Slide 1: Supplemental Slides Second Quarter 2020 Earnings
Supplemental Slides Second Quarter 2020 Earnings August 5, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of federal securities laws. 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
Slide 3: Key Takeaways
Key Takeaways • Cost mitigation efforts offset financial impacts of COVID-19 in Q2 • Expected 2020 Capex reaffirmed at $1.7 to $1.8B • Columbia Gas of Massachusetts asset sale remains on track • Corporate strategic initiative underway with a focus on cost structure and capabilities • 2021 NOEPS* gui
Slide 4: Second Quarter 2020 Financial Highlights
Second Quarter 2020 Financial Highlights Non-GAAP* 2020 2019 Change Net Operating Earnings Available to Common $50.2 $19.1 $31.1 Shareholders ($M) Net Operating Earnings Per Share $0.13 $0.05 $0.08 GAAP 2020 2019 Change Net Income (Loss) Available to Common ($18.5) $283.1 ($301.6) Shareholders ($M)
Slide 5: Second Quarter 2020 Segment Highlights
Second Quarter 2020 Segment Highlights Gas Distribution Operations Q2 2020 Q2 2019 Change ($ millions) Operating Revenues 606.2 608.5 (2.3) Operating Expenses* 532.8 561.7 28.9 Operating Earnings (Non-GAAP) 73.4 46.8 26.6 * Includes cost of sales net decrease of $17.5M Electric Operations Q2 2020 Q2
Slide 6: COVID-19 Financial Impacts
COVID-19 Financial Impacts Gas Margin Impact by Customer Class ($M) Electric Margin Impact by Customer Class 2Q 2020 vs 2Q2019 ($M) 2Q 2020 vs 2Q2019 $6.2 $0.7 $— $(4.7) $(3.9) $(9.2) Residential Commercial Industrial Residential Commercial Industrial 2Q 2020 COVID-19 NOEPS* impact of (~$0.06), offs
Slide 7: 2021 Guidance Initiated
2021 Guidance Initiated NiSource 2021 NOEPS* Guidance Range $1.28 - $1.36 2021 Guidance Establishes the Starting Point for the Long-Term Plan * Net Operating Earnings Per Share (Non-GAAP) 7
Slide 8: NiSource Debt and Credit Profile
NiSource Debt and Credit Profile • Debt level: ~$10.0B as of June 30, 2020 • ~$8.7B of long-term debt ◦ Weighted average maturity ~16 years ◦ Weighted average interest rate of 4.31% • Solid liquidity position • ~$2.0B in net available liquidity as of June 30, 2020* • ~$2.2B of committed facilities i
Slide 9: Financing Plan Update
Financing Plan Update NiSource Current Financing Plan* 2019 2020 ($ in Millions) Actual Estimated Equity Common Equity Block None None Planned Issuance ATM (At-The-Market) $229 $200 - $300 ESPP/401K/Other $34 $35 - $60 Long-Term Debt Incremental Long-Term Debt $714 $1,000 - $1,200 Long-term Financin
Slide 10: Gas Distribution Operations
Gas Distribution Operations • Base rate cases pending in Pennsylvania, Maryland • Safety & Infrastructure program extension approved in Indiana • Deferral orders received for COVID-related bad debt in IN, PA, VA, MD and OH • Continuing to execute infrastructure modernization designed to enhance syst
Slide 11: Electric Operations
Electric Operations • New solar projects announced for coal replacement capacity • $1.8 - $2.0B incremental capital investment opportunities expected in 2022 and 2023 • Continued execution of seven-year ~$1.2B electric system modernization program Key Milestones: Highlight Key Components Status • Co
Slide 12: Investor Day Preview - NiSource Long-Term Plan (2021-2024)
Investor Day Preview - NiSource Long-Term Plan (2021-2024) Investor Day will highlight strategy and enhanced long-term growth plan (virtual meeting scheduled for September 29, 2020) NiSource Projected Rate Base ($B)* • Business strategy and long-term outlook – Updated for gas and electric businesses
Slide 13: Investor Day Preview - Renewable Investment Opportunity
Investor Day Preview - Renewable Investment Opportunity NiSource (NIPSCO) JV Ownership ~$2.8 -$3.0B NiSource (NIPSCO) Tax Equity JV Ownership Investment 50% ~$1.0B ~$1.8 - $2.0B Projects in Negotiation PPAs Submitted to IURC: ~$1.4 - $1.6B NiSource Purchase – Jordan Creek (NextEra) – Greensboro (Nex
Slide 14: Investor Day Preview - Generation Strategy Timeline
Investor Day Preview - Generation Strategy Timeline Milestone 2020 2021 2022 2023 Finalize Commercial Negotiations from Second RFP Regulatory (CPCN) Filings/ Approvals Project Construction (Second RFP) Renewable Generation Investment R.M. Schahfer Retirement Investments Included in Rate Base • Renew
Slide 15: Appendix: Second Quarter 2020 Earnings
Appendix: Second Quarter 2020 Earnings
Slide 16: COVID-19 Actions
COVID-19 Actions ◦ Following CDC and local guidelines intended to ensure the health and safety of our employees and customers ◦ Operating under Incident Command Structure to coordinate strategy, execution and communication across all seven states ◦ For Customers ▪ Suspended shut-offs for non-payment
Slide 17: COVID-19 Business Implications
COVID-19 Business Implications • Customer - lower revenue and cash flows in Q2, gradual recovery expected into 1H 2021 ▪ Sales volume declines (Commercial and Industrial) ▪ Increased bad debt expense (due to shut-off moratorium and job losses) ▪ Customer attrition • Supply Chain - no material impact
Slide 18: COVID-19 Customer Demand and Bad Debt
COVID-19 Customer Demand and Bad Debt Retail Margins by Customer Class Customer Demand • Experienced lower commercial and industrial sales 9% • Partially offset by increased residential 15% sales 26% 22% 26% Rate Design 35% • Gas Segment • Residential ~75% Fixed 69% • Commercial ~45% Fixed 59% • Ele
Slide 19: Bad Debt Recovery Mechanisms
Bad Debt Recovery Mechanisms Bad Debt Expense Tracked Tracked Filing Company Included in Base Incremental Frequency Rates* Expense Gas Distribution NIPSCO Gas Yes Gas cost only Quarterly Gas cost and delivery Columbia Gas of Ohio Yes Annual charge Columbia Gas of Pennsylvania Yes Partial gas cost on
Slide 20: Revenue and Weather Normalization Mechanisms
Revenue and Weather Normalization Mechanisms Revenue Decoupling/ Weather Company Normalization Normalization Gas Distribution NIPSCO Gas None None Straight Fixed Variable Rates for Columbia Gas of Ohio None Residential and Small Commercial Columbia Gas of Pennsylvania None Yes - Residential Columbia
Slide 21: Safety Management System (SMS) - Updates Planned for Investor Day
Safety Management System (SMS) - Updates Planned for Investor Day Integrating Safety, Risk Management and Investment Planning 21
Slide 22: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG) Longstanding ESG Program • NiSource has been reporting on sustainability and ESG for more than a decade • Climate Report published in 2019 aligned with the Task Force on Climate-related Financial Disclosures (TCFD) framework • Member of the Dow Jones Sustaina
Slide 23: Capital Expenditures
Capital Expenditures Investments Expected to Deliver Customer Value, Enhance System Safety and Reliability Estimated ~ $1.8B ~ $1.9B $1.7B - $1.8B Recovery Period Within ~0-3 Months 12% ~ 10% 15% (Growth) Within ~0-18 Months (Tracker) 54% 62% ~ 70% Periodic Rate Cases (Maintenance/Other) 31% 26% ~ 2
Slide 24: Liquidity and Capitalization as of Second Quarter 2020 ($M)
Liquidity and Capitalization as of Second Quarter 2020 ($M) Current Liquidity Actual 3/31/2020 Maturity Revolving Credit Facility $1,850 Feb. 20, 2024 Accounts Receivable Programs* 314 Less: Drawn on Credit Facility — Commercial Paper — Accounts Receivable Programs Utilized 314 L/C's Outstanding Und
Slide 25: Long-Term Debt as of Second Quarter 2020 ($M)
Long-Term Debt as of Second Quarter 2020 ($M) Debt Detail Balance Wtd. Avg. Rate* Wtd. Avg. Maturity Long-Term Debt $8,739 4.30% 16 years Revolving Credit Facility — Commercial Paper — A/R Program Borrowings 314 0.50% 1 month Term Loan 850 0.93% 9 months Capital Leases, Def Cost & Other 87 N/A N/A T
Slide 26: Gas Distribution Operations Infrastructure Programs
Gas Distribution Operations Infrastructure Programs Estimated Annual Base Case Total Modernization Recovery Year-End 2019 Modernization Company Authorized Identified Program Mechanism Rate Base Program ROE Investments Investments Investment Columbia Not Specified $3.2B ~$10.4B ~$10.4B $435M - $550M
Slide 27: Electric Operations Investment Programs and Generation Transition
Electric Operations Investment Programs and Generation Transition Infrastructure Investment Programs Identified Estimated Annual Recovery Base Case Program Investments Investment Mechanism Authorized ROE Infrastructure ~$5.9B ~$190M - $240M Tracked 9.75% Modernization Generation Transition Project P
Slide 28: Regulatory Update
Regulatory Update 2020 Rate Case and Program/Project Activity Company/Filing Summary Timeline In Progress 20-year PPAs for Brickyard and Greensboro Filed: July 17, 2020 NIPSCO Electric - Solar Project Filings solar projects Order Expected: December 1, 2020 Filed: May 15, 2020 Columbia Gas of Marylan
Slide 29: Safety and Infrastructure Investment and Tracker Filing Details
Safety and Infrastructure Investment and Tracker Filing Details Incremental Investments Recovery Recovery Company Filing Mechanism Investment Investment Effective Date Period Amount ($M) Date FY 2018 $199.6 Feb 2019 May 2019 Infrastructure Replacement Columbia Gas of Ohio Program (IRP) FY 2019 $234.