Participant’s Final Average Compensation multiplied by the Participant’s Service to a maximum of 30 years; plus
|
(ii)
|
0.6% of the Participant’s Final Average Compensation multiplied by the Participant’s Service in excess of 30 years.
|
(b)
|
The sum of:
|
(i)
|
3% of the Participant’s Final Average Compensation multiplied by the Participant’s Service to a maximum of 20 years; plus
|
(ii)
|
0.5% of the Participant’s Final Average Compensation multiplied by the Participant’s Service in excess of 20 years, to a maximum of 30 years;
|
(iii)
|
less 5% of the Participant’s Primary Social Security Benefit, multiplied by the Participant’s Service to a maximum of 20 years.
|
(a)
|
The sum of:
|
(i)
|
1.7% of the Participant’s Final Average Compensation multiplied by the Participant’s Service to a maximum of 30 years, plus
|
(ii)
|
0.6% of the Participant’s Final Average Compensation multiplied by the Participant’s Service in excess of 30 years.
|
(b)
|
The sum of:
|
(i)
|
3% of the Participant’s Final Average Compensation multiplied by the Participant’s Service to a maximum of 20 years; plus
|
(ii)
|
0.5% of the Participant’s Final Average Compensation multiplied by the Participant’s Service in excess of 20 years, to a maximum of 30 years; less
|
(iii)
|
5% of the Participant’s Primary Social Security Benefit, multiplied by the Participant’s Service to a maximum of 20 years.
|
(a)
|
25% of the Participant’s Final Average Compensation; or
|
(b)
|
the monthly amount that would have been payable to such surviving spouse if the Participant had elected payment of his or her monthly Supplemental Retirement Pension in the form of a reduced 50% joint and survivor Pension, with his or her spouse as the contingent annuitant, terminated employment (on the date of his or her actual death) and then died immediately prior to the commencement of payments.
|
(a)
|
Form of Payment
. Notwithstanding Sections 4.2, 4.3 and 4.4, a Participant shall receive distribution of his or her Pre‑2005 Benefit, pursuant to Articles IV or V, in the same form as his or her distribution under the NiSource Pension Plan, computed in the same manner as in the NiSource Pension Plan, or under any other Qualified Pension Plan, computed in the same manner as in such Qualified Pension Plan. Any election under the NiSource Pension Plan or any other Qualified Pension Plan shall apply to his or her Pre‑2005 Benefit pursuant to the preceding sentence only if it is made by written instrument delivered to the Plan Administrator at least 30 days prior to the date of such distribution. If such election is not so made at least 30 days prior to the date of distribution of his or her Pre‑2005 Benefit, the Participant’s Pre‑2005 Benefit shall be paid as a 50% joint and survivor Pension if such Participant is married, or as a single‑life Pension if such Participant is unmarried. If a Participant who makes an election pursuant to this subsection 6.1(a) at least 30 days prior to the date of distribution dies prior to distribution pursuant to such election, such election shall be revoked and the provisions of Article IV and subsection 6.1(b) shall apply.
|
(b)
|
Small Benefit Amounts
. At the discretion of the Plan Administrator, the present value of any Pre‑2005 Benefit payable under the Plan that does not exceed $5,000 may be paid to the Participant or his or her surviving spouse or other designated beneficiary in quarterly, semi‑annual or annual installments, or in a single lump sum.
|
(a)
|
Form of Payment
. The Post‑2004 Benefit shall be payable in a form available under the NiSource Pension Plan, computed in the same manner as in the NiSource Pension Plan, or under any other Qualified Pension Plan, computed in the same manner as in such Qualified Pension Plan, as elected by a Participant by written notice delivered to the Plan Administrator on or before December 31, 2005. Notwithstanding the preceding sentence, in the case of an employee who first becomes a Participant on or after January 1, 2005, the aforementioned election with respect to a Post‑2004 Benefit shall be made by written notice delivered to the Plan Administrator within 30 days after the date the Participant first becomes eligible to participate in the Plan and such election shall be effective with respect to Compensation related to services to be performed subsequent to the election; provided, however, that a Participant shall not be considered first eligible if, on the date he or she becomes a Participant, he or she participates in any other nonqualified plan of the same category (account
|
(b)
|
Specified Employees
. Notwithstanding any other provision of the Plan, in no event can a payment of a Post‑2004 Benefit, pursuant to Article IV or Section 5.4, to a Participant who is a Specified Employee of the Company or an Affiliate, at a time during which the Company’s capital stock or capital stock of an Affiliate is publicly traded on an established securities market, in the calendar year of his or her separation from Service be made before the date that is six months after the date of the Participant’s separation from Service with the Company and all Affiliates, unless such separation is due to his or her death or Disability.
|
(a)
|
Change in Ownership
. A Change in Ownership of the Company occurs on the date that any one person, or more than one Person Acting as a Group (as defined below), acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. However, if any one person or more than one Person Acting as a Group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a Change in Ownership of the Company, as applicable (or to cause a Change in Effective Control of the Company). An increase in the percentage of stock owned by any one person, or Persons Acting as a Group, as a result of a transaction in which the Company acquires its stock in exchange for property s be treated as an acquisition of stock. This paragraph (a) applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction.
|
(b)
|
Change in Effective Control
. A Change in Effective Control of the Company occurs on the date that either –
|
(i)
|
Any one person, or more than one Person Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or
|
(ii)
|
a majority of members of the Board is replaced during any 12‑month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election,
|
(c)
|
Change of Ownership of a Substantial Portion of Assets
. A Change of Ownership of a Substantial Portion of Assets occurs on the date that any one person, or more than one Person Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
|
(i)
|
A shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;
|
(ii)
|
An entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company;
|
(iii)
|
A person, or more than one Person Acting as a Group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or
|
(iv)
|
An entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (iii).
|
(d)
|
Persons Acting as a Group
. Persons shall not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time or as a result of the same public offering. However, persons shall be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other
|
(a)
|
The delivery to the Company by any “person,” as defined in Section 13(d)(3) of The Securities Exchange Act of 1934 (the “Act”), of a statement containing the information required by Schedule 13‑D under the Act, or any amendment to any such statement, that shows that such person has acquired, directly or indirectly, the beneficial ownership of (1) more than twenty percent (20%) of any class of equity security of the Company entitled to vote as a class in the election or removal from office of directors, or (2) more than twenty percent (20%) of the voting power of any group of classes of equity securities of the Company entitled to vote as a single class in the election or removal from office of directors.
|
(b)
|
The Company becomes aware that preliminary or definitive copies of a proxy statement and information statement or other information have been filed with the Securities and Exchange Commission pursuant to Rule 14a‑6, Rule 14c‑5 or Rule 14f‑1 under the Act relating to a proposed change in control of the Company.
|
(c)
|
The delivery to the Company pursuant to Rule 14d‑3 under the Act of a Tender Offer Statement relating to equity securities of the Company.
|
(d)
|
The Board adopts a resolution to the effect that for purposes of the Plan a Potential Change in Control has occurred.
|
(a)
|
a Change in Control occurs in the calendar year subsequent to the calendar year in which the election is made; and
|
(b)
|
(1) within 24 months following the Change in Control any one of the payment triggering conditions set forth in the Change in Control and
|
(i)
|
if no Change in Control and Termination Agreement is in effect between the Company and the Participant on the date of the Change in Control and within 24 months following the Change in Control the employment of the Participant with the Company is terminated by the Company for any reason other than Good Cause or the Participant terminates his or her employment with the Company for Good Reason.
|
(a)
|
“Good Cause” shall be deemed to exist if, and only if:
|
(i)
|
the Participant engages in acts or omissions constituting dishonesty, intentional breach of fiduciary obligation or intentional wrongdoing or malfeasance, in each case that results in substantial harm to the Company; or
|
(ii)
|
the Participant is convicted of a criminal violation involving fraud or dishonesty.
|
(b)
|
“Good Reason” shall be deemed to exist if, and only if:
|
(i)
|
there is a significant change in the nature or the scope of the Participant's authorities or duties;
|
(ii)
|
there is a significant reduction in the Participant's monthly rate of base salary, his or her opportunity to earn a bonus under an incentive bonus compensation plan maintained by the Company or his or her benefits; or
|
(iii)
|
the Company changes by 100 miles or more the principal location in which the Participant is required to perform services.
|
(a)
|
The Participant’s spouse;
|
(b)
|
The Participant’s children in equal shares, except that if any of the children predeceases the Participant but leaves issue surviving, then such issue shall take, by right of representation, the share the parent would have taken if living;
|
(c)
|
The Participant’s estate.
|
(a)
|
the specific reason or reasons for denial of the claim;
|
(b)
|
a specific reference to the pertinent Plan provisions upon which the denial is based;
|
(c)
|
a description of any additional material or information necessary for the claimant to perfect the claim, together with an explanation of why such material or information is necessary; and
|
(d)
|
an explanation of the Plan’s review procedure.
|
(a)
|
A Participant, while employed by the Company or within a period of three years after the Participant’s separation from Service for any reason, including Retirement (the “Restrictive Period”), engages in activity or employment that directly or
|
(b)
|
A Participant performs any action or makes any statement that is detrimental to the Company or its Affiliates, unless such action or statement is retracted to the Company’s satisfaction after the Participant is notified regarding such action or statement.
|
(a)
|
Limitation of Liability
. Notwithstanding any other provision of the Plan or the Trust, none of the Company, any member of the Benefits Committee or ONC Committee, nor an individual acting as an employee or agent of any of them, shall be liable to
|
(b)
|
Indemnity
. The Company shall indemnify and hold harmless each member of the Benefits Committee and the ONC Committee, or any employee of the Company or any individual acting as an employee or agent of either of them (to the extent not indemnified or saved harmless under any liability insurance or any other indemnification arrangement with respect to the Plan or the Trust) from any and all claims, losses, liabilities, costs and expenses (including attorneys’ fees) arising out of any actual or alleged act or failure to act made in good faith pursuant to the provisions of the Plan, including expenses reasonably incurred in the defense of any claim relating thereto with respect to the administration of the Plan or the Trust, except that no indemnification or defense shall be provided to any person with respect to any conduct that has been judicially determined, or agreed by the parties, to have constituted willful misconduct on the part of such person, or to have resulted in his or her receipt of personal profit or advantage to which he or she is not entitled. In connection with the indemnification provided by the preceding sentence, expenses incurred in defending a civil or criminal action, suit or proceeding, or incurred in connection with a civil or criminal investigation, may be paid by the Company in advance of the final disposition of such action, suit, proceeding, or investigation, as authorized by the Plan Administrator in the specific case, upon receipt of an undertaking by or on behalf of the party to be indemnified to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Company pursuant to this paragraph.
|
(a)
|
Notwithstanding anything to the contrary contained in the Plan, (1) in the event that the Internal Revenue Service prevails in its claim that benefits under the Plan constitute taxable income to a Participant, his or her spouse or other designated beneficiary, for any taxable year, prior to the taxable year in which such benefits are distributed to him or her, or (2) in the event that legal counsel satisfactory to the Company and the applicable Participant, his or her spouse or other designated beneficiary, renders an opinion that the Internal Revenue Service would likely prevail in such a claim, the Pre‑2005 Benefit, to the extent constituting taxable income, shall be immediately distributed to the Participant, his or her spouse or other designated beneficiary. For purposes of this Section, the Internal Revenue Service shall be deemed to have prevailed in a claim if such claim is upheld by a court of final jurisdiction, or, if based upon an opinion of legal counsel satisfactory to the Company and the Participant, his or her spouse or other designated beneficiary, the Plan fails to appeal a decision of the Internal Revenue Service, or a court of applicable jurisdiction, with respect to such claim to an appropriate Internal Revenue Service appeals authority or to a court of higher jurisdiction within the appropriate time period.
|
(b)
|
Notwithstanding anything to the contrary contained in the Plan, (1) in the event that the Internal Revenue Service prevails in its claim that benefits under the Plan constitute taxable income under Code Section 409A, and guidance and regulations thereunder, to a Participant, his or her spouse or other designated beneficiary, for
|
|
5.2
|
Timing of Payment
|
9
|
|
|
5.3
|
Changes to the Form of Payment
|
9
|
|
|
5.4
|
Specified Employees
|
9
|
|
|
5.5
|
Interest and Mortality Assumptions
|
10
|
|
|
|
|
|
|
ARTICLE VI Administration of Plan
|
10
|
|
||
|
6.1
|
Allocation of Duties to Committees
|
10
|
|
|
6.2
|
Agents
|
10
|
|
|
6.3
|
Information Required by Plan Administrator
|
10
|
|
|
6.4
|
Binding Effect of Decisions
|
11
|
|
|
|
|
|
|
ARTICLE VII CLAIMS PROCEDURE
|
11
|
|
||
|
7.1
|
Claims Procedure
|
11
|
|
|
7.2
|
Review of Claim
|
11
|
|
|
7.3
|
Notice of Denial of Claim
|
11
|
|
|
7.4
|
Reconsideration of Denied Claim
|
11
|
|
|
|
|
|
|
ARTICLE VIII PLAN AmendMENT or Termination
|
12
|
|
||
|
8.1
|
Plan Amendment
|
12
|
|
|
8.2
|
Plan Termination
|
13
|
|
|
|
|
|
|
ARTICLE IX Miscellaneous Provisions
|
13
|
|
||
|
9.1
|
Unsecured General Creditor
|
13
|
|
|
9.2
|
Income Tax Payout
|
13
|
|
|
9.3
|
General Conditions
|
13
|
|
|
9.4
|
No Guaranty of Benefits
|
14
|
|
|
9.5
|
No Enlargement of Employee Rights
|
14
|
|
|
9.6
|
Nonalienation of Benefits
|
14
|
|
|
9.7
|
Applicable Law
|
14
|
|
|
9.8
|
Incapacity of Recipient
|
14
|
|
|
9.9
|
Unclaimed Benefit
|
14
|
|
|
9.1
|
Limitations on Liability
|
15
|
|
|
|
|
|
|
SCHEDULE A
|
17
|
|
(a)
|
Eligibility
. As set forth in Article I, prior to January 1, 2004, only Employees of Columbia Energy Group (or its predecessor) who had benefits under a Basic Plan affected by the Limits, or by his or her deferrals under the DCP, participated in the Plan. Pursuant to the extension of participation in the Plan as explained in Article I, on or after January 1, 2004, each Employee meeting the participation requirements set forth in Section 3.1 shall participate in the Plan as of January 1, 2004, and shall be eligible to accrue a benefit under the Plan as of such date or, if later, as of the date that an Employee’s benefits under a Basic Plan are affected by the Limits or by his or her deferrals under the DCP.
|
(b)
|
Benefit Accrual
. With respect to any Participant who was first eligible to participate in the Plan on January 1, 2004 in accordance with this Section, but who had accrued benefits under a Basic Plan prior to such date, such Participant shall have benefits under the Plan calculated in accordance with the Plan’s general provisions, except that the Plan shall only consider the Participant’s Credited Service, Point Service, Compensation or Accrued Benefit under the Basic Plan earned on or after the date participation in the Plan begins (
i.e.
, January 1, 2004), as further described in Section 4.2, Section 4.4(b), Section 4.5(b) Section 4.6(b) and Section 4.7(b).
|
(a)
|
The benefit that would have been payable under a Basic Plan to a Participant, or to his or her Beneficiary, determined under a Basic Plan without regard to (i) the Limits or (ii) the Participant’s deferrals into the DCP, if any.
|
(b)
|
The benefit actually payable to the Participant, or to his or her Beneficiary, determined under a Basic Plan after applying the Limits and considering deferrals into the DCP, if any.
|
(a)
|
FAP Participant
. For a Participant whose Accrued Benefit under a Basic Plan is a FAP Benefit, the benefit payable under the Plan to the Participant, or to his or her Beneficiary under the Basic Plan, shall be equal to the excess (if any) of the benefit determined under paragraph (1) below over the benefit determined under paragraph (2) below:
|
(1)
|
The benefit that would have been payable under a Basic Plan to a Participant, or to his or her Beneficiary determined under a Basic Plan, considering only the Participant’s Credited Service and Compensation from and after the date the Participant first becomes eligible to participate in the Plan, determined without regard to (i) the Limits or (ii) the Participant’s deferrals into the DCP, if any.
|
(2)
|
The benefit actually payable to the Participant, or to his or her Beneficiary determined under a Basic Plan, calculated based upon the Participant’s Credited Service and Compensation from and after the date the Participant first becomes eligible to participate in the Plan, determined after applying the Limits and considering deferrals into the DCP, if any.
|
(b)
|
AB Participant
. For a Participant whose Accrued Benefit under a Basic Plan is an AB Benefit, the benefit payable under the Plan to the Participant, or to his or her Beneficiary under a Basic Plan, shall be equal to the excess (if any) of the benefit determined under paragraph (1) below over the benefit determined under paragraph (2) below:
|
(1)
|
The benefit that would have been payable under a Basic Plan to a Participant or his or her Beneficiary, determined as if the Participant’s Opening Balance under the Basic Plan was $0 as of the date the Participant first becomes eligible to participate in the Plan, and considering only the Participant’s Pay-Based Credits, Interest Credits and Compensation from and after such date, and determined without regard to (i) the Limits or (ii) the Participant’s deferrals into the DCP, if any.
|
(2)
|
The benefit actually payable under a Basic Plan to the Participant, or to his or her Beneficiary, determined as if the Participant’s Opening Balance under the Basic Plan was $0 as of the date the Participant first becomes eligible to participate in the Plan, and considering only the Participant’s Pay-Based Credits, Interest Credits and Compensation from and after such date, and determined after applying the Limits and considering deferrals into the DCP, if any.
|
(a)
|
In General
. Upon the conversion of any Participant's Accrued Benefit in a Basic Plan from a FAP Benefit to an AB II Benefit or from an AB I Benefit to an AB II Benefit, any benefit under the Plan shall, except as provided below, also be converted upon such date according to the conversion procedures set forth in the relevant Basic Plan, including determination of an Opening Balance.
|
(b)
|
Exception to the General Provision
. Notwithstanding the foregoing, with respect to any Participant in the Plan who is described in Section 3.2, such Participant's benefit under the Plan shall be converted according to the conversion procedures in the relevant Basic Plan, provided that any consideration of Credited Service and Compensation in the calculation of the Participant's Opening Balance shall be limited to Credited Service and Compensation earned from and after the date the Participant first becomes eligible to participate in the Plan.
|
(a)
|
In General
. The Opening Balance shall be calculated using the same methodology and factors as provided in the relevant Basic Plan. The Opening Balance under the Plan shall be determined as the excess of the Opening Balance determined in (1) below over the Opening Balance determined in (2) below:
|
(1)
|
The Participant's Opening Balance under the Basic Plan determined without regard to (i) the Limits or (ii) the Participant’s deferrals into the DCP, if any.
|
(2)
|
The Participant’s Opening Balance under the Basic Plan determined after applying the Limits and considering deferrals into the DCP, if any.
|
(b)
|
Exception to the General Provision
. For the purpose of determining the Opening Balance for any Participant in the Plan who is described in Section 3.2, the Opening Balance under the Plan shall be determined in accordance with Section 4.5(a) above, but considering a calculation of the Opening Balance under the Basic Plan using only the Participant’s Credited Service (or, if applicable, Point Service) and
|
(a)
|
Pay-Based Credits Generally
. Pay-Based Credits under the Plan shall be calculated using the same methodology and factors as provided in the relevant Basic Plan. Pay-Based Credits under the Plan shall be determined as the excess of the Pay-Based Credits determined in (1) below over the Pay-Based Credits determined in (2) below:
|
(1)
|
The Participant's Pay-Based Credits under the Basic Plan determined without regard to (i) the Limits or (ii) the Participant’s deferrals into the DCP, if any.
|
(2)
|
The Participant’s Pay-Based Credits under the Basic Plan determined after applying the Limits and considering deferrals into the DCP, if any.
|
(b)
|
Exception to the General Pay-Based Credits Provision
. For the purpose of determining the Pay-Based Credits for any Participant in the Plan who is described in Section 3.2, the Pay-Based Credits under the Plan shall be determined in accordance with Section 4.6(a) above, but considering a calculation of Pay-Based Credits under the Basic Plan using only Compensation from and after the date the Participant first becomes eligible to participate in the Plan.
|
(c)
|
Interest Credits
. Interest Credits under the Plan shall be calculated using the same methodology and factors as provided in the relevant Basic Plan.
|
(a)
|
Protected Benefit Generally
. The Protected Benefit under the Plan shall be calculated using the same methodology and factors as provided in the relevant Basic Plan. The Protected Benefit under the Plan shall be determined as the excess of the benefit determined in (1) below over the benefit determined in (2) below:
|
(1)
|
The Protected Benefit under the Basic Plan for the Participant, or for his or her Beneficiary, determined without regard to (i) the Limits or (ii) the Participant’s deferrals into the DCP, if any.
|
(2)
|
The Protected Benefit under the Basic Plan for the Participant, or for his or her Beneficiary, determined after applying the Limits and considering deferrals into the DCP, if any.
|
(b)
|
Exception to the General Protected Benefit Provision
. For the purpose of determining the Protected Benefit for any Participant in the Plan who is described in Section 3.2, the Protected Benefit under the Plan shall be determined in accordance with Section 4.7(a) above, but considering calculation of the Protected Benefit under the Basic Plan using only Credited Service and Compensation from and after the date the Participant first becomes eligible to participate in the Plan.
|
(a)
|
The benefit earned under the Plan shall be payable to a Participant in a form available under the Basic Plan, as elected by the Participant by notice delivered to the Plan Administrator on or before December 31, 2005. Notwithstanding the preceding sentence, in the case of an Employee who becomes a Participant on or after January 1, 2005, the aforementioned election with respect to a benefit shall be made no later than January 31 of the calendar year after the calendar year in which the Participant first becomes eligible to participate in the Plan, and such election shall be effective with respect to Compensation related to services to be performed subsequent to the election; provided, however, that a Participant shall not be considered first eligible if, on the date he or she becomes a Participant, he or she participates in any other nonqualified plan of the same category that is subject to Code Section 409A, maintained by the Company or an Affiliate.
|
(b)
|
If payment in the form of an annuity is elected, the annuity type shall be elected by the Participant at the time he or she makes the election described in the first or second sentence of subsection (a) above from among those annuities available at that time under the Basic Plan. If a benefit hereunder is paid in an annuity form other than a straight life annuity, the amount of the benefit under the Plan shall be reduced by the Basic Plan’s factors in effect at the time of such election for payment in a form other than a straight life annuity. If payment in the form of a lump sum is elected, the lump sum amount payable will be calculated in the same manner and according to the same interest rates and mortality tables as under the Basic Plan at the time of such election.
|
(c)
|
If the Participant fails to elect a form of payment as required under subsections (a) and (b) above, the Participant’s benefit shall be payable in a lump sum.
|
(a)
|
the specific reason or reasons for denial of the claim;
|
(b)
|
a specific reference to the pertinent Plan provisions upon which the denial is based;
|
(c)
|
a description of any additional material or information necessary for the claimant to perfect the claim, together with an explanation of why such material or information is necessary; and
|
(d)
|
an explanation of the Plan’s review procedure.
|
ARTICLE I BACKGROUND AND PURPOSE
|
1
|
|
||
|
1.1.
|
Background
|
1
|
|
|
1.2.
|
Purpose
|
2
|
|
|
|
|
|
|
ARTICLE II DEFINITIONS
|
2
|
|
||
|
2.1.
|
Account
|
2
|
|
|
2.2.
|
Affiliate
|
2
|
|
|
2.3.
|
Basic Plan
|
3
|
|
|
2.4.
|
Beneficiary
|
3
|
|
|
2.5.
|
Benefits Committee
|
3
|
|
|
2.6.
|
Board
|
3
|
|
|
2.7.
|
Code
|
3
|
|
|
2.8.
|
Company
|
3
|
|
|
2.9.
|
Compensation
|
3
|
|
|
2.10.
|
DCP
|
3
|
|
|
2.11.
|
Disability
|
3
|
|
|
2.12.
|
Effective Date.
|
3
|
|
|
2.13.
|
Eligible Employee
|
3
|
|
|
2.14.
|
Employer
|
4
|
|
|
2.15.
|
ERISA
|
4
|
|
|
2.16.
|
In-Service Withdrawal
|
4
|
|
|
2.17.
|
Limits
|
4
|
|
|
2.18.
|
ONC Committee
|
4
|
|
|
2.19.
|
Participant
|
4
|
|
|
2.20.
|
Plan
|
4
|
|
|
2.21.
|
Plan Administrator
|
4
|
|
|
2.22.
|
Plan Year
|
4
|
|
|
2.23.
|
Post-2004 Account
|
4
|
|
|
2.24.
|
Pre-2005 Account
|
4
|
|
|
2.25.
|
Separation from Service
|
4
|
|
|
2.26.
|
Specified Employee
|
4
|
|
|
2.27.
|
Unforeseeable Emergency
|
5
|
|
|
2.28.
|
Valuation Date
|
5
|
|
|
|
|
|
|
ARTICLE III ELIGIBILITY AND PARTICIPATION
|
5
|
|
||
|
3.1.
|
Eligibility
|
5
|
|
|
3.2.
|
Participation
|
5
|
|
|
3.3.
|
Continuation of Participation
|
5
|
|
|
3.4.
|
Amendment of Eligibility Criteria
|
5
|
|
|
|
|
|
|
ARTICLE IV ACCOUNTS
|
6
|
|
||
|
|
|
|
|
|
|
|
|
|
4.1.
|
Account
|
6
|
|
|
4.2.
|
Employer Credits
|
6
|
|
|
4.3.
|
Timing of Credits; Withholding
|
8
|
|
|
4.4.
|
Determination of Account
|
8
|
|
|
4.5.
|
Statement of Account
|
9
|
|
|
|
|
|
|
ARTICLE V INVESTMENTS
|
9
|
|
||
|
5.1.
|
Investment Options
|
9
|
|
|
5.2.
|
Election of Investment Options
|
9
|
|
|
5.3.
|
Allocation of Investment Options
|
9
|
|
|
5.4.
|
No Actual Investment
|
9
|
|
|
|
|
|
|
ARTICLE VI PAYMENTS AND DISTRIBUTIONS
|
10
|
|
||
|
6.1.
|
Distributions/Events Generally
|
10
|
|
|
6.2.
|
In-Service Withdrawals
|
10
|
|
|
6.3.
|
Distributions After Separation from Service
|
11
|
|
|
6.4.
|
Unforeseeable Emergency Distributions
|
13
|
|
|
6.5.
|
Automatic Cash-Out
|
13
|
|
|
6.6.
|
Special Payment Election by December 31, 2006, for Code Section 409A Transition Relief
|
14
|
|
|
6.7.
|
Withholding for Taxes
|
14
|
|
|
6.8.
|
Payment to Guardian
|
14
|
|
|
|
|
|
|
ARTICLE VII BENEFICIARY DESIGNATION
|
14
|
|
||
|
7.1.
|
Beneficiary Designation
|
14
|
|
|
7.2.
|
No Beneficiary Designation
|
14
|
|
|
|
|
|
|
ARTICLE VIII PLAN ADMINISTRATION
|
15
|
|
||
|
8.1.
|
Allocation of Duties to Committees
|
15
|
|
|
8.2.
|
Agents
|
15
|
|
|
8.3.
|
Information Required by Plan Administrator
|
15
|
|
|
8.4.
|
Binding Effect of Decisions
|
15
|
|
|
|
|
|
|
ARTICLE IX CLAIMS PROCEDURE
|
15
|
|
||
|
9.1.
|
Claim
|
15
|
|
|
9.2.
|
Review of Claim
|
16
|
|
|
9.3.
|
Notice of Denial of Claim
|
16
|
|
|
9.4.
|
Reconsideration of Denied Claim
|
16
|
|
|
9.5.
|
Employer to Supply Information
|
17
|
|
|
|
|
|
|
ARTICLE X PLAN AMENDMENT AND TERMINATION
|
17
|
|
||
|
10.1.
|
Plan Amendment
|
17
|
|
|
10.2.
|
Partial Plan Termination
|
18
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE XI MISCELLANEOUS PROVISIONS
|
18
|
|
||
|
11.1.
|
Unfunded Plan
|
18
|
|
|
11.2.
|
Company and Employer Obligations
|
18
|
|
|
11.3.
|
Unsecured General Creditor
|
18
|
|
|
11.4.
|
Trust Fund
|
18
|
|
|
11.5.
|
Nonalienation of Benefits
|
19
|
|
|
11.6.
|
Indemnification
|
19
|
|
|
11.7.
|
No Enlargement of Employee Rights
|
20
|
|
|
11.8.
|
Protective Provisions
|
20
|
|
|
11.9.
|
Governing Law
|
20
|
|
|
11.10.
|
Validity
|
20
|
|
|
11.11.
|
Notice
|
20
|
|
|
11.12.
|
Successors
|
21
|
|
|
11.13.
|
Incapacity of Recipient
|
21
|
|
|
11.14.
|
Unclaimed Benefit
|
21
|
|
|
11.15.
|
Tax Compliance and Payouts.
|
21
|
|
|
11.16.
|
General Conditions
|
22
|
|
(a)
|
Matching Contribution Credits
. The amount of Employer credits related to Matching Contributions for Participant eligible to receive such contributions under Section 3.1 shall equal (1) minus (2) below:
|
(1)
|
The total amount of Matching Contributions that would otherwise have been contributed to the Basic Plan for the Participant during all years in which the Participant participated in the Basic Plan without regard to the Limits;
|
(2)
|
The actual amount of Matching Contributions that have been contributed to the Basic Plan for the Participant.
|
(b)
|
Profit Sharing Contribution Credits
. Employer credits pursuant to this Section 4.2(b) shall be reflected in the Plan for all Participants in the Plan on or after such date, including the following: (1) those who received Profit Sharing Contributions to the Basic Plan for 2010 or later that were subject to the Limits, or (2) those who otherwise had Profit Sharing Contributions limited or adjusted under the Basic Plan on or after January 1, 2011. The amount of Employer credits related to Profit Sharing Contributions for a participant shall equal (1) minus (2) below:
|
(1)
|
The total amount of Profit Sharing Contributions that otherwise would have been contributed to the Basic Plan for the Participant
|
(2)
|
The actual amount of Profit Sharing Contributions that have been contributed to the Basic Plan for the Participant.
|
(1)
|
The total amount of Profit Sharing Contributions that otherwise would have been contributed to the Basic Plan for the Participant during all years in which the Participant participated in the Basic Plan, had Profit Sharing Contributions been calculated using this Plan's definition of Compensation;
|
(2)
|
The actual amount of Profit Sharing Contributions that have been contributed to the Basic Plan for the Participant.
|
(c)
|
Next-Gen Contribution Credits
. With respect to a Participant who is classified by the Employer as an "exempt employee" and who is hired or rehired on or after January 1, 2010, the amount of Employer credits for a Participant shall equal (1) minus (2) below:
|
(1)
|
The total amount of the Employer Contribution that otherwise would have been contributed to the Basic Plan in an amount equal to 3% of the Participant's Compensation (as defined under this Plan) without regard to the Limits;
|
(2)
|
The actual amount of the Employer Contribution under the Basic Plan that was contributed to the Participant in an amount equal to 3% of the Participant's Compensation (as defined under the Basic Plan).
|
(1)
|
The total amount of the Employer Contribution that otherwise would have been contributed to the Basic Plan in an amount equal to 3% of the Participant's Compensation (as defined under this Plan);
|
(2)
|
The actual amount of the Employer Contribution under the Basic Plan that was contributed to the Participant in an amount equal to 3% of the Participant's Compensation (as defined under the Basic Plan).
|
(a)
|
New Employer Credits
. The Account shall be increased by any Employer credits made in accordance with Sections 4.2 or 4.3, as applicable, since such preceding Valuation Date.
|
(b)
|
Distributions
. The Account shall be reduced by any benefits distributed from the Account to the Participant since such preceding Valuation Date.
|
(c)
|
Valuation of Account
. The Account shall be increased or decreased by the aggregate earnings, gains and losses on such Account since such preceding Valuation Date, based on the manner in which the Participant's Account has been hypothetically allocated among the investment options selected by the Participant.
|
(a)
|
General Payments
. Subject to the limitations of paragraph (b) below, a Participant, by filing a written request with the Plan Administrator, may, while employed by an Employer or an Affiliate, elect to withdraw 33%, 67% or 100% of his or her Pre-2005 Account.
|
(b)
|
Limitation on In-Service Withdrawals
. Any In-Service Withdrawal under paragraph (a) of this Section 6.2 shall be subject to a 10% early distribution penalty. In addition, the following conditions shall apply to In-Service Withdrawals:
|
(1)
|
Only one In-Service Withdrawal shall be permitted in any 12-month period.
|
(2)
|
In-Service Withdrawals shall require suspension of Employer credits (but not credits of earnings or losses) under the Plan for a period of time varying with the percentage of the value of the Participant’s Pre-2005 Account that is withdrawn, according to the following schedule:
|
Percentage
|
Suspension
|
Up to 33%
|
2 months
|
34 ‑ 67%
|
4 months
|
68 ‑ 100%
|
6 months
|
(a)
|
Generally
. If a Participant experiences a Separation from Service, the provisions of this Section 6.3 shall apply to the distribution of the Participant’s Account.
|
(b)
|
Pre-2005 Account
.
|
(1)
|
Form of Payment of Pre-2005 Account
. The Pre-2005 Account payable under the Plan to a Participant or his or her spouse, Beneficiary, or legal representative shall be paid in the same form under which the Basic Plan benefit is payable to the Participant or his or her spouse, Beneficiary, or legal representative. The Participant’s election under the Basic Plan of any optional form of payment of his or her Basic Plan benefit (with the valid consent of his or her surviving spouse where required under the Basic Plan) shall also be applicable to the payment of his or her Pre-2005 Account under the Plan.
|
(2)
|
Timing of Payment of Pre-2005 Account
. Payment of the Pre-2005 Account under the Plan to a Participant or his or her spouse, Beneficiary, or legal representative under the Plan shall commence on the same date as payment of the benefit to the Participant or his or her spouse, Beneficiary, or legal representative under the Basic Plan commences. Any election under the Basic Plan made by the Participant with respect to the commencement of payment of his or her benefit under the Basic Plan shall also be applicable with respect to the commencement of payment of his or her Pre-2005 Account under the Plan.
|
(3)
|
Approval by Plan Administrator
. Notwithstanding the provisions of paragraphs (i) and (ii) above, an election made by the Participant under the Basic Plan with respect to the form of payment of his or her Pre-2005 Account thereunder (with the valid consent of his or her surviving spouse where required under the Basic Plan), or the date for commencement of payment thereof, shall not be effective with respect to the form of payment or date for commencement of payment of his or her Pre-2005 Account under the Plan unless such election is expressly approved in writing by the Plan Administrator. If the Plan Administrator shall not approve such election in writing, then the form of payment or date for commencement of payment of the Participant's Pre-2005 Account under the Plan shall be selected by the Plan Administrator at its sole discretion.
|
(c)
|
Post-2004 Account
.
|
(1)
|
Form of Payment of Post-2004 Account
. The Post-2004 Account shall be payable in a form elected by a Participant no later than December 31, 2005. Notwithstanding the preceding sentence, in the case of an Eligible Employee who becomes a Participant on or after January 1, 2005, the aforementioned election with respect to the form of payment of a Post-2004 Account shall be made at such time prescribed by the Plan Administrator, which shall end no later than
|
(2)
|
Timing of Payment of Post-2004 Account
. Payment of a Post-2004 Account in accordance with this Section 6.3 shall commence within 45 days after the Participant’s date of Separation from Service, or, if later, within such timeframe permitted under Code Section 409A, and guidance and regulations thereunder.
|
(3)
|
Modifications to Time and Form of Payment
. A Participant cannot change the time or form of payment of a Post-2004 Account under this Subsection 6.3(b) unless (A) such election does not take effect until at least 12 months after the date the election is made, (B) in the case of an election related to a payment not related to the Participant’s Disability or death, the first payment with respect to which such new election is effective is deferred for a period of not less than five years from the date such payment would otherwise have been made, and (C) any election related to a payment based upon a specific time or pursuant to a fixed schedule may not be made less than 12 months prior to the date of the first scheduled payment.
|
(4)
|
Time of Payment for Specified Employees
. Notwithstanding any other provision of the Plan, in no event can a payment of a Post-2004 Account to a Participant who is a Specified Employee, at a time during which the Company’s capital stock or capital stock of an Affiliate is publicly traded on an established securities market, in the calendar year of his or her Separation from Service be made before the date that is six months after the date of the Participant’s Separation from Service, unless such Separation from Service is due to death or Disability.
|
(a)
|
Pre-2005 Account
. Upon a finding that a Participant has suffered an Unforeseeable Emergency, the Plan Administrator may, in its sole discretion, make distributions from the Participant’s Pre‑2005 Account. The amount of such a distribution shall be limited to the amount reasonably necessary to meet the Participant’s needs resulting from the Unforeseeable Emergency.
|
(b)
|
Post-2004 Account
. Upon a finding that a Participant has suffered an Unforeseeable Emergency, the Plan Administrator may, in its sole discretion, make distributions from the Participant's Post-2004 Account and/or suspend Employer credits entirely in accordance with the guidance under Code Section 409A. The amount of such distribution shall be limited to the amount necessary to satisfy such Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant's assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). Any distribution pursuant to this Subsection shall be payable in a lump sum. The distribution shall be paid within 30 days after the determination of an Unforeseeable Emergency.
|
(a)
|
the specific reason or reasons for denial of the claim;
|
(b)
|
a specific reference to the pertinent Plan provisions upon which the denial is based;
|
(c)
|
a description of any additional material or information necessary for the claimant to perfect the claim, together with an explanation of why such material or information is necessary; and
|
(d)
|
an explanation of the Plan’s review procedure.
|
(a)
|
Limitation of Liability
. Notwithstanding any other provision of the Plan or any trust established under the Plan, none of the Company, any other Employer, any member of the Benefits Committee or the ONC Committee, nor any individual acting as an employee, or agent or delegate of any of them, shall be liable to any Participant, former Participant, Beneficiary, or any other person for any claim, loss, liability or expense incurred in connection with the Plan or any trust established under the Plan, except when the same shall have been judicially determined to be due to the willful misconduct of such person.
|
(b)
|
Indemnity
. The Company shall indemnify and hold harmless each member of the Benefits Committee and the ONC Committee, or any employee of the Company or any individual acting as an employee or agent of either of them (to the extent not indemnified or saved harmless under any liability insurance or any other indemnification arrangement with respect to the Plan or any trust established under the Plan) from any and all claims, losses, liabilities, costs and expenses (including attorneys’ fees) arising out of any actual or alleged act or failure to act made in good faith pursuant to the provisions of the Plan, including expenses reasonably incurred in the defense of any claim relating thereto with respect to the administration of the Plan or any trust established under the Plan, except that no indemnification or defense shall be provided to any person with respect to any conduct that has been judicially determined, or agreed by the parties, to have constituted willful misconduct on the part of such person, or to have resulted in his or her receipt of personal profit or advantage to which he or she is not entitled. In connection with the indemnification provided by the preceding sentence, expenses incurred in defending a civil or criminal action, suit or proceeding, or incurred in connection with a civil or criminal investigation, may be paid by the Company in advance of the final disposition of such action, suit, proceeding, or investigation, as authorized by the Benefits Committee or the ONC Committee in the specific case, upon receipt of an undertaking by or on behalf of the party to be indemnified to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Company pursuant to this paragraph.
|
(a)
|
It is intended that the Plan comply with the provisions of Code Section 409A of the Code, so as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise actually be paid or made available to Participants or Beneficiaries. This Plan shall be construed, administered, and governed in a manner that affects such intent, and neither any Participant, Beneficiary, nor Plan Administrator shall not take any action that would be inconsistent with such intent.
|
(b)
|
Although the Plan Administrator shall use its best efforts to avoid the imposition of taxation, interest and penalties under Code Section 409A, the tax treatment of deferrals under this Plan is not warranted or guaranteed. Neither the Company, the other Affiliates, the Plan Administrator, the Retirement Committee, nor any designee shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant, Beneficiary or other taxpayer as a result of the Plan.
|
(c)
|
Notwithstanding anything to the contrary contained herein, (1) in the event that the Internal Revenue Service prevails in its claim that any amount of a Pre-2005 Account, payable pursuant to the Plan and held in the general assets of the Company or any other Employer, constitutes taxable income to a Participant or his or her Beneficiary for a taxable year prior to the taxable year in which such amount is distributed to him or her, or (2) in the event that legal counsel satisfactory to the Company, and the applicable Participant or his or her Beneficiary, renders an opinion that the Internal Revenue Service would likely prevail in such a claim, the amount of such Pre-2005 Account held in the general assets of the Company or any other Employer, to the extent constituting taxable income, shall be immediately distributed to the Participant or his or her Beneficiary. For purposes of this Section, the Internal Revenue Service shall be deemed to have prevailed in a claim if such claim is upheld by a court of final jurisdiction, or if the Participant or Beneficiary, based upon an opinion of legal counsel satisfactory to the Company and the Participant or his or her Beneficiary, fails to appeal a decision of the Internal Revenue Service, or a court of applicable jurisdiction, with respect to such claim, to an appropriate Internal Revenue Service appeals authority or to a court of higher jurisdiction within the appropriate time period.
|
(d)
|
Notwithstanding anything to the contrary contained herein, (1) in the event that the Internal Revenue Service prevails in its claim that any amount of a Post-2004 Account, payable pursuant to the Plan and held in the general assets of the Company or any other Employer, constitutes taxable income
|
1.
|
I have reviewed this Quarterly Report of NiSource Inc. on Form 10-Q for the quarter ended
September 30, 2018
;
|
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:
|
November 1, 2018
|
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
September 30, 2018
;
|
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:
|
November 1, 2018
|
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
|
|
|
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Date:
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November 1, 2018
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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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November 1, 2018
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