Delaware
|
|
35-2108964
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
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|
|
801 East 86th Avenue
Merrillville, Indiana
|
|
46410
|
(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
|
OTHER INFORMATION
|
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Item 1.
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||
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Item 1A.
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||
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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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||
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DEFINED TERMS
|
|
The following is a list of frequently used abbreviations or acronyms that are found in this report:
|
|
|
|
NiSource Subsidiaries, Affiliates and Former Subsidiaries
|
|
Columbia of Kentucky
|
Columbia Gas of Kentucky, Inc.
|
Columbia of Maryland
|
Columbia Gas of Maryland, Inc.
|
Columbia of Massachusetts
|
Bay State Gas Company
|
Columbia of Ohio
|
Columbia Gas of Ohio, Inc.
|
Columbia of Pennsylvania
|
Columbia Gas of Pennsylvania, Inc.
|
Columbia of Virginia
|
Columbia Gas of Virginia, Inc.
|
NIPSCO
|
Northern Indiana Public Service Company LLC
|
NiSource ("we," "us" or “our”)
|
NiSource Inc.
|
|
|
Abbreviations and Other
|
|
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
|
BTA
|
Build-transfer agreement
|
CAA
|
Clean Air Act
|
CCRs
|
Coal Combustion Residuals
|
CEP
|
Capital Expenditure Program
|
CERCLA
|
Comprehensive Environmental Response Compensation and Liability Act (also known as Superfund)
|
CO2
|
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
|
FMCA
|
Federally Mandated Cost Adjustment
|
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
|
IT
|
Information technology
|
IURC
|
Indiana Utility Regulatory Commission
|
DEFINED TERMS
|
|
LIBOR
|
London InterBank Offered Rate
|
LIFO
|
Last In, First Out
|
MGP
|
Manufactured Gas Plant
|
MISO
|
Midcontinent Independent System Operator
|
MMDth
|
Million dekatherms
|
MW
|
Megawatts
|
NTSB
|
National Transportation Safety Board
|
NYMEX
|
New York Mercantile Exchange
|
OPEB
|
Other Postretirement Benefits
|
PHMSA
|
Pipeline and Hazardous Materials Safety Administration
|
PPA
|
Purchase power agreement
|
RCRA
|
Resource Conservation and Recovery Act
|
ROU
|
Right of use
|
SAVE
|
Steps to Advance Virginia's Energy Plan
|
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
|
VSCC
|
Virginia State Corporation Commission
|
WCE
|
Whiting Clean Energy
|
Index
|
Page
|
|
Three Months Ended
March 31, |
||||||
(in millions, except per share amounts)
|
2019
|
|
2018
|
||||
Operating Revenues
|
|
|
|||||
Customer revenues
|
$
|
1,834.5
|
|
|
$
|
1,717.2
|
|
Other revenues
|
35.3
|
|
|
33.6
|
|
||
Total Operating Revenues
|
1,869.8
|
|
|
1,750.8
|
|
||
Operating Expenses
|
|
|
|
||||
Cost of sales (excluding depreciation and amortization)
|
680.3
|
|
|
724.4
|
|
||
Operation and maintenance
|
552.4
|
|
|
402.5
|
|
||
Depreciation and amortization
|
175.1
|
|
|
144.7
|
|
||
Loss (Gain) on sale of assets and impairments, net
|
0.2
|
|
|
(0.3
|
)
|
||
Other taxes
|
87.6
|
|
|
78.9
|
|
||
Total Operating Expenses
|
1,495.6
|
|
|
1,350.2
|
|
||
Operating Income
|
374.2
|
|
|
400.6
|
|
||
Other Income (Deductions)
|
|
|
|
||||
Interest expense, net
|
(95.6
|
)
|
|
(93.1
|
)
|
||
Other, net
|
(0.7
|
)
|
|
31.3
|
|
||
Total Other Deductions, Net
|
(96.3
|
)
|
|
(61.8
|
)
|
||
Income before Income Taxes
|
277.9
|
|
|
338.8
|
|
||
Income Taxes
|
59.0
|
|
|
62.7
|
|
||
Net Income
|
218.9
|
|
|
276.1
|
|
||
Preferred dividends
|
(13.8
|
)
|
|
—
|
|
||
Net Income Available to Common Shareholders
|
205.1
|
|
|
276.1
|
|
||
Earnings Per Share
|
|
|
|
||||
Basic Earnings Per Share
|
$
|
0.55
|
|
|
$
|
0.82
|
|
Diluted Earnings Per Share
|
$
|
0.55
|
|
|
$
|
0.81
|
|
Basic Average Common Shares Outstanding
|
373.4
|
|
|
338.0
|
|
||
Diluted Average Common Shares
|
374.7
|
|
|
339.0
|
|
|
Three Months Ended
March 31, |
||||||
(in millions, net of taxes)
|
2019
|
|
2018
|
||||
Net Income
|
$
|
218.9
|
|
|
$
|
276.1
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Net unrealized gain (loss) on available-for-sale securities(1)
|
2.8
|
|
|
(1.7
|
)
|
||
Net unrealized gain (loss) on cash flow hedges(2)
|
(19.3
|
)
|
|
35.4
|
|
||
Unrecognized pension and OPEB benefit(3)
|
0.9
|
|
|
0.2
|
|
||
Total other comprehensive income (loss)
|
(15.6
|
)
|
|
33.9
|
|
||
Comprehensive Income
|
$
|
203.3
|
|
|
$
|
310.0
|
|
NiSource Inc.
Condensed Consolidated Balance Sheets (unaudited)
|
|||||||
(in millions)
|
March 31,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Property, Plant and Equipment
|
|
|
|
||||
Utility plant
|
$
|
23,079.7
|
|
|
$
|
22,780.8
|
|
Accumulated depreciation and amortization
|
(7,356.9
|
)
|
|
(7,257.9
|
)
|
||
Net utility plant
|
15,722.8
|
|
|
15,522.9
|
|
||
Other property, at cost, less accumulated depreciation
|
18.6
|
|
|
19.6
|
|
||
Net Property, Plant and Equipment
|
15,741.4
|
|
|
15,542.5
|
|
||
Investments and Other Assets
|
|
|
|
||||
Unconsolidated affiliates
|
2.1
|
|
|
2.1
|
|
||
Other investments
|
208.5
|
|
|
204.0
|
|
||
Total Investments and Other Assets
|
210.6
|
|
|
206.1
|
|
||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
151.0
|
|
|
112.8
|
|
||
Restricted cash
|
9.8
|
|
|
8.3
|
|
||
Accounts receivable (less reserve of $31.4 and $21.1, respectively)
|
1,132.1
|
|
|
1,058.5
|
|
||
Gas inventory
|
75.1
|
|
|
286.8
|
|
||
Materials and supplies, at average cost
|
107.3
|
|
|
101.0
|
|
||
Electric production fuel, at average cost
|
33.3
|
|
|
34.7
|
|
||
Exchange gas receivable
|
72.1
|
|
|
88.4
|
|
||
Regulatory assets
|
190.9
|
|
|
235.4
|
|
||
Prepayments and other
|
144.2
|
|
|
129.5
|
|
||
Total Current Assets
|
1,915.8
|
|
|
2,055.4
|
|
||
Other Assets
|
|
|
|
||||
Regulatory assets
|
1,979.4
|
|
|
2,002.1
|
|
||
Goodwill
|
1,690.7
|
|
|
1,690.7
|
|
||
Intangible assets, net
|
218.0
|
|
|
220.7
|
|
||
Deferred charges and other
|
134.0
|
|
|
86.5
|
|
||
Total Other Assets
|
4,022.1
|
|
|
4,000.0
|
|
||
Total Assets
|
$
|
21,889.9
|
|
|
$
|
21,804.0
|
|
NiSource Inc.
Condensed Consolidated Balance Sheets (unaudited) (continued)
|
|||||||
(in millions, except share amounts)
|
March 31,
2019 |
|
December 31,
2018 |
||||
CAPITALIZATION AND LIABILITIES
|
|
|
|
||||
Capitalization
|
|
|
|
||||
Stockholders’ Equity
|
|
|
|
||||
Common stock - $0.01 par value, 400,000,000 shares authorized; 373,002,671 and 372,363,656 shares outstanding, respectively
|
$
|
3.8
|
|
|
$
|
3.8
|
|
Preferred stock - $0.01 par value, 20,000,000 shares authorized; 440,000 shares outstanding
|
880.0
|
|
|
880.0
|
|
||
Treasury stock
|
(99.9
|
)
|
|
(99.9
|
)
|
||
Additional paid-in capital
|
6,406.5
|
|
|
6,403.5
|
|
||
Retained deficit
|
(1,358.0
|
)
|
|
(1,399.3
|
)
|
||
Accumulated other comprehensive loss
|
(52.8
|
)
|
|
(37.2
|
)
|
||
Total Stockholders’ Equity
|
5,779.6
|
|
|
5,750.9
|
|
||
Long-term debt, excluding amounts due within one year
|
7,110.1
|
|
|
7,105.4
|
|
||
Total Capitalization
|
12,889.7
|
|
|
12,856.3
|
|
||
Current Liabilities
|
|
|
|
||||
Current portion of long-term debt
|
51.4
|
|
|
50.0
|
|
||
Short-term borrowings
|
2,080.0
|
|
|
1,977.2
|
|
||
Accounts payable
|
675.2
|
|
|
883.8
|
|
||
Dividends payable - common stock
|
74.6
|
|
|
—
|
|
||
Dividends payable - preferred stock
|
19.4
|
|
|
—
|
|
||
Customer deposits and credits
|
152.6
|
|
|
238.9
|
|
||
Taxes accrued
|
232.8
|
|
|
222.7
|
|
||
Interest accrued
|
93.7
|
|
|
90.7
|
|
||
Exchange gas payable
|
15.5
|
|
|
85.5
|
|
||
Regulatory liabilities
|
152.1
|
|
|
140.9
|
|
||
Legal and environmental
|
18.9
|
|
|
18.9
|
|
||
Accrued compensation and employee benefits
|
111.0
|
|
|
149.7
|
|
||
Claims accrued
|
258.5
|
|
|
114.7
|
|
||
Other accruals
|
79.5
|
|
|
63.8
|
|
||
Total Current Liabilities
|
4,015.2
|
|
|
4,036.8
|
|
||
Other Liabilities
|
|
|
|
||||
Risk management liabilities
|
55.8
|
|
|
46.7
|
|
||
Deferred income taxes
|
1,391.6
|
|
|
1,330.5
|
|
||
Deferred investment tax credits
|
10.8
|
|
|
11.2
|
|
||
Accrued insurance liabilities
|
84.5
|
|
|
84.4
|
|
||
Accrued liability for postretirement and postemployment benefits
|
377.3
|
|
|
389.1
|
|
||
Regulatory liabilities
|
2,488.3
|
|
|
2,519.1
|
|
||
Asset retirement obligations
|
358.4
|
|
|
352.0
|
|
||
Other noncurrent liabilities
|
218.3
|
|
|
177.9
|
|
||
Total Other Liabilities
|
4,985.0
|
|
|
4,910.9
|
|
||
Commitments and Contingencies (Refer to Note 17, "Other Commitments and Contingencies")
|
—
|
|
|
—
|
|
||
Total Capitalization and Liabilities
|
$
|
21,889.9
|
|
|
$
|
21,804.0
|
|
NiSource Inc.
Condensed Statements of Consolidated Cash Flows (unaudited)
|
|||||||
Three Months Ended March 31, (in millions)
|
2019
|
|
2018
|
||||
Operating Activities
|
|
|
|
||||
Net Income
|
$
|
218.9
|
|
|
$
|
276.1
|
|
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
|
|
|
|
||||
Depreciation and amortization
|
175.1
|
|
|
144.7
|
|
||
Deferred income taxes and investment tax credits
|
51.6
|
|
|
56.8
|
|
||
Other adjustments
|
6.5
|
|
|
(15.6
|
)
|
||
Changes in Assets and Liabilities:
|
|
|
|
||||
Components of working capital
|
(27.2
|
)
|
|
(178.4
|
)
|
||
Regulatory assets/liabilities
|
0.4
|
|
|
117.1
|
|
||
Deferred charges and other noncurrent assets
|
(58.3
|
)
|
|
1.9
|
|
||
Other noncurrent liabilities
|
32.1
|
|
|
(14.4
|
)
|
||
Net Cash Flows from Operating Activities
|
399.1
|
|
|
388.2
|
|
||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(353.7
|
)
|
|
(370.0
|
)
|
||
Cost of removal
|
(25.3
|
)
|
|
(19.0
|
)
|
||
Other investing activities
|
3.6
|
|
|
(9.9
|
)
|
||
Net Cash Flows used for Investing Activities
|
(375.4
|
)
|
|
(398.9
|
)
|
||
Financing Activities
|
|
|
|
||||
Repayments of long-term debt and capital lease obligations
|
(2.3
|
)
|
|
(279.0
|
)
|
||
Premiums and other debt related costs
|
(4.0
|
)
|
|
—
|
|
||
Repayment of short-term debt (maturity > 90 days)
|
(350.0
|
)
|
|
—
|
|
||
Change in short-term borrowings, net (maturity ≤ 90 days)
|
452.8
|
|
|
361.6
|
|
||
Issuance of common stock
|
3.1
|
|
|
3.7
|
|
||
Acquisition of treasury stock
|
—
|
|
|
(3.6
|
)
|
||
Dividends paid - common stock
|
(74.5
|
)
|
|
(65.7
|
)
|
||
Dividends paid - preferred stock
|
(9.1
|
)
|
|
—
|
|
||
Net Cash Flows from Financing Activities
|
16.0
|
|
|
17.0
|
|
||
Change in cash, cash equivalents and restricted cash
|
39.7
|
|
|
6.3
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
121.1
|
|
|
38.4
|
|
||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
$
|
160.8
|
|
|
$
|
44.7
|
|
Three Months Ended March 31, (in millions)
|
2019
|
|
2018
|
||||
Non-cash transactions:
|
|
|
|
||||
Capital expenditures included in current liabilities
|
$
|
123.7
|
|
|
$
|
145.4
|
|
Dividends declared but not paid
|
94.0
|
|
|
65.8
|
|
||
Reclassification of other property to regulatory assets
|
—
|
|
|
142.3
|
|
(in millions)
|
Common
Stock
|
|
Preferred Stock(1)
|
|
Treasury
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
||||||||||||||
Balance as of January 1, 2019
|
$
|
3.8
|
|
|
$
|
880.0
|
|
|
$
|
(99.9
|
)
|
|
$
|
6,403.5
|
|
|
$
|
(1,399.3
|
)
|
|
$
|
(37.2
|
)
|
|
$
|
5,750.9
|
|
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
218.9
|
|
|
—
|
|
|
218.9
|
|
|||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.6
|
)
|
|
(15.6
|
)
|
|||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Common stock ($0.40 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(149.1
|
)
|
|
—
|
|
|
(149.1
|
)
|
|||||||
Preferred stock (See Note 5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28.5
|
)
|
|
—
|
|
|
(28.5
|
)
|
|||||||
Stock issuances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Employee stock purchase plan
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|||||||
Long-term incentive plan
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|||||||
401(k) and profit sharing
|
—
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|||||||
Balance as of March 31, 2019
|
$
|
3.8
|
|
|
$
|
880.0
|
|
|
$
|
(99.9
|
)
|
|
$
|
6,406.5
|
|
|
$
|
(1,358.0
|
)
|
|
$
|
(52.8
|
)
|
|
$
|
5,779.6
|
|
(in millions)
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Deficit
|
|
Accumulated
Other
Comprehensive
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 Income
|
—
|
|
|
—
|
|
|
—
|
|
|
276.1
|
|
|
—
|
|
|
276.1
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33.9
|
|
|
33.9
|
|
||||||
Common stock dividends ($0.39 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(131.7
|
)
|
|
—
|
|
|
(131.7
|
)
|
||||||
Treasury stock acquired
|
—
|
|
|
(3.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.6
|
)
|
||||||
Cumulative effect of change in accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
9.5
|
|
|
(9.5
|
)
|
|
—
|
|
||||||
Stock issuances:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee stock purchase plan
|
—
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
||||||
Long-term incentive plan
|
—
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
||||||
401(k) and profit sharing
|
—
|
|
|
—
|
|
|
6.2
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
||||||
Balance as of March 31, 2018
|
$
|
3.4
|
|
|
$
|
(99.5
|
)
|
|
$
|
5,540.5
|
|
|
$
|
(919.2
|
)
|
|
$
|
(19.0
|
)
|
|
$
|
4,506.2
|
|
|
Preferred
|
|
Common
|
||||||||
Shares (in thousands)
|
Shares
|
|
Shares
|
|
Treasury
|
|
Outstanding
|
||||
Balance as of January 1, 2019
|
420
|
|
|
376,326
|
|
|
(3,963
|
)
|
|
372,363
|
|
Issued:
|
|
|
|
|
|
|
|
||||
Preferred stock
|
20
|
|
|
|
|
|
|
|
|||
Employee stock purchase plan
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
Long-term incentive plan
|
—
|
|
|
426
|
|
|
—
|
|
|
426
|
|
401(k) and profit sharing
|
—
|
|
|
164
|
|
|
—
|
|
|
164
|
|
Balance as of March 31, 2019
|
440
|
|
|
376,966
|
|
|
(3,963
|
)
|
|
373,003
|
|
|
Common
|
|||||||
Shares (in thousands)
|
Shares
|
|
Treasury
|
|
Outstanding
|
|||
Balance as of January 1, 2018
|
340,813
|
|
|
(3,797
|
)
|
|
337,016
|
|
Treasury Stock acquired
|
|
|
(149
|
)
|
|
(149
|
)
|
|
Issued:
|
|
|
|
|
|
|||
Employee stock purchase plan
|
47
|
|
|
—
|
|
|
47
|
|
Long-term incentive plan
|
420
|
|
|
—
|
|
|
420
|
|
401(k) and profit sharing
|
264
|
|
|
—
|
|
|
264
|
|
Balance as of March 31, 2018
|
341,544
|
|
|
(3,946
|
)
|
|
337,598
|
|
Standard
|
Description
|
Effective Date
|
Effect on the financial statements or other significant matters
|
ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments
|
The pronouncement clarifies and improves certain areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement. Topics 1, 2, and 5 of this update amends ASU 2016-13 as it relates to accrued interest, transfers between investment classifications, expected recoveries and reinsurance recoverables. Topic 3 improves guidance related to fair value hedges. Topic 4 of this update relates to codification improvements to ASU 2016-01.
|
Annual period ending after December 15, 2019, including interim periods therein. Early adoption is permitted.
|
We are currently evaluating the impact of codification improvements under Topics 1, 2, and 5 of this pronouncement, if any, on our Condensed Consolidated Financial Statements (unaudited) and Notes to Condensed Consolidated Financial Statements (unaudited). Topics 3 and 4 of this ASU are not material to us. We expect to adopt this ASU on its effective date.
|
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). We expect to adopt this ASU on its effective date.
|
Standard
|
Description
|
Effective Date
|
Effect on the financial statements or other significant matters
|
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 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 also have recorded balances for trade receivables that fall within the scope of the standard. 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). We expect to adopt this ASU on its effective date.
|
Standard
|
Adoption
|
ASU 2019-01, Leases (Topic 842): Codification Improvements
|
See Note 16, "Leases," for our discussion of the effects of implementing these standards.
|
ASU 2018-11, Leases (Topic 842): Targeted Improvements
|
|
ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842
|
|
ASU 2016-02, Leases (Topic 842)
|
Three Months Ended March 31, 2019 (in millions)
|
Gas Distribution Operations
|
|
Electric Operations
|
|
Corporate and Other
|
|
Total
|
||||||||
Customer Revenues(1)
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
975.3
|
|
|
$
|
118.8
|
|
|
$
|
—
|
|
|
$
|
1,094.1
|
|
Commercial
|
330.5
|
|
|
119.3
|
|
|
—
|
|
|
449.8
|
|
||||
Industrial
|
82.9
|
|
|
163.3
|
|
|
—
|
|
|
246.2
|
|
||||
Off-system
|
20.1
|
|
|
—
|
|
|
—
|
|
|
20.1
|
|
||||
Miscellaneous
|
17.2
|
|
|
6.9
|
|
|
0.2
|
|
|
24.3
|
|
||||
Total Customer Revenues
|
$
|
1,426.0
|
|
|
$
|
408.3
|
|
|
$
|
0.2
|
|
|
$
|
1,834.5
|
|
Other Revenues
|
12.8
|
|
|
22.5
|
|
|
—
|
|
|
35.3
|
|
||||
Total Operating Revenues
|
$
|
1,438.8
|
|
|
$
|
430.8
|
|
|
$
|
0.2
|
|
|
$
|
1,869.8
|
|
Three Months Ended March 31, 2018 (in millions)
|
Gas Distribution Operations
|
|
Electric Operations
|
|
Corporate and Other
|
|
Total
|
||||||||
Customer Revenues(1)
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
893.6
|
|
|
$
|
114.5
|
|
|
$
|
—
|
|
|
$
|
1,008.1
|
|
Commercial
|
308.3
|
|
|
116.9
|
|
|
—
|
|
|
425.2
|
|
||||
Industrial
|
74.6
|
|
|
162.5
|
|
|
—
|
|
|
237.1
|
|
||||
Off-system
|
22.3
|
|
|
—
|
|
|
—
|
|
|
22.3
|
|
||||
Miscellaneous
|
16.8
|
|
|
7.5
|
|
|
0.2
|
|
|
24.5
|
|
||||
Total Customer Revenues
|
$
|
1,315.6
|
|
|
$
|
401.4
|
|
|
$
|
0.2
|
|
|
$
|
1,717.2
|
|
Other Revenues
|
11.7
|
|
|
21.9
|
|
|
—
|
|
|
33.6
|
|
||||
Total Operating Revenues
|
$
|
1,327.3
|
|
|
$
|
423.3
|
|
|
$
|
0.2
|
|
|
$
|
1,750.8
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Customer Accounts Receivable, Billed (less reserve)
|
|
Customer Accounts Receivable, Unbilled (less reserve)
|
||||
Balance as of December 31, 2018
|
$
|
540.5
|
|
|
$
|
349.1
|
|
Balance as of March 31, 2019
|
692.2
|
|
|
284.6
|
|
||
Increase (Decrease)
|
$
|
151.7
|
|
|
$
|
(64.5
|
)
|
|
Three Months Ended
|
||||
|
March 31,
|
||||
(in thousands)
|
2019
|
|
2018
|
||
Denominator
|
|
|
|
||
Basic average common shares outstanding
|
373,356
|
|
|
338,012
|
|
Dilutive potential common shares:
|
|
|
|
||
Shares contingently issuable under employee stock plans
|
1,062
|
|
|
715
|
|
Shares restricted under employee stock plans
|
133
|
|
|
264
|
|
Forward Agreements
|
105
|
|
|
—
|
|
Diluted Average Common Shares
|
374,656
|
|
|
338,991
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
||||||
Company
|
Program
|
Incremental Revenue
|
Incremental Capital Investment
|
Investment Period
|
Filed
|
Status
|
Rates
Effective
|
||||
Columbia of Ohio
|
IRP - 2018(1)
|
$
|
(1.6
|
)
|
$
|
207.3
|
|
1/17-12/17
|
February 27, 2018
|
Approved
April 25, 2018 |
May 2018
|
Columbia of Ohio
|
IRP - 2019(1)
|
18.2
|
|
199.6
|
|
1/18-12/18
|
February 28, 2019
|
Approved
April 24, 2019 |
May 2019
|
||
Columbia of Ohio
|
CEP - 2018(1)
|
74.5
|
|
659.9
|
|
1/11-12/17
|
December 1, 2017
|
Approved
November 28, 2018 |
December 2018
|
||
Columbia of Ohio
|
CEP - 2019
|
16.1
|
|
122.1
|
|
1/18-12/18
|
February 28, 2019
|
Order Expected
August 2019 |
September 2019
|
||
NIPSCO - Gas
|
TDSIC 9(1)(2)
|
(10.6
|
)
|
54.4
|
|
1/18 - 6/18
|
August 28, 2018
|
Approved
December 27, 2018 |
January 2019
|
||
NIPSCO - Gas
|
FMCA 1(3)
|
9.9
|
|
1.5
|
|
11/17-9/18
|
November 30, 2018
|
Approved
March 27, 2019 |
April 2019
|
||
Columbia of Massachusetts
|
GSEP - 2019
|
10.7
|
|
64.0
|
|
1/19-12/19
|
October 31, 2018
|
Approved
April 30, 2019 |
May 2019
|
||
Columbia of Virginia
|
SAVE - 2019
|
2.4
|
|
36.0
|
|
1/19-12/19
|
August 17, 2018
|
Approved
October 26, 2018 |
January 2019
|
||
Columbia of Kentucky
|
AMRP - 2019
|
3.6
|
|
30.1
|
|
1/19-12/19
|
October 15, 2018
|
Approved
December 5, 2018 |
January 2019
|
||
Columbia of Maryland
|
STRIDE - 2019
|
1.2
|
|
15.9
|
|
1/19-12/19
|
November 1, 2018
|
Approved
December 12, 2018 |
January 2019
|
||
NIPSCO - Electric
|
TDSIC - 4(1)
|
(11.8
|
)
|
72.2
|
|
12/17-5/18
|
July 31, 2018
|
Approved
November 28, 2018 |
December 2018
|
||
NIPSCO - Electric
|
TDSIC - 5(1)
|
15.9
|
|
58.8
|
|
6/18-11/18
|
January 29, 2019
|
Order Expected
Q2 2019 |
June 2019
|
||
NIPSCO - Electric
|
ECRM - 32
|
1.0
|
|
—
|
|
1/18-6/18
|
July 31, 2018
|
Approved
October 31, 2018 |
November 2018
|
||
NIPSCO - Electric
|
FMCA - 9(3)
|
4.1
|
|
90.2
|
|
10/17-3/18
|
April 27, 2018
|
Approved
July 25, 2018 |
August 2018
|
||
NIPSCO - Electric
|
FMCA - 10(3)
|
2.2
|
|
45.7
|
|
4/18-8/18
|
October 18, 2018
|
Approved
January 29, 2019 |
February 2019
|
||
NIPSCO - Electric
|
FMCA - 11(3)
|
0.9
|
|
22.4
|
|
9/18-2/19
|
April 17, 2019
|
Order Expected
July, 2019 |
August 2019
|
(in millions)
|
|
|
|
|
|||||
Company
|
Requested Incremental Revenue
|
Approved or Settled Incremental Revenue
|
Filed
|
Status
|
Rates
Effective
|
||||
NIPSCO - Gas(1)
|
$
|
138.1
|
|
$
|
107.3
|
|
September 27, 2017
|
Approved
September 19, 2018 |
October 2018
|
Columbia of Virginia(2)
|
$
|
14.2
|
|
$
|
1.3
|
|
August 28, 2018
|
Settlement filed
April 19, 2019, Order expected Second half of 2019 |
February 2019
|
NIPSCO - Electric(3)
|
$
|
21.4
|
|
$
|
(45.0
|
)
|
October 31, 2018
|
Partial settlement filed
April 26, 2019, Order expected Second half of 2019 |
Second half of 2019
|
(in millions)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Risk Management Assets - Current(1)
|
|
|
|
||||
Interest rate risk programs
|
$
|
5.6
|
|
|
$
|
—
|
|
Commodity price risk programs
|
0.9
|
|
|
1.1
|
|
||
Total
|
$
|
6.5
|
|
|
$
|
1.1
|
|
Risk Management Assets - Noncurrent(2)
|
|
|
|
||||
Interest rate risk programs
|
$
|
—
|
|
|
$
|
18.5
|
|
Commodity price risk programs
|
6.9
|
|
|
4.4
|
|
||
Total
|
$
|
6.9
|
|
|
$
|
22.9
|
|
Risk Management Liabilities - Current(3)
|
|
|
|
||||
Interest rate risk programs
|
$
|
—
|
|
|
$
|
—
|
|
Commodity price risk programs
|
4.4
|
|
|
5.0
|
|
||
Total
|
$
|
4.4
|
|
|
$
|
5.0
|
|
Risk Management Liabilities - Noncurrent
|
|
|
|
||||
Interest rate risk programs
|
$
|
22.4
|
|
|
$
|
9.5
|
|
Commodity price risk programs
|
33.4
|
|
|
37.2
|
|
||
Total
|
$
|
55.8
|
|
|
$
|
46.7
|
|
Recurring Fair Value Measurements
March 31, 2019 (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 March 31, 2019
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Risk management assets
|
$
|
—
|
|
|
$
|
13.4
|
|
|
$
|
—
|
|
|
$
|
13.4
|
|
Available-for-sale securities
|
—
|
|
|
138.2
|
|
|
—
|
|
|
138.2
|
|
||||
Total
|
$
|
—
|
|
|
$
|
151.6
|
|
|
$
|
—
|
|
|
$
|
151.6
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Risk management liabilities
|
$
|
—
|
|
|
$
|
60.2
|
|
|
$
|
—
|
|
|
$
|
60.2
|
|
Total
|
$
|
—
|
|
|
$
|
60.2
|
|
|
$
|
—
|
|
|
$
|
60.2
|
|
Recurring Fair Value Measurements
December 31, 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
December 31, 2018
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Risk management assets
|
$
|
—
|
|
|
$
|
24.0
|
|
|
$
|
—
|
|
|
$
|
24.0
|
|
Available-for-sale securities
|
—
|
|
|
138.3
|
|
|
—
|
|
|
138.3
|
|
||||
Total
|
$
|
—
|
|
|
$
|
162.3
|
|
|
$
|
—
|
|
|
$
|
162.3
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Risk management liabilities
|
$
|
—
|
|
|
$
|
51.7
|
|
|
$
|
—
|
|
|
$
|
51.7
|
|
Total
|
$
|
—
|
|
|
$
|
51.7
|
|
|
$
|
—
|
|
|
$
|
51.7
|
|
March 31, 2019 (in millions)
|
Amortized
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair
Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury debt securities
|
$
|
22.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22.0
|
|
Corporate/Other debt securities
|
115.7
|
|
|
1.4
|
|
|
(0.9
|
)
|
|
116.2
|
|
||||
Total
|
$
|
137.7
|
|
|
$
|
1.4
|
|
|
$
|
(0.9
|
)
|
|
$
|
138.2
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018 (in millions)
|
Amortized
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair
Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury debt securities
|
$
|
23.6
|
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
23.6
|
|
Corporate/Other debt securities
|
117.7
|
|
|
0.4
|
|
|
(3.4
|
)
|
|
114.7
|
|
||||
Total
|
$
|
141.3
|
|
|
$
|
0.5
|
|
|
$
|
(3.5
|
)
|
|
$
|
138.3
|
|
(in millions)
|
Carrying
Amount as of March 31, 2019 |
|
Estimated Fair
Value as of March 31, 2019 |
|
Carrying
Amount as of
Dec. 31, 2018
|
|
Estimated Fair
Value as of
Dec. 31, 2018
|
||||||||
Long-term debt (including current portion)
|
$
|
7,161.5
|
|
|
$
|
7,533.6
|
|
|
$
|
7,155.4
|
|
|
$
|
7,228.3
|
|
(in millions)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Gross Receivables
|
$
|
742.7
|
|
|
$
|
694.4
|
|
Less: Receivables not transferred
|
242.7
|
|
|
295.2
|
|
||
Net receivables transferred
|
$
|
500.0
|
|
|
$
|
399.2
|
|
Short-term debt due to asset securitization
|
$
|
500.0
|
|
|
$
|
399.2
|
|
(in millions)
|
|
Gas Distribution Operations
|
|
Electric Operations
|
|
Corporate and Other
|
|
Total
|
||||||||
Goodwill
|
|
$
|
1,690.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,690.7
|
|
(in millions)
|
March 31,
2019 |
|
December 31,
2018 |
||||
Commercial paper weighted-average interest rate of 2.90% and 2.96% at March 31, 2019 and December 31, 2018, respectively
|
$
|
980.0
|
|
|
$
|
978.0
|
|
Accounts receivable securitization facility borrowings
|
500.0
|
|
|
399.2
|
|
||
Term loan weighted-average interest rate of 3.00% and 3.07% at March 31, 2019 and December 31, 2018, respectively
|
600.0
|
|
|
600.0
|
|
||
Total Short-Term Borrowings
|
$
|
2,080.0
|
|
|
$
|
1,977.2
|
|
Three Months Ended March 31, (in millions)
|
Balance Sheet Classification
|
2019
|
||
Assets
|
|
|
||
Finance leases
|
Net Property, Plant and Equipment
|
$
|
179.8
|
|
Operating leases
|
Deferred charges and other
|
53.8
|
|
|
Total leased assets
|
|
233.6
|
|
|
Liabilities
|
|
|
||
Current
|
|
|
||
Finance leases
|
Current portion of long-term debt
|
10.4
|
|
|
Operating leases
|
Other accruals
|
9.3
|
|
|
Noncurrent
|
|
|
||
Finance leases
|
Long-term debt, excluding amounts due within one year
|
188.5
|
|
|
Operating leases
|
Other noncurrent liabilities
|
44.5
|
|
|
Total lease liabilities
|
|
$
|
252.7
|
|
Three Months Ended March 31, (in millions)
|
2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows from finance leases
|
$
|
3.0
|
|
Operating cash flows from operating leases
|
3.7
|
|
|
Financing cash flows from finance leases
|
2.4
|
|
|
Right-of-use assets obtained in exchange for lease obligations
|
|
||
Finance leases
|
6.6
|
|
|
Operating leases
|
$
|
0.1
|
|
|
March 31, 2019
|
|
Weighted-average remaining lease term (years)
|
|
|
Finance leases
|
15.8
|
|
Operating leases
|
10.1
|
|
Weighted-average discount rate
|
|
|
Finance leases
|
5.8
|
%
|
Operating leases
|
4.4
|
%
|
As of March 31, 2019, (in millions)
|
Total
|
Finance Leases
|
Operating Leases
|
||||||
Year 1
|
$
|
35.5
|
|
$
|
24.0
|
|
$
|
11.5
|
|
Year 2
|
31.8
|
|
23.7
|
|
8.1
|
|
|||
Year 3
|
31.0
|
|
23.9
|
|
7.1
|
|
|||
Year 4
|
28.8
|
|
22.7
|
|
6.1
|
|
|||
Year 5
|
25.8
|
|
20.1
|
|
5.7
|
|
|||
Thereafter
|
246.7
|
|
217.7
|
|
29.0
|
|
|||
Total lease payments
|
399.6
|
|
332.1
|
|
67.5
|
|
|||
Less: Imputed interest
|
(125.2
|
)
|
(111.5
|
)
|
(13.7
|
)
|
|||
Less: Leases not yet commenced(1)
|
(21.7
|
)
|
(21.7
|
)
|
—
|
|
|||
Total
|
252.7
|
|
198.9
|
|
53.8
|
|
|||
Reported as of March 31, 2019
|
|
|
|
||||||
Short-term lease liabilities
|
19.7
|
|
10.4
|
|
9.3
|
|
|||
Long-term lease liabilities
|
233.0
|
|
188.5
|
|
44.5
|
|
|||
Total lease liabilities
|
$
|
252.7
|
|
$
|
198.9
|
|
$
|
53.8
|
|
As of December 31, 2018, (in millions)
|
Total
|
Capital Leases(1)
|
Operating Leases(2)
|
||||||
2019
|
$
|
34.0
|
|
$
|
23.0
|
|
$
|
11.0
|
|
2020
|
29.8
|
|
22.5
|
|
7.3
|
|
|||
2021
|
28.7
|
|
22.6
|
|
6.1
|
|
|||
2022
|
26.3
|
|
22.1
|
|
4.2
|
|
|||
2023
|
22.6
|
|
19.8
|
|
2.8
|
|
|||
Thereafter
|
226.9
|
|
212.4
|
|
14.5
|
|
|||
Total lease payments
|
$
|
368.3
|
|
$
|
322.4
|
|
$
|
45.9
|
|
|
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, 2019
|
$
|
(2.4
|
)
|
|
$
|
(13.0
|
)
|
|
$
|
(21.8
|
)
|
|
$
|
(37.2
|
)
|
Other comprehensive income (loss) before reclassifications
|
2.7
|
|
|
(19.3
|
)
|
|
0.5
|
|
|
(16.1
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
0.1
|
|
|
—
|
|
|
0.4
|
|
|
0.5
|
|
||||
Net current-period other comprehensive income (loss)
|
2.8
|
|
|
(19.3
|
)
|
|
0.9
|
|
|
(15.6
|
)
|
||||
Balance as of March 31, 2019
|
$
|
0.4
|
|
|
$
|
(32.3
|
)
|
|
$
|
(20.9
|
)
|
|
$
|
(52.8
|
)
|
|
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, 2018
|
$
|
0.2
|
|
|
$
|
(29.4
|
)
|
|
$
|
(14.2
|
)
|
|
$
|
(43.4
|
)
|
Other comprehensive income (loss) before reclassifications
|
(1.9
|
)
|
|
51.1
|
|
|
(0.6
|
)
|
|
48.6
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
0.2
|
|
|
(15.7
|
)
|
|
0.8
|
|
|
(14.7
|
)
|
||||
Net current-period other comprehensive income (loss)
|
(1.7
|
)
|
|
35.4
|
|
|
0.2
|
|
|
33.9
|
|
||||
Reclassification due to adoption of ASU 2018-02
|
—
|
|
|
(6.3
|
)
|
|
(3.2
|
)
|
|
(9.5
|
)
|
||||
Balance as of March 31, 2018
|
$
|
(1.5
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(17.2
|
)
|
|
$
|
(19.0
|
)
|
Three Months Ended March 31, (in millions)
|
2019
|
|
2018
|
||||
Interest Income
|
$
|
2.1
|
|
|
$
|
1.7
|
|
AFUDC Equity
|
1.7
|
|
|
3.7
|
|
||
Pension and other postretirement non-service cost
|
(2.8
|
)
|
|
6.2
|
|
||
Interest rate swap settlement gain
|
—
|
|
|
21.2
|
|
||
Miscellaneous
|
(1.7
|
)
|
|
(1.5
|
)
|
||
Total Other, net
|
$
|
(0.7
|
)
|
|
$
|
31.3
|
|
|
Three Months Ended
March 31, |
||||||
(in millions)
|
2019
|
|
2018
|
||||
Operating Revenues
|
|
|
|
||||
Gas Distribution Operations
|
|
|
|
||||
Unaffiliated
|
$
|
1,438.8
|
|
|
$
|
1,327.3
|
|
Intersegment
|
3.3
|
|
|
3.3
|
|
||
Total
|
1,442.1
|
|
|
1,330.6
|
|
||
Electric Operations
|
|
|
|
||||
Unaffiliated
|
430.8
|
|
|
423.3
|
|
||
Intersegment
|
0.2
|
|
|
0.2
|
|
||
Total
|
431.0
|
|
|
423.5
|
|
||
Corporate and Other
|
|
|
|
||||
Unaffiliated
|
0.2
|
|
|
0.2
|
|
||
Intersegment
|
111.1
|
|
|
114.1
|
|
||
Total
|
111.3
|
|
|
114.3
|
|
||
Eliminations
|
(114.6
|
)
|
|
(117.6
|
)
|
||
Consolidated Operating Revenues
|
$
|
1,869.8
|
|
|
$
|
1,750.8
|
|
Operating Income
|
|
|
|
||||
Gas Distribution Operations
|
$
|
275.4
|
|
|
$
|
321.7
|
|
Electric Operations
|
95.0
|
|
|
83.1
|
|
||
Corporate and Other
|
3.8
|
|
|
(4.2
|
)
|
||
Consolidated Operating Income
|
$
|
374.2
|
|
|
$
|
400.6
|
|
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 March 31,
|
||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019 vs. 2018
|
||||||
Operating Income
|
$
|
374.2
|
|
|
$
|
400.6
|
|
|
$
|
(26.4
|
)
|
|
Three Months Ended March 31,
|
||||||||||
(in millions, except per share amounts)
|
2019
|
|
2018
|
|
2019 vs. 2018
|
||||||
Operating Revenues
|
$
|
1,869.8
|
|
|
$
|
1,750.8
|
|
|
$
|
119.0
|
|
Cost of Sales (excluding depreciation and amortization)
|
680.3
|
|
|
724.4
|
|
|
(44.1
|
)
|
|||
Total Net Revenues
|
1,189.5
|
|
|
1,026.4
|
|
|
163.1
|
|
|||
Other Operating Expenses
|
815.3
|
|
|
625.8
|
|
|
189.5
|
|
|||
Operating Income
|
374.2
|
|
|
400.6
|
|
|
(26.4
|
)
|
|||
Total Other Deductions, net
|
(96.3
|
)
|
|
(61.8
|
)
|
|
(34.5
|
)
|
|||
Income Taxes
|
59.0
|
|
|
62.7
|
|
|
(3.7
|
)
|
|||
Net Income
|
218.9
|
|
|
276.1
|
|
|
(57.2
|
)
|
|||
Preferred dividends
|
(13.8
|
)
|
|
—
|
|
|
(13.8
|
)
|
|||
Net Income Available to Common Shareholders
|
205.1
|
|
|
276.1
|
|
|
(71.0
|
)
|
|||
Basic Earnings Per Share
|
$
|
0.55
|
|
|
$
|
0.82
|
|
|
$
|
(0.27
|
)
|
Basic Average Common Shares Outstanding
|
373.4
|
|
|
338.0
|
|
|
35.4
|
|
|
Three Months Ended March 31,
|
|||||||||
(in millions)
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|||||
Operating Income
|
$
|
275.4
|
|
|
321.7
|
|
|
$
|
(46.3
|
)
|
|
Three Months Ended March 31,
|
||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019 vs. 2018
|
||||||
Net Revenues
|
|
|
|
|
|
||||||
Operating Revenues
|
$
|
1,442.1
|
|
|
$
|
1,330.6
|
|
|
$
|
111.5
|
|
Less: Cost of sales (excluding depreciation and amortization)
|
550.1
|
|
|
591.8
|
|
|
(41.7
|
)
|
|||
Net Revenues
|
892.0
|
|
|
738.8
|
|
|
153.2
|
|
|||
Operating Expenses
|
|
|
|
|
|
||||||
Operation and maintenance
|
451.3
|
|
|
287.2
|
|
|
164.1
|
|
|||
Depreciation and amortization
|
97.4
|
|
|
70.7
|
|
|
26.7
|
|
|||
Other taxes
|
67.9
|
|
|
59.2
|
|
|
8.7
|
|
|||
Total Operating Expenses
|
616.6
|
|
|
417.1
|
|
|
199.5
|
|
|||
Operating Income
|
$
|
275.4
|
|
|
$
|
321.7
|
|
|
$
|
(46.3
|
)
|
Revenues
|
|
|
|
|
|
||||||
Residential
|
$
|
976.0
|
|
|
$
|
893.0
|
|
|
$
|
83.0
|
|
Commercial
|
331.6
|
|
|
308.9
|
|
|
22.7
|
|
|||
Industrial
|
83.0
|
|
|
74.7
|
|
|
8.3
|
|
|||
Off-System
|
20.1
|
|
|
22.3
|
|
|
(2.2
|
)
|
|||
Other
|
31.4
|
|
|
31.7
|
|
|
(0.3
|
)
|
|||
Total
|
$
|
1,442.1
|
|
|
$
|
1,330.6
|
|
|
$
|
111.5
|
|
Sales and Transportation (MMDth)
|
|
|
|
|
|
||||||
Residential
|
140.7
|
|
|
135.1
|
|
|
5.6
|
|
|||
Commercial
|
86.0
|
|
|
82.2
|
|
|
3.8
|
|
|||
Industrial
|
148.1
|
|
|
145.5
|
|
|
2.6
|
|
|||
Off-System
|
7.2
|
|
|
7.6
|
|
|
(0.4
|
)
|
|||
Other
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|||
Total
|
382.2
|
|
|
370.5
|
|
|
11.7
|
|
|||
Heating Degree Days
|
2,897
|
|
|
2,823
|
|
|
74
|
|
|||
Normal Heating Degree Days
|
2,864
|
|
|
2,892
|
|
|
(28
|
)
|
|||
% Colder (Warmer) than Normal
|
1
|
%
|
|
(2
|
)%
|
|
|
||||
Gas Distribution Customers
|
|
|
|
|
|
||||||
Residential
|
3,206,016
|
|
|
3,179,647
|
|
|
26,369
|
|
|||
Commercial
|
282,616
|
|
|
281,503
|
|
|
1,113
|
|
|||
Industrial
|
6,035
|
|
|
6,244
|
|
|
(209
|
)
|
|||
Other
|
3
|
|
|
5
|
|
|
(2
|
)
|
|||
Total
|
3,494,670
|
|
|
3,467,399
|
|
|
27,271
|
|
•
|
New rates from base rate proceedings and infrastructure replacement programs of $100.1 million.
|
•
|
Higher regulatory, tax and depreciation trackers, which are offset in operating expense, of $25.2 million.
|
•
|
Higher revenues of $5.1 million from the effects of colder weather in 2019 as well as a decrease in the weather-related normal heating degree day methodology resulting in an favorable variance of $4.7 million, as discussed below.
|
•
|
Increased customer growth and usage of $6.6 million.
|
•
|
Adjustments to the revenue reserve for the probable future refund of certain collections from customers as a result of the lower income tax rate from the TCJA of $6.1 million.
|
•
|
Expenses related to third-party claims and other costs following the Greater Lawrence Incident of $135.6 million, net of insurance recoveries recorded.
|
•
|
Increased depreciation of $26.7 million due to regulatory outcomes of NIPSCO's gas rate case and higher capital expenditures placed in service.
|
•
|
Higher regulatory, tax and depreciation trackers, which are offset in net revenues, of $25.2 million.
|
•
|
Increased property taxes of $5.9 million due to higher capital expenditures placed in service and increased amortization of property taxes previously deferred as a regulatory asset.
|
•
|
The effects of colder weather in 2019 of $5.1 million.
|
•
|
A decrease in the weather-related normal heating degree day methodology resulting in a favorable variance of $4.7 million, as discussed above.
|
|
Three Months Ended March 31,
|
||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019 vs. 2018
|
||||||
Operating Income
|
$
|
95.0
|
|
|
$
|
83.1
|
|
|
$
|
11.9
|
|
|
Three Months Ended March 31,
|
||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019 vs. 2018
|
||||||
Net Revenues
|
|
|
|
|
|
||||||
Operating revenues
|
$
|
431.0
|
|
|
$
|
423.5
|
|
|
$
|
7.5
|
|
Less: Cost of sales (excluding depreciation and amortization)
|
130.1
|
|
|
132.7
|
|
|
(2.6
|
)
|
|||
Net Revenues
|
300.9
|
|
|
290.8
|
|
|
10.1
|
|
|||
Operating Expenses
|
|
|
|
|
|
|
|||||
Operation and maintenance
|
121.7
|
|
|
126.2
|
|
|
(4.5
|
)
|
|||
Depreciation and amortization
|
68.2
|
|
|
65.5
|
|
|
2.7
|
|
|||
Other taxes
|
16.0
|
|
|
16.0
|
|
|
—
|
|
|||
Total Operating Expenses
|
205.9
|
|
|
207.7
|
|
|
(1.8
|
)
|
|||
Operating Income
|
$
|
95.0
|
|
|
$
|
83.1
|
|
|
$
|
11.9
|
|
Revenues
|
|
|
|
|
|
|
|||||
Residential
|
$
|
118.8
|
|
|
$
|
114.5
|
|
|
$
|
4.3
|
|
Commercial
|
119.3
|
|
|
116.9
|
|
|
2.4
|
|
|||
Industrial
|
163.5
|
|
|
162.7
|
|
|
0.8
|
|
|||
Wholesale
|
2.7
|
|
|
4.7
|
|
|
(2.0
|
)
|
|||
Other
|
26.7
|
|
|
24.7
|
|
|
2.0
|
|
|||
Total
|
$
|
431.0
|
|
|
$
|
423.5
|
|
|
$
|
7.5
|
|
Sales (Gigawatt Hours)
|
|
|
|
|
|
|
|||||
Residential
|
792.4
|
|
|
788.4
|
|
|
4.0
|
|
|||
Commercial
|
894.4
|
|
|
905.7
|
|
|
(11.3
|
)
|
|||
Industrial
|
2,215.7
|
|
|
2,333.8
|
|
|
(118.1
|
)
|
|||
Wholesale
|
6.5
|
|
|
50.8
|
|
|
(44.3
|
)
|
|||
Other
|
34.5
|
|
|
33.2
|
|
|
1.3
|
|
|||
Total
|
3,943.5
|
|
|
4,111.9
|
|
|
(168.4
|
)
|
|||
Electric Customers
|
|
|
|
|
|
||||||
Residential
|
412,739
|
|
|
409,962
|
|
|
2,777
|
|
|||
Commercial
|
56,703
|
|
|
56,175
|
|
|
528
|
|
|||
Industrial
|
2,281
|
|
|
2,300
|
|
|
(19
|
)
|
|||
Wholesale
|
732
|
|
|
739
|
|
|
(7
|
)
|
|||
Other
|
2
|
|
|
2
|
|
|
—
|
|
|||
Total
|
472,457
|
|
|
469,178
|
|
|
3,279
|
|
•
|
Higher rates driven by incremental capital spend on infrastructure replacement of $4.3 million.
|
•
|
Decreased fuel handling costs of $3.4 million.
|
•
|
Higher regulatory and depreciation trackers, which are offset in operating expense, of $2.7 million.
|
•
|
The effects of colder weather of $2.5 million.
|
•
|
Decreased residential and industrial usage of $4.4 million.
|
•
|
Decreased employee and administrative costs of $4.9 million.
|
•
|
Lower outside service costs of $3.5 million primarily related to the retirement of Bailly Generating Station Units 7 and 8 on May 31, 2018.
|
•
|
Higher regulatory and depreciation trackers, which are offset in net revenues, of $2.7 million.
|
•
|
Increased depreciation of $1.4 million due to higher capital expenditures placed in service.
|
(in millions)
|
March 31, 2019
|
December 31, 2018
|
||||
Current Liquidity
|
|
|
||||
Revolving Credit Facility
|
$
|
1,850.0
|
|
$
|
1,850.0
|
|
Accounts Receivable Program(1)
|
500.0
|
|
399.2
|
|
||
Less:
|
|
|
||||
Commercial Paper
|
980.0
|
|
978.0
|
|
||
Accounts Receivable Program Utilized
|
500.0
|
|
399.2
|
|
||
Letters of Credit Outstanding Under Credit Facility
|
10.2
|
|
10.2
|
|
||
Add:
|
|
|
||||
Cash and Cash Equivalents
|
151.0
|
|
112.8
|
|
||
Net Available Liquidity
|
$
|
1,010.8
|
|
$
|
974.6
|
|
(10.1)
|
Fifth Amended and Restated Revolving Credit Agreement, dated as of February 20, 2019, among NiSource Inc., as Borrower, the Lenders party thereto, Barclays Bank PLC, as Administrative Agent, Citibank, N.A. and MUFG Bank, Ltd., as Co-Syndication Agents, Credit Suisse AG, Cayman Islands Branch, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as Co-Documentation Agents, and Barclays Bank PLC, Citibank, N.A., MUFG Bank, Ltd., Credit Suisse Loan Funding LLC, JPMorgan Chase Bank, N.A. and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Bookrunners (incorporated by reference to Exhibit 10.1 of the NiSource Inc. Form 8-K filed on February 20, 2019).
|
|
|
(10.2)
|
Amended and Restated NiSource Inc. Employee Stock Purchase Plan adopted as of February 1, 2019 (incorporated by reference to Exhibit C to the NiSource Inc. Definitive Proxy Statement to Stockholders for the Annual Meeting to be held on May 7, 2019, filed on April 1, 2019).
|
|
|
(10.3)
|
Amended and Restated Term Loan Agreement, dated as of April 17, 2019, among NiSource Inc., as Borrower, the Lenders party thereto, and MUFG Bank Ltd., as Administrative Agent and Sole Lead Arranger and Sole Bookrunner (incorporated by reference to Exhibit 10.1 of the NiSource Inc. Form 8-k filed on April 17, 2019).
|
|
|
(31.1)
|
|
|
|
(31.2)
|
|
|
|
(32.1)
|
|
|
|
(32.2)
|
|
|
|
(101.INS)
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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:
|
May 1, 2019
|
By:
|
/s/ Joseph W. Mulpas
|
|
|
|
|
Joseph W. Mulpas
|
|
|
|
|
Vice President, Chief Accounting Officer and Controller
(Principal Accounting Officer)
|
1.
|
I have reviewed this Quarterly Report of NiSource Inc. on Form 10-Q for the quarter ended March 31, 2019;
|
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:
|
May 1, 2019
|
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 March 31, 2019;
|
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:
|
May 1, 2019
|
By:
|
|
/s/ Donald E. Brown
|
|
|
|
|
|
Donald E. Brown
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ Joseph Hamrock
|
|
|
|
|
Joseph Hamrock
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
Date:
|
|
May 1, 2019
|
|
(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/ Donald E. Brown
|
|
|
|
|
Donald E. Brown
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
Date:
|
|
May 1, 2019
|
|