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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
or
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number 001-16189
NiSource Inc.
(Exact name of registrant as specified in its charter)
DE 35-2108964
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
801 East 86th Avenue
Merrillville, IN 46410
(Address of principal executive offices) (Zip Code)
(877) 647-5990
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading
Symbol(s)
Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share NI NYSE
Depositary Shares, each representing a 1/1,000th ownership interest in a share of 6.50% Series B NI PR B NYSE
Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, liquidation preference $25,000 per share and a 1/1,000th ownership interest in a share of Series B-1 Preferred Stock, par value $0.01 per share, liquidation preference $0.01 per share
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ    No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)
Yes þ    No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ  Accelerated filer ¨  Emerging growth company   Non-accelerated filer ¨ Smaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes     No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Stock, $0.01 Par Value: 383,023,038 shares outstanding at July 30, 2020.



NISOURCE INC.
FORM 10-Q QUARTERLY REPORT
FOR THE QUARTER ENDED JUNE 30, 2020
Table of Contents
 
      Page
3
PART I FINANCIAL INFORMATION
Item 1. Financial Statements - unaudited
7
8
9
Item 2.
Item 3.
Item 4.
PART II OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
2


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
AOCI Accumulated Other Comprehensive Income (Loss)
ASC Accounting Standards Codification
ASU Accounting Standards Update
ATM At-the-market
BTA Build-transfer agreement
CARES Act The Coronavirus Aid, Relief and Economic Security Act provides more than $2 trillion to battle COVID-19 and its economic effects, including various types of economic relief for impacted business and industries.
CCRs Coal Combustion Residuals
CEP Capital Expenditure Program
CERCLA Comprehensive Environmental Response Compensation and Liability Act (also known as Superfund)
COVID-19 Novel Coronavirus 2019
DSIC Distribution System Improvement Charge
DPU Department of Public Utilities
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
IURC Indiana Utility Regulatory Commission
LIBOR London InterBank Offered Rate
MA DOR Massachusetts Department of Revenue
3


DEFINED TERMS

Massachusetts Business All of the assets being sold to, and liabilities being assumed by, Eversource pursuant to the Asset Purchase Agreement
MGP Manufactured Gas Plant
MISO Midcontinent Independent System Operator
MMDth Million dekatherms
MW Megawatts
MWh Megawatt hours
NTSB National Transportation Safety Board
NYMEX New York Mercantile Exchange
OPEB Other Postretirement Benefits
PHMSA Pipeline and Hazardous Materials Safety Administration
PPA Power Purchase Agreement
PSC Public Service Commission
PTC Production tax credit
PUC Public Utilities Commission
PUCO Public Utilities Commission of Ohio
RCRA Resource Conservation and Recovery Act
RFP Request for proposals
SAVE Steps to Advance Virginia's Energy Plan
SEC Securities and Exchange Commission
SMRP Safety Modification and Replacement Program
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
Note regarding forward-looking statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Investors and prospective investors should understand that many factors govern whether any forward-looking statement contained herein will be or can be realized. Any one of those factors could cause actual results to differ materially from those projected. These forward-looking statements include, but are not limited to, statements concerning our plans, strategies, objectives, expected performance, expenditures, recovery of expenditures through rates, stated on either a consolidated or segment basis, and any and all underlying assumptions and other statements that are other than statements of historical fact. All forward-looking statements are based on assumptions that management believes to be reasonable; however, there can be no assurance that actual results will not differ materially.
Factors that could cause actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this Quarterly Report on Form 10-Q include, among other things, our debt obligations; any changes to our credit rating or the credit rating of certain of our subsidiaries; our ability to execute our growth strategy; changes in general economic, capital and commodity market conditions; pension funding obligations; economic regulation and the impact of regulatory rate reviews; our ability to obtain expected financial or regulatory outcomes; our ability to adapt to, and manage costs related to, advances in technology; any changes in our assumptions regarding the financial implications of the Greater Lawrence Incident; compliance with the agreements entered into with the U.S. Attorney’s Office to settle the U.S. Attorney’s Office’s investigation relating to the Greater Lawrence Incident; the pending sale of the Massachusetts Business, including the terms and closing conditions under the Asset Purchase Agreement; potential incidents and other operating risks associated with our business; continuing and potential future impacts from the COVID-19 pandemic; our ability to obtain sufficient insurance coverage and whether such coverage will protect us against significant losses; the outcome of legal and regulatory proceedings, investigations, incidents, claims and litigation; any damage to our reputation, including in connection with the Greater Lawrence Incident; compliance with applicable laws, regulations and tariffs; compliance with environmental laws and the costs of associated liabilities;
4


fluctuations in demand from residential commercial and industrial customers; economic conditions of certain industries; the success of NIPSCO's electric generation strategy; the price of energy commodities and related transportation costs; the reliability of customers and suppliers to fulfill their payment and contractual obligations; potential impairment of goodwill; changes in taxation and accounting principles; the impact of an aging infrastructure; the impact of climate change; potential cyber-attacks; construction risks and natural gas costs and supply risks; extreme weather conditions; the attraction and retention of a qualified workforce; the ability of our subsidiaries to generate cash; our ability to manage new initiatives and organizational changes; the performance of third-party suppliers and service providers; changes in the method for determining LIBOR and the potential replacement of the LIBOR benchmark interest rate; and other matters in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, many of which risks are beyond our control. In addition, the relative contributions to profitability by each business segment, and the assumptions underlying the forward-looking statements relating thereto, may change over time.
All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events or changes to the future results over time or otherwise, except as required by law.
5


Index Page
7
8
9
6

PART I

ITEM 1. FINANCIAL STATEMENTS
NiSource Inc.
Condensed Statements of Consolidated Income (Loss) (unaudited)
  
Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions, except per share amounts) 2020 2019 2020 2019
Operating Revenues
Customer revenues $ 932.7    $ 969.2    $ 2,458.6    $ 2,803.7   
Other revenues 30.0    41.2    109.6    76.5   
Total Operating Revenues 962.7    1,010.4    2,568.2    2,880.2   
Operating Expenses
Cost of sales (excluding depreciation and amortization) 188.4    253.5    650.8    933.8   
Operation and maintenance 353.1    49.2    797.7    601.6   
Depreciation and amortization 177.5    177.9    361.8    353.0   
Loss on classification as held for sale 84.4    —    364.6    —   
Loss (gain) on sale of fixed assets and impairments, net (0.6)   (0.1)   (0.7)   0.1   
Other taxes 68.2    66.4    154.1    154.0   
Total Operating Expenses 871.0    546.9    2,328.3    2,042.5   
Operating Income 91.7    463.5    239.9    837.7   
Other Income (Deductions)
Interest expense, net (97.0)   (94.1)   (189.9)   (189.7)  
Other, net 6.5    (0.3)   11.9    (1.0)  
Total Other Deductions, Net (90.5)   (94.4)   (178.0)   (190.7)  
Income before Income Taxes 1.2    369.1    61.9    647.0   
Income Taxes 5.9    72.2    (9.0)   131.2   
Net Income (Loss) (4.7)   296.9    70.9    515.8   
Preferred dividends (13.8)   (13.8)   (27.6)   (27.6)  
Net Income (Loss) Available to Common Shareholders (18.5)   283.1    43.3    488.2   
Earnings (Loss) Per Share
Basic Earnings (Loss) Per Share $ (0.05)   $ 0.76    $ 0.11    $ 1.31   
Diluted Earnings (Loss) Per Share $ (0.05)   $ 0.75    $ 0.11    $ 1.30   
Basic Average Common Shares Outstanding 383.5    373.9    383.3    373.6   
Diluted Average Common Shares 383.5    375.2    384.2    374.9   
The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.
7

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ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.
Condensed Statements of Consolidated Comprehensive Income (Loss) (unaudited)
  Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions, net of taxes) 2020 2019 2020 2019
Net Income (Loss) $ (4.7)   $ 296.9    $ 70.9    $ 515.8   
Other comprehensive income (loss):
 Net unrealized gain on available-for-sale debt securities(1)
5.7    2.1    0.3    4.9   
Net unrealized gain (loss) on cash flow hedges(2)
2.7    (30.5)   (130.6)   (49.8)  
Unrecognized pension and OPEB benefit(3)
0.3    0.4    1.0    1.3   
Total other comprehensive income (loss) 8.7    (28.0)   (129.3)   (43.6)  
Comprehensive Income (Loss) $ 4.0    $ 268.9    $ (58.4)   $ 472.2   
(1) Net unrealized gain on available-for-sale debt securities, net of $1.5 million and $0.6 million tax expense in the second quarter of 2020 and 2019, respectively, and $0.1 million and $1.3 million tax expense for the six months ended 2020 and 2019, respectively.
(2) Net unrealized gain (loss) on cash flow hedges, net of $0.9 million tax expense and $10.0 million tax benefit in the second quarter of 2020 and 2019, respectively, and $43.2 million and $16.5 million tax benefit for the six months ended 2020 and 2019, respectively.
(3) Unrecognized pension and OPEB benefit, net of $0.2 million and $0.1 million tax expense in the second quarter of 2020 and 2019, respectively, and $0.1 million tax benefit and $0.5 million tax expense for the six months ended 2020 and 2019, respectively.
The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.
8

Table of Contents
ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.
Condensed Consolidated Balance Sheets (unaudited)
(in millions) June 30,
2020
December 31,
2019
ASSETS
Property, Plant and Equipment
Utility plant $ 20,427.1    $ 24,502.6   
Accumulated depreciation and amortization (5,549.0)   (7,609.3)  
Net utility plant 14,878.1    16,893.3   
Other property, at cost, less accumulated depreciation 894.3    18.9   
Net Property, Plant and Equipment 15,772.4    16,912.2   
Investments and Other Assets
Unconsolidated affiliates 1.4    1.3   
Available-for-sale debt securities (amortized cost of $151.4 and $150.1, allowance for credit losses of $0.8 and $0, respectively) 155.2    154.2   
Other investments 72.6    74.7   
Total Investments and Other Assets 229.2    230.2   
Current Assets
Cash and cash equivalents 142.2    139.3   
Restricted cash 11.4    9.1   
Accounts receivable 577.1    876.1   
Allowance for credit losses (31.4)   (19.2)  
Accounts receivable, net 545.7    856.9   
Gas inventory 112.4    250.9   
Materials and supplies, at average cost 131.8    120.2   
Electric production fuel, at average cost 67.6    53.6   
Exchange gas receivable 17.9    48.5   
Assets held for sale 1,542.3    —   
Regulatory assets 145.7    225.7   
Prepayments and other 142.6    149.7   
Total Current Assets 2,859.6    1,853.9   
Other Assets
Regulatory assets 1,926.3    2,013.9   
Goodwill 1,485.9    1,485.9   
Deferred charges and other 163.1    163.7   
Total Other Assets 3,575.3    3,663.5   
Total Assets $ 22,436.5    $ 22,659.8   
 The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.
 









9

Table of Contents
ITEM 1. FINANCIAL STATEMENTS (continued)
NiSource Inc.
Condensed Consolidated Balance Sheets (unaudited) (continued)
(in millions, except share amounts) June 30,
2020
December 31,
2019
CAPITALIZATION AND LIABILITIES
Capitalization
Stockholders’ Equity
Common stock - $0.01 par value, 600,000,000 shares authorized; 382,917,033 and 382,135,680 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 6,676.5    6,666.2   
Retained deficit (1,576.7)   (1,370.8)  
Accumulated other comprehensive loss (221.9)   (92.6)  
Total Stockholders’ Equity 5,661.8    5,986.7   
Long-term debt, excluding amounts due within one year 8,810.2    7,856.2   
Total Capitalization 14,472.0    13,842.9   
Current Liabilities
Current portion of long-term debt 15.6    13.4   
Short-term borrowings 1,163.5    1,773.2   
Accounts payable 402.5    666.0   
Dividends payable - common stock 80.4    —   
Dividends payable - preferred stock 8.1    —   
Customer deposits and credits 163.1    256.4   
Taxes accrued 195.7    231.6   
Interest accrued 106.0    99.4   
Risk management liabilities 120.0    12.6   
Exchange gas payable 27.7    59.7   
Regulatory liabilities 184.9    160.2   
Liabilities held for sale 455.4    —   
Legal and environmental 21.6    20.1   
Accrued compensation and employee benefits 120.3    156.3   
Claims accrued 22.4    165.4   
Other accruals 140.5    131.5   
Total Current Liabilities 3,227.7    3,745.8   
Other Liabilities
Risk management liabilities 200.0    134.0   
Deferred income taxes 1,477.4    1,485.3   
Deferred investment tax credits 9.1    9.7   
Accrued insurance liabilities 85.4    81.5   
Accrued liability for postretirement and postemployment benefits 351.3    373.2   
Regulatory liabilities 1,967.7    2,352.0   
Asset retirement obligations 447.1    416.9   
Other noncurrent liabilities 198.8    218.5   
Total Other Liabilities 4,736.8    5,071.1   
Commitments and Contingencies (Refer to Note 19, "Other Commitments and Contingencies") —    —   
Total Capitalization and Liabilities $ 22,436.5    $ 22,659.8   
The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.
10

Table of Contents
ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.
Condensed Statements of Consolidated Cash Flows (unaudited)

Six Months Ended June 30, (in millions)
2020 2019
Operating Activities
Net Income $ 70.9    $ 515.8   
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Depreciation and amortization 361.8    353.0   
Deferred income taxes and investment tax credits (11.4)   126.5   
Loss on classification as held for sale
364.6    —   
Other adjustments 7.7    13.6   
Changes in Assets and Liabilities:
Components of working capital (75.9)   (9.0)  
Regulatory assets/liabilities 17.0    (40.9)  
Deferred charges and other noncurrent assets (17.4)   (68.4)  
Other noncurrent liabilities (9.6)   35.6   
Net Cash Flows from Operating Activities 707.7    926.2   
Investing Activities
Capital expenditures (819.3)   (843.5)  
Cost of removal (66.7)   (55.7)  
Other investing activities (0.6)   1.2   
Net Cash Flows used for Investing Activities (886.6)   (898.0)  
Financing Activities
Issuance of long-term debt 1,000.0    —   
Repayments of long-term debt and finance lease obligations (7.8)   (46.0)  
Issuance of short-term debt (maturity > 90 days) 1,350.0    500.0   
Repayment of short-term debt (maturity > 90 days) (1,350.0)   (350.0)  
Change in short-term borrowings, net (maturity ≤ 90 days) (609.7)   (46.2)  
Issuance of common stock, net of issuance costs 7.5    7.1   
Equity costs, premiums and other debt related costs
(17.6)   (4.2)  
Dividends paid - common stock (160.7)   (149.1)  
Dividends paid - preferred stock (27.6)   (28.5)  
Net Cash Flows from (used for) Financing Activities 184.1    (116.9)  
Change in cash, cash equivalents and restricted cash 5.2    (88.7)  
Cash, cash equivalents and restricted cash at beginning of period 148.4    121.1   
Cash, Cash Equivalents and Restricted Cash at End of Period $ 153.6    $ 32.4   

Supplemental Disclosures of Cash Flow Information
Six Months Ended June 30, (in millions)
2020 2019
Non-cash transactions:
Capital expenditures included in current liabilities $ 167.7    $ 169.3   
Dividends declared but not paid 88.5    82.7   
Assets recorded for asset retirement obligations $ 70.3    $ 12.8   
The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.
11

Table of Contents
ITEM 1. FINANCIAL STATEMENTS (continued)
NiSource Inc.
Condensed Statements of Consolidated Equity (unaudited)
(in millions) Common
Stock
Preferred Stock(1)
Treasury
Stock
Additional
Paid-In
Capital
Retained
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Balance as of April 1, 2020 $ 3.8    $ 880.0    $ (99.9)   $ 6,671.5    $ (1,483.4)   $ (230.6)   $ 5,741.4   
Comprehensive Income:
Net loss —    —    —    —    (4.7)   —    (4.7)  
Other comprehensive income, net of tax —    —    —    —    —    8.7    8.7   
Dividends:
Common stock ($0.21 per share) —    —    —    —    (80.4)   —    (80.4)  
Preferred stock (See Note 5) —    —    —    —    (8.2)   —    (8.2)  
Stock issuances:
Employee stock purchase plan —    —    —    1.4    —    —    1.4   
Long-term incentive plan —    —    —    0.4    —    —    0.4   
401(k) and profit sharing —    —    —    3.2    —    —    3.2   
Balance as of June 30, 2020 $ 3.8    $ 880.0    $ (99.9)   $ 6,676.5    $ (1,576.7)   $ (221.9)   $ 5,661.8   
(1)Series A and Series B shares have an aggregate liquidation preference of $400M and $500M, respectively. See Note 5, "Equity" for additional information.
(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, 2020 $ 3.8    $ 880.0    $ (99.9)   $ 6,666.2    $ (1,370.8)   $ (92.6)   $ 5,986.7   
Comprehensive Income:
Net income —    —    —    —    70.9    —    70.9   
Other comprehensive loss, net of tax —    —    —    —    —    (129.3)   (129.3)  
Dividends:
Common stock ($0.63 per share) —    —    —    —    (241.1)   —    (241.1)  
Preferred stock (See Note 5) —    —    —    —    (35.7)   —    (35.7)  
Stock issuances:
Employee stock purchase plan —    —    —    2.7    —    —    2.7   
Long-term incentive plan —    —    —    (0.1)   —    —    (0.1)  
401(k) and profit sharing —    —    —    7.7    —    —    7.7   
Balance as of June 30, 2020 $ 3.8    $ 880.0    $ (99.9)   $ 6,676.5    $ (1,576.7)   $ (221.9)   $ 5,661.8   
(1)Series A and Series B shares have an aggregate liquidation preference of $400M and $500M, respectively. See Note 5, "Equity" for additional information.

















12

Table of Contents
ITEM 1. FINANCIAL STATEMENTS (continued)
NiSource Inc.
Condensed Statements of Consolidated Equity (unaudited) (continued)
(in millions) Common
Stock
Preferred Stock(1)
Treasury
Stock
Additional
Paid-In
Capital
Retained
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Balance as of April 1, 2019 $ 3.8    $ 880.0    $ (99.9)   $ 6,406.5    $ (1,358.0)   $ (52.8)   $ 5,779.6   
Comprehensive Income:
Net income —    —    —    —    296.9    —    296.9   
Other comprehensive loss, net of tax —    —    —    —    —    (28.0)   (28.0)  
Dividends:
Common stock ($0.20 per share) —    —    —    —    (74.7)   —    (74.7)  
Preferred stock (See Note 5) —    —    —    —    (8.2)   —    (8.2)  
Stock issuances:
Employee stock purchase plan —    —    —    1.4    —    —    1.4   
Long-term incentive plan —    —    —    4.8    —    —    4.8   
401(k) and profit sharing —    —    —    4.4    —    —    4.4   
Balance as of June 30, 2019 $ 3.8    $ 880.0    $ (99.9)   $ 6,417.1    $ (1,144.0)   $ (80.8)   $ 5,976.2   
(1)Series A and Series B shares have an aggregate liquidation preference of $400M and $500M, respectively. See Note 5, "Equity" for additional information.
(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 —    —    —    —    515.8    —    515.8   
Other comprehensive loss, net of tax —    —    —    —    —    (43.6)   (43.6)  
Dividends:
Common stock ($0.60 per share) —    —    —    —    (223.8)   —    (223.8)  
Preferred stock (See Note 5) —    —    —    —    (36.7)   —    (36.7)  
Stock issuances:
Employee stock purchase plan —    —    —    2.7    —    —    2.7   
Long-term incentive plan —    —    —    2.1    —    —    2.1   
401(k) and profit sharing —    —    —    8.8    —    —    8.8   
Balance as of June 30, 2019 $ 3.8    $ 880.0    $ (99.9)   $ 6,417.1    $ (1,144.0)   $ (80.8)   $ 5,976.2   
(1)Series A and Series B shares have an aggregate liquidation preference of $400M and $500M, respectively. See Note 5, "Equity" for additional information.
13

Table of Contents
ITEM 1. FINANCIAL STATEMENTS (continued)
NiSource Inc.
Condensed Statements of Consolidated Equity (unaudited) (continued)
Preferred Common
Shares (in thousands)
Shares Shares Treasury Outstanding
Balance as of April 1, 2020 440    386,657    (3,963)   382,694   
Issued:
Employee stock purchase plan —    60    —    60   
Long-term incentive plan —    32    —    32   
401(k) and profit sharing —    131    —    131   
Balance as of June 30, 2020 440    386,880    (3,963)   382,917   
Preferred Common
Shares (in thousands)
Shares Shares Treasury Outstanding
Balance as of January 1, 2020 440    386,099    (3,963)   382,136   
Issued:
Employee stock purchase plan —    106    —    106   
Long-term incentive plan —    379    —    379   
401(k) and profit sharing —    296    —    296   
Balance as of June 30, 2020 440    386,880    (3,963)   382,917   
Preferred Common
Shares (in thousands)
Shares Shares Treasury Outstanding
Balance as of April 1, 2019 440    376,966    (3,963)   373,003   
Issued:
Employee stock purchase plan —    52    —    52   
Long-term incentive plan —    38    —    38   
401(k) and profit sharing —    156    —    156   
Balance as of June 30, 2019 440    377,212    (3,963)   373,249   
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 —    102    —    102   
Long-term incentive plan —    464    —    464   
401(k) and profit sharing —    320    —    320   
Balance as of June 30, 2019 440    377,212    (3,963)   373,249   






14

Table of Contents
ITEM 1. FINANCIAL STATEMENTS (continued)
NiSource Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)
 
1. Basis of Accounting Presentation
Our accompanying Condensed Consolidated Financial Statements (unaudited) reflect all normal recurring adjustments that are necessary, in the opinion of management, to present fairly the results of operations in accordance with GAAP in the United States of America. The accompanying financial statements contain our accounts and that of our majority-owned or controlled subsidiaries.
The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Income for interim periods may not be indicative of results for the calendar year due to weather variations and other factors.
The Condensed Consolidated Financial Statements (unaudited) have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made in this Quarterly Report on Form 10-Q are adequate to make the information herein not misleading.
During the first quarter of 2020, the United States and countries around the globe were impacted by the outbreak of the novel coronavirus (COVID-19). On March 11, 2020, the World Health Organization (WHO) declared the outbreak of COVID-19 to be a global pandemic. In response to this declaration and the rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country have imposed varying degrees of restrictions on social and commercial activity to promote social distancing in an effort to slow the spread of the illness. These measures have had and continue to have a significant adverse impact upon many sectors of the economy.
COVID-19 has impacted our results of operation in the first half of 2020. As a result of COVID-19, we have experienced, and expect to continue to experience, lower commercial and industrial demand for both the Electric Operations and the Gas Distribution Operations segments and higher residential demand for both the Electric Operations and the Gas Distribution Operations segments. In addition, we have incurred incremental costs for COVID-19 related services and supplies, as well as higher bad debt expense. Due to the uncertainty and evolving situation, we will continue to monitor how COVID-19 is affecting our workforce, customers, suppliers, operations, financial results and cash flow. The extent of the impact in the future will vary and depend on the duration and severity of the impact on the global, national and local economies. See Note 3, “Revenue Recognition,” Note 10, “Regulatory Matters,” Note 14, “Goodwill,” and Note 15, “Income Taxes,” for information on COVID-19.
15

Table of Contents
ITEM 1. FINANCIAL STATEMENTS (continued)
NiSource Inc.
Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

2. Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

We are currently evaluating the impact of certain ASUs on our Condensed Consolidated Financial Statements (unaudited) and Notes to Condensed Consolidated Financial Statements (unaudited), which are described below:
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
This 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 in discussions with our third-party specialist to evaluate the effects of this pronouncement on our Notes to Condensed Consolidated Financial Statements (unaudited). These discussions include, but are not limited to, understanding new information to be provided by the specialists in order to meet disclosure requirements. We expect to adopt this ASU on its effective date.
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
This pronouncement simplifies the accounting for income taxes by eliminating certain exceptions to the general principles in ASC 740, income taxes. It also improves consistency of application for other areas of the guidance by clarifying and amending existing guidance. Annual periods beginning after December 15, 2020 Early adoption is permitted. The most relevant amendment requires that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax. For us, these taxes include the Massachusetts excise tax that is currently recorded as non-income based taxes. Consequently, we do not expect an impact on our Condensed Consolidated Financial Statements (unaudited) and Notes to Condensed Consolidated Financial Statements (unaudited). We continue to monitor the guidance as it relates to new activity or transactions that could impact our Condensed Consolidated Financial Statements (unaudited) and Notes to Condensed Consolidated Financial Statements (unaudited). We expect to adopt this ASU on its effective date.
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Statements
This pronouncement provides temporary optional expedients and exceptions for applying GAAP principles to contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. Upon issuance on March 12, 2020, and will apply though December 31, 2022. We are currently evaluating the temporary expedients and options available under this guidance, and the effects of this pronouncement on our Condensed Consolidated Financial Statements (unaudited) and Notes to Condensed Consolidated Financial Statements (unaudited). We are currently identifying and evaluating contracts that may be impacted. As of June 30, 2020, we have not applied any expedients and options available under this ASU.
16

Table of Contents
ITEM 1. FINANCIAL STATEMENTS (continued)
NiSource Inc.
Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
Recently Adopted Accounting Pronouncements
Standard Adoption
ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (ASC 326). ASC 326 revised the GAAP guidance on the impairment of most financial assets and certain other instruments that are not measured at fair value through net income. ASC 326 introduces the current expected credit loss (CECL) model that is based on expected losses for instruments measured at amortized cost rather than incurred losses. It also requires entities to record an allowance 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 debt securities will be recognized immediately in earnings, instead of over-time as they would under historic guidance. In 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivative and Hedging, and Topic 825, Financial Instruments. This pronouncement clarified and improved certain areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement.
We adopted ASC 326 effective January 1, 2020, using a modified retrospective method. Adoption of this standard did not have material impact on our Condensed Consolidated Financial Statements (unaudited). No adjustments were made to the January 1, 2020 opening balances as a result of this adoption. As required under the modified retrospective method of adoption, results for the reporting periods beginning after January 1, 2020 are presented under ASC 326, while prior period amounts are not adjusted.
See Note 3, "Revenue Recognition," and Note 11, "Fair Value," for our discussion of the implementing these standards.
ASU 2016-13,  Financial Instruments-Credit Losses (Topic 326)

3. Revenue Recognition
Revenue Disaggregation and Reconciliation. We disaggregate revenue from contracts with customers based upon reportable segment, as well as by customer class. As our revenues are primarily earned over a period of time and we do not earn a material amount of revenues at a point in time, revenues are not disaggregated as such below. The Gas Distribution Operations segment provides natural gas service and transportation for residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana and Massachusetts. The Electric Operations segment provides electric service in 20 counties in the northern part of Indiana.
The tables below reconcile revenue disaggregation by customer class to segment revenue, as well as to revenues reflected on the Condensed Statements of Consolidated Income (Loss) (unaudited) for the three and six months ended June 30, 2020 and June 30, 2019:
Three Months Ended June 30, 2020 (in millions)
Gas Distribution Operations Electric Operations Corporate and Other Total
Customer Revenues(1)
Residential $ 414.7    $ 127.5    $ —    $ 542.2   
Commercial 122.7    112.9    —    235.6   
Industrial 48.6    89.3    —    137.9   
Off-system 8.0    —    —    8.0   
Miscellaneous 5.3    3.5    0.2    9.0   
Total Customer Revenues $ 599.3    $ 333.2    $ 0.2    $ 932.7   
Other Revenues 7.0    23.0    —    30.0   
Total Operating Revenues $ 606.3    $ 356.2    $ 0.2    $ 962.7   
(1) Customer revenue amounts exclude intersegment revenues. See Note 22, "Business Segment Information," for discussion of intersegment revenues.

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Table of Contents
ITEM 1. FINANCIAL STATEMENTS (continued)
NiSource Inc.
Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
Three Months Ended June 30, 2019 (in millions)
Gas Distribution Operations Electric Operations Corporate and Other Total
Customer Revenues(1)
Residential $ 375.0    $ 105.9    $ —    $ 480.9   
Commercial 121.8    115.1    —    236.9   
Industrial 52.9    155.8    —    208.7   
Off-system 23.4    —    —    23.4   
Miscellaneous 12.4    6.7    0.2    19.3   
Total Customer Revenues $ 585.5    $ 383.5    $ 0.2    $ 969.2   
Other Revenues 18.3    22.9    —    41.2   
Total Operating Revenues $ 603.8    $ 406.4    $ 0.2    $ 1,010.4   
(1) Customer revenue amounts exclude intersegment revenues. See Note 22, "Business Segment Information," for discussion of intersegment revenues.