01—Abstract
Summary
Summary of the 10-K filed February 17, 2021. Cited figures are marked; the original filing is the authoritative source.
NiSource Inc. is an energy holding company whose primary subsidiaries are fully regulated natural gas and electric utilities serving approximately 3.7 million customers in six states.
In 2020 the company reported operating revenues of $4,681.7 milliona, down from $5,208.9 million in 2019, and operating income of $550.8 million versus $890.7 million. The decline was driven primarily by the sale of the Massachusetts Business to Eversource, which closed on October 9, 2020 for net proceeds of approximately $1,113 million, and by a $412.4 million loss on that sale. Net loss available to common shareholders was $72.7 million, or $0.19 per basic share, compared with income of $328.0 million, or $0.88 per share, in 2019.
Other deductions included a $243.5 millionb loss on early extinguishment of long-term debt. The filing highlights continuing investment in the utility base. The company projects 2021 capital spending of approximately $1.9 to $2.1 billion, and plans to retire the R.M.
Schahfer Generating Station by mid-2023 and Michigan City by the end of 2028, with replacement renewable capacity from PPAs and build-transfer agreements. NiSource Next, a multi-year cost optimization program, is projected to reduce ongoing operation and maintenance costs by approximately 8% in 2021 compared with 2020. Liabilities tied to the Greater Lawrence Incident remain a key risk, with total third-party claims and government penalties estimated at $1,036 million to $1,050 millionc, exceeding the $800 million of third-party liability insurance coverage.
Liquidity stood at $1,721.6 milliond of net available liquidity at year-end 2020, and total long-term debt was $9,243.1 million including finance leases. The debt-to-capitalization ratio was 62.5% against a 70% covenant.
Credit ratings were BBB+ at S&P, Baa2 at Moody's and BBB at Fitch, all with stable outlooks. The Board declared a quarterly common dividend of $0.22 per share in January 2021.
02—Key points
Key Highlights
- Operating revenues fell to $4,681.7 million in 2020 from $5,208.9 million in 2019, largely due to the sale of the Massachusetts Business.
- Net loss available to common shareholders was $72.7 million, or $0.19 per basic share, versus income of $328.0 million, or $0.88 per share, in 2019.
- A $412.4 million loss on the sale of the Massachusetts Business and a $243.5 million loss on early extinguishment of debt weighed on 2020 results.
- Planned 2021 capital program of approximately $1.9 to $2.1 billion, with coal retirements at R.M. Schahfer (two units accelerated to end of 2021) and Michigan City by 2028.
- Greater Lawrence Incident total third-party claims and penalties estimated at $1,036 million to $1,050 million, above the $800 million insurance coverage.
- Net available liquidity of $1,721.6 million at December 31, 2020; debt-to-capitalization ratio of 62.5% versus a 70% covenant limit.
- NiSource Next program projected to reduce ongoing operation and maintenance costs by approximately 8% in 2021 compared with 2020.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 17, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $4.47B$5.05B | −11.5% |
| Operating Income | $550.80M$890.70M | −38.2% |
| Interest Expense | $370.70M$378.90M | −2.2% |
| Net Income | -$17.60M$383.10M | −104.6% |
| EPS (Basic) | $-0.19$0.88 | −121.6% |
| EPS (Diluted) | $-0.19$0.87 | −121.8% |
| Shares Outstanding (Basic) | 384.30M374.60M | +2.6% |
| Shares Outstanding (Diluted) | 384.30M376.00M | +2.2% |
05—Questions
Frequently Asked Questions
Why did NiSource report a net loss in 2020?
The net loss reflected a $412.4 million loss on the sale of the Massachusetts Business to Eversource, a $243.5 million loss on early extinguishment of long-term debt, and lower operating income of $550.8 million. Income tax was a benefit of $17.1 million, versus an expense in 2019.
What are the main capital investment plans for 2021?
NiSource projects capital investment of approximately $1.9 to $2.1 billion in 2021, supporting safety and reliability through modernization of gas and electric systems and customer growth. It also plans to replace coal generation with renewables, including solar, wind and storage, through PPAs and build-transfer agreements.
What is the status of the Greater Lawrence Incident liabilities?
Total expenses for third-party claims and government fines, penalties and settlements are estimated at $1,036 million to $1,050 million, and other incident-related costs at $445 million to $450 million. Third-party liability insurance of $800 million has been fully collected, and total expenses have exceeded that coverage. The company also has a deferred prosecution agreement with the U.S. Attorney's Office.
How strong is the company's liquidity and balance sheet?
At December 31, 2020, net available liquidity was $1,721.6 million, and the debt-to-capitalization ratio was 62.5% against a covenant maximum of 70%. Credit ratings were BBB+ (S&P), Baa2 (Moody's) and BBB (Fitch), all with stable outlooks. Short-term borrowings were $503.0 million.
Will the common dividend continue?
The Board declared a quarterly common dividend of $0.22 per share on January 27, 2021, payable February 19, 2021. The filing states the Board currently intends to continue regular quarterly dividends, but that timing and amount depend on subsidiary earnings, financial condition, regulatory restrictions and other factors, with no assurance of continuation.
06—Continue