Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

			☑			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No þ

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 definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12-b-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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No þ

The aggregate market value of the registrant's common stock, par value $0.01 per share (the "Common Stock") held by non-affiliates was approximately $8,671,854,266 based upon the June 30, 2020, closing price of $22.74 on the New York Stock Exchange.

There were 391,859,711 shares of Common Stock outstanding as of February 9, 2021.

Documents Incorporated by Reference

Part III of this report incorporates by reference specific portions of the Registrant’s Notice of Annual Meeting and Proxy Statement relating to the Annual Meeting of Stockholders to be held on May 25, 2021.

CONTENTS

						Page No.
Defined Terms						3
Part I
Item 1.			Business			6
Item 1A.			Risk Factors			11
Item 1B.			Unresolved Staff Comments			24
Item 2.			Properties			24
Item 3.			Legal Proceedings			24
Item 4			Mine Safety Disclosures			24
Part II
Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			26
Item 6.			Selected Financial Data			27
Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			28
Item 7A.			Quantitative and Qualitative Disclosures About Market Risk			49
Item 8.			Financial Statements and Supplementary Data			50
Item 9.			Changes in and Disagreements With Accountants on Accounting and Financial Disclosure			118
Item 9A.			Controls and Procedures			118
Item 9B.			Other Information			120
Part III
Item 10.			Directors, Executive Officers and Corporate Governance			121
Item 11.			Executive Compensation			121
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			121
Item 13.			Certain Relationships and Related Transactions, and Director Independence			121
Item 14.			Principal Accounting Fees and Services			121
Part IV
Item 15.			Exhibits, Financial Statement Schedules			122
Item 16.			Form 10-K Summary			128
Signatures						129

DEFINED TERMS
The following is a list of abbreviations or acronyms that are used 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.
Company						NiSource Inc. and its subsidiaries, unless otherwise indicated by the context
NIPSCO						Northern Indiana Public Service Company LLC
NiSource ("we," "us" or "our")						NiSource Inc.
NiSource Corporate Services						NiSource Corporate Services Company
Abbreviations
ACE						Affordable clean energy
AFUDC						Allowance for funds used during construction
AMR						Automatic meter reading
AOCI						Accumulated Other Comprehensive Income
ASC						Accounting Standards Codification
ASU						Accounting Standards Update
ATM						At-the-market
Board						Board of Directors
BTA						Build-transfer agreement
CAP						Compliance Assurance Process
CCGT						Combined Cycle Gas Turbine
CCRs						Coal Combustion Residuals
CEP						Capital Expenditure Program
CERCLA						Comprehensive Environmental Response Compensation and Liability Act (also known as Superfund)
COVID-19 ("the COVID-19 pandemic" or "the pandemic")						Novel Coronavirus 2019
DPA						Deferred prosecution agreement
DPU						Department of Public Utilities
DSIC						Distribution System Investment Charge
DSM						Demand Side Management
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
GHG						Greenhouse gas
GWh						Gigawatt hours

DEFINED TERMS
HLBV						Hypothetical Liquidation at Book Value
IRP						Infrastructure Replacement Program
IRS						Internal Revenue Service
IURC						Indiana Utility Regulatory Commission
LDCs						Local distribution companies
LIBOR						London inter-bank offered rate
LIFO						Last-in, first-out
MA DOR						Massachusetts Department of Revenue
Massachusetts Business						All of the assets sold to, and liabilities 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
NOL						Net Operating Loss
NTSB						National Transportation Safety Board
NYMEX						The New York Mercantile Exchange
NYSE						The New York Stock Exchange
OPEB						Other Postretirement and Postemployment Benefits
PCB						Polychlorinated biphenyls
PHMSA						U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration
PPA						Power Purchase Agreement
PSC						Public Service Commission
PUC						Public Utility Commission
PUCO						Public Utilities Commission of Ohio
RCRA						Resource Conservation and Recovery Act
ROE						Return on Equity
Rosewater						Rosewater Wind Generation LLC
ROU						Right of use
SAVE						Steps to Advance Virginia's Energy Plan
SEC						Securities and Exchange Commission
SMRP						Safety Modification and Replacement Program
SMS						Safety Management System
STRIDE						Strategic Infrastructure Development and Enhancement
Sugar Creek						Sugar Creek electric generating plant
TCJA						Tax Cuts and Jobs Act of 2017
TDSIC						Transmission, Distribution and Storage System Improvement Charge
TSA						Transition Service Agreement
U.S. Attorney's Office						U.S. Attorney's Office for the District of Massachusetts
VIE						Variable Interest Entity
VSCC						Virginia State Corporation Commission

Note regarding forward-looking statements

This Annual Report on Form 10-K 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. Expressions of future goals and expectations and similar expressions, including "may," "will," "should," "could," "would," "aims," "seeks," "expects," "plans," "anticipates," "intends," "believes," "estimates," "predicts," "potential," "targets," "forecast," and "continue," reflecting something other than historical fact are intended to identify forward-looking statements. 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 Annual Report on Form 10-K include, among other things, our ability to execute our business plan or growth strategy, including utility infrastructure investments; potential incidents and other operating risks associated with our business; our ability to adapt to, and manage costs related to, advances in technology; impacts related to our aging infrastructure; our ability to obtain sufficient insurance coverage and whether such coverage will protect us against significant losses; the success of our electric generation strategy; construction risks and natural gas costs and supply risks; fluctuations in demand from residential and commercial customers; fluctuations in the price of energy commodities and related transportation costs or an inability to obtain an adequate, reliable and cost-effective fuel supply to meet customer demands; the attraction and retention of a qualified workforce and ability to maintain good labor relations; our ability to manage new initiatives and organizational changes; the performance of third-party suppliers and service providers; potential cyber-attacks; any damage to our reputation; any remaining liabilities or impact related to the sale of Massachusetts Business; the impacts of natural disasters, potential terrorist attacks or other catastrophic events; the impacts of climate change and extreme weather conditions; our debt obligations; any changes to our credit rating or the credit rating of certain of our subsidiaries; adverse economic and capital market conditions or increases in interest rates; economic regulation and the impact of regulatory rate reviews; our ability to obtain expected financial or regulatory outcomes; continuing and potential future impacts from the COVID-19 pandemic; economic conditions in certain industries; the reliability of customers and suppliers to fulfill their payment and contractual obligations; the ability of our subsidiaries to generate cash; pension funding obligations; potential impairments of goodwill; changes in the method for determining LIBOR and the potential replacement of the LIBOR benchmark interest rate; the outcome of legal and regulatory proceedings, investigations, incidents, claims and litigation; potential remaining liabilities related to 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; compliance with applicable laws, regulations and tariffs; compliance with environmental laws and the costs of associated liabilities; changes in taxation; and other matters set forth in Item 1, “Business,” Item 1A, “Risk Factors” and Part II. Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this report, some 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.

PART I

ITEM 1. BUSINESS

NIS****OURCE INC.

NiSource Inc. is an energy holding company under the Public Utility Holding Company Act of 2005 whose primary subsidiaries are fully regulated natural gas and electric utility companies, serving approximately 3.7 million customers in six states. NiSource is the successor to an Indiana corporation organized in 1987 under the name of NIPSCO Industries, Inc., which changed its name to NiSource on April 14, 1999.

NiSource’s principal subsidiaries include NiSource Gas Distribution Group, Inc., a natural gas distribution holding company, and NIPSCO, a gas and electric company. NiSource derives substantially all of its revenues and earnings from the operating results of these rate-regulated businesses.

On February 26, 2020, NiSource and Columbia of Massachusetts entered into an Asset Purchase Agreement with Eversource (the "Asset Purchase Agreement"). Upon the terms and subject to the conditions set forth in the Asset Purchase Agreement, NiSource and Columbia of Massachusetts agreed to sell to Eversource, with certain additions and exceptions: (1) substantially all of the assets of Columbia of Massachusetts and (2) all of the assets held by any of Columbia of Massachusetts’ affiliates that primarily relate to the Massachusetts Business, and (3) Eversource agreed to assume certain liabilities of Columbia of Massachusetts and its affiliates. The closing of the transaction occurred on October 9, 2020. Refer to Note 1-A, "Company Structure and Principles of Consolidation," Note 7, "Goodwill and Other Intangible Assets," Note 20-C. "Legal Proceedings," and Note 20-E. "Other Matters," in the Notes to Consolidated Financial Statements for more information.

The COVID-19 pandemic has had widespread effects, including impacts on the communities in which we serve as well as our business operations. NiSource has been pro-active in adjusting its operating procedures in response to the pandemic, including customer facing and field activities as well as our back-office support. Through 2020, we have not experienced material impacts to our ongoing or planned construction, replacement and maintenance activities as a result of the pandemic. Please refer to specific and potential impacts of the pandemic in Item 1A, "Risk Factors", Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations” and the Notes to Consolidated Financial Statements.

NiSource’s reportable segments are: Gas Distribution Operations and Electric Operations. The following is a summary of the business for each reporting segment. Refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 24, "Segments of Business," in the Notes to Consolidated Financial Statements for additional information for each segment.

Gas Distribution Operations

Our natural gas distribution operations serve approximately 3.2 million customers in six states. We operate approximately 53,700 miles of distribution main pipeline plus the associated individual customer service lines and 1,700 miles of transmission main pipeline located in our service areas described below. Throughout our service areas we also have gate stations and other operations support facilities. Through our wholly-owned subsidiary NiSource Gas Distribution Group, Inc., we own five distribution subsidiaries that provide natural gas to approximately 2.4 million residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, and Maryland. Additionally, we distribute natural gas to approximately 848,000 customers in northern Indiana through our wholly-owned subsidiary NIPSCO.

Rates include provisions to adjust billings for fluctuations in the cost of natural gas. Revenues are adjusted for differences between actual costs, subject to reconciliation, and the amounts billed in current rates.

Electric Operations

We generate, transmit and distribute electricity through our subsidiary NIPSCO to approximately 479,000 customers in 20 counties in the northern part of Indiana and also engage in wholesale electric and transmission transactions. NIPSCO owns and operates two coal-fired electric generating stations: four units at R.M. Schahfer located in Wheatfield, IN and one unit at Michigan City located in Michigan City, IN. The two operating facilities have a generating capacity of 2,080 MW. NIPSCO also owns and operates (i) Sugar Creek, a CCGT plant located in West Terre Haute, IN with generating capacity of 571 MW; (ii) two gas-fired generating units located at R.M. Schahfer with a generating capacity of 155 MW; and (iii) two hydroelectric generating plants with a generating capacity of 10 MW (Oakdale located at Lake Freeman in Carroll County, IN and Norway located at Lake Schahfer in White County, IN). These facilities provide for a total system operating generating capacity of 2,816 MW. NIPSCO is the managing partner in Rosewater Wind Generation LLC, a joint venture that owns and operates 102 MW of nameplate generating capacity in White County, IN. Refer to Note 4 "Variable Interest Entities" in the Notes to Consolidated Financial Statements for more information.

In May 2018, NIPSCO completed the retirement of two coal-burning units at Bailly Generating Station, located in Chesterton, IN. These units had a generating capacity of approximately 460 MW, which was replaced through various electric purchase agreements.