NiSource (NI) 10-K risk factor changes: FY2020 vs FY2019

We are reliant on technology to run our business, which is dependent upon financial and operational computer systems to process critical information necessary to conduct various elements of our business, including the generation, transmission and distribution of [removed: electricity,] [added: electricity;] operation of our gas pipeline [removed: facilities] [added: facilities;] and the recording and reporting of commercial and financial transactions to regulators, investors and other stakeholders.

In addition to general information and cyber risks that all large corporations face (e.g., malware, unauthorized access attempts, phishing attacks, malicious intent by [removed: insiders] [added: insiders, third-party software vulnerabilities] and inadvertent disclosure of sensitive information), the utility industry faces evolving and increasingly complex cybersecurity risks associated with protecting sensitive and confidential customer [added: and employee] information, electric grid infrastructure, and natural gas infrastructure.

Deployment of new business [removed: technologies] [added: technologies, along with maintaining legacy technology,] represents a [removed: new and] large-scale opportunity for attacks on our information systems and confidential customer [added: and employee] information, as well as on the integrity of the energy grid and the natural gas infrastructure.

Although we do maintain cyber insurance, it is possible that such insurance will not adequately cover any losses or liabilities we may incur as a result of [removed: any cybersecurity-related litigation.][added: a cybersecurity incident.]

Our capital projects and programs subject us to construction risks and natural gas costs and supply risks, and [removed: require numerous] [added: are subject to regulatory oversight, including requirements for] permits, approvals and certificates from various governmental agencies.

[removed: Sustained extreme] [added: Extreme] weather conditions may negatively impact our operations.

[added: Despite preventative maintenance efforts, persistent weather related stress] on our infrastructure may reveal weaknesses in our systems not previously known to us or otherwise present various operational challenges across all business segments.

[removed: Labor disruptions, strikes or significant negotiated wage] and benefit increases, whether due to union activities, employee turnover or otherwise, could have a material adverse effect on our businesses, results of operations and/or cash flows.

Some of our indebtedness, including borrowings under our revolving credit [removed: agreement and term loan] agreement, bears interest at a variable rate based on LIBOR.

[added: In addition, these hedging instruments, as well as hedging instruments that our subsidiaries] use for hedging natural gas price and basis risk, rely on LIBOR-based rates to calculate interest accrued on certain payments that may be required to be made under these agreements, such as late payments or interest accrued if any cash collateral should be held by a counterparty.

[removed: SOFR is intended to be a] broad measure of the cost of borrowing cash overnight that is collateralized by U.S. Treasury securities.

The preferred option within the Integrated Resource Plan retires the R.M. Schahfer Generating Station by mid-2023 and the Michigan City Generating Station by the end of 2028.

These stations represent 2,080 MW of generating capacity, equal to 72% of NIPSCO’s remaining generating capacity and 100% of NIPSCO's remaining coal-fired generating capacity.

The current replacement plan includes renewable sources of energy, including wind, solar, and battery storage.

In the second quarter of 2020, the MISO approved NIPSCO's plan to retire the R.M. Schahfer Generating Station in 2023.

In February 2021, NIPSCO decided to submit modified Attachment Y Notices to MISO requesting accelerated retirement of two of the four units at R.M. Schahfer Generating Station.

The two units are now expected to be retired by the end of 2021, with the remaining two units still scheduled to be retired in 2023.

Refer to Note 20- E.

"Other Matters - NIPSCO 2018 Integrated Resource Plan," in the Notes to Consolidated Financial Statements for additional information.

There are inherent risks and uncertainties in executing the Integrated Resource Plan, including changes in market conditions, regulatory approvals, environmental regulations, commodity costs and customer expectations, which may impede NIPSCO’s ability to achieve the intended results.

NIPSCO’s future success will depend, in part, on its ability to successfully implement its long-term electric generation plans, to offer services that meet customer demands and evolving industry standards, and to recover all, or a significant portion of, any unrecovered investment in obsolete assets.

NIPSCO’s electric generation strategy could require significant future capital expenditures, operating costs and charges to earnings that may negatively impact our financial position, financial results and cash flows.

As required by statute, NIPSCO plans to submit a new Integrated Resource Plan to the IURC by November 1, 2021.

This submission will again outline NIPSCO's short and long term plans for meeting the energy supply needs of its customers, taking into account current perspectives on a range of factors including, but not limited to, new state and federal policy, wholesale market rules, forecasted customer demand, and available resource alternatives.The analysis, conclusions and Preferred Plan in the 2021 Integrated Resource Plan may be different from the analysis, conclusions and Preferred Plan in the 2018 Integrated Resource Plan.

On May 1, 2020, former President Donald Trump issued an executive order (the “EO”) prohibiting any transaction initiated after that day that (i) involves bulk-power system (“BPS”) equipment designed, developed, manufactured or supplied by persons owned by, controlled by or subject to the jurisdiction or direction of a foreign adversary and (ii) poses an unacceptable risk to national security.

Implementing regulations from the U.S. Secretary of Energy are still pending.

The EO also requires the U.S. Secretary of Energy to review the risk of existing bulk-power system equipment sourced from foreign adversaries and to establish a task force to review and recommend federal procurement policies and procedures consistent with the considerations identified in the EO.

On July 8, 2020, the U.S. Department of Energy issued a Request for Information (“RFI”), seeking input from industry stakeholders to “understand the energy industry’s current practices to identify and mitigate vulnerabilities in the supply chain” for components of bulk-power system equipment.

The RFI identifies the following governments as “foreign adversaries”: China, Cuba, Iran, North Korea, Russia and Venezuela.

The RFI notes that the U.S. Secretary of Energy retains

authority to amend this list at any time and such countries have been identified only for the purposes of the EO.

Pursuant to the EO, on December 17, 2020, the U.S. Department of Energy issued a Prohibition Order (the “Prohibition Order”) prohibiting the acquisition, importation, transfer, or installment of specified BPS equipment from China that directly serves critical defense facilities.

While the implications of the Prohibition Order are still being assessed, it could impact our procurement processes for BPS equipment.

In the future, certain bulk-power system equipment owned or operated by NiSource could possibly be considered to be sourced from a foreign adversary within the meaning of the EO.

These regulations, if implemented, may impact our procurement processes for bulk-power system equipment.

A significant portion of the gas and electricity we sell is used by residential and commercial customers for heating and air conditioning.

Accordingly, fluctuations in weather, gas and electricity commodity costs and economic conditions impact demand of our customers and our operating results.

Energy sales are sensitive to variations in weather.

Forecasts of energy sales are based on “normal” weather, which represents a long-term historical average.

Significant variations from normal weather, could have, and have had, a material impact on energy sales.

Additionally, residential usage, and to some degree commercial usage, is sensitive to fluctuations in commodity costs for gas and electricity, whereby usage declines with increased costs, thus affecting our financial results.

Lastly, residential and commercial customers’ usage is sensitive to economic conditions and factors such as unemployment, consumption and consumer confidence.

Therefore, prevailing economic conditions affecting the demand of our customers may in turn affect our financial results.

Fluctuations in the price of energy commodities or their related transportation costs or an inability to obtain an adequate, reliable and cost-effective fuel supply to meet customer demands may have a negative impact on our financial results.

Our current electric generating fleet is dependent on coal and natural gas for fuel, and our gas distribution operations purchase and resell a portion of the natural gas we deliver to our customers.

These energy commodities are subject to price fluctuations and fluctuations in associated transportation costs.

When appropriate, we use hedging in order to offset fluctuations in commodity supply prices.

We rely on regulatory recovery mechanisms in the various jurisdictions in order to fully recover the commodity costs incurred in selling energy to our customers.

However, while we have historically been successful in the recovery of costs related to such commodity prices, there can be no assurance that such costs will be fully recovered through rates in a timely manner.

In addition, we depend on electric transmission lines, natural gas pipelines, and other transportation facilities owned and operated by third parties to deliver the electricity and natural gas we sell to wholesale markets, supply natural gas to our gas storage and electric generation facilities, and provide retail energy services to customers.

If transportation is disrupted, or if capacity is inadequate, we may be unable to sell and deliver our gas and electric services to some or all of our customers.

Despite preventative maintenance efforts, persistent weather related stress

In addition, these hedging instruments, as well as hedging instruments that our subsidiaries

SOFR may fail to gain market acceptance.

[removed: Contractual Obligations.] We have certain contractual obligations requiring payments at specified periods.

The total contractual obligations in existence at December 31, [removed: 2019] [added: 2020] and their maturities were:

| *(in millions)* | [removed: Total] | | [added: Total] | | [removed: 2020] | | | | 2021 | | | | [added: | |] 2022 | | | | [added: | |] 2023 | | | | [added: | |] 2024 | | | | [added: | | 2025 | | | | | |] After | | |

| Energy commodity [removed: contracts(4)] [added: contracts] | [removed: 95.9] | | [added: 42.1] | | [removed: 65.5] | | | | [removed: 30.4] [added: 42.1] | | | | [added: | |] — | | | | [added: | |] — | | | | [added: | |] — | | | | [added: | |] — | | | [added: | | | — | | |]

| Service obligations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| Other service obligations(5) | [removed: 59.8] | | [added: 12.6] | | [removed: 45.8] | | | | [removed: 14.0] [added: 12.6] | | | | [added: | |] — | | | | [added: | |] — | | | | [added: | |] — | | | | [added: | |] — | | | [added: | | | — | | |]

| [removed: Other liabilities | 27.3 | | | | 27.3 | | | | — | | | | — | | |] [added: Other Liabilities] | [removed: —] | | | | [removed: —] | | | | [removed: —] | | |

(1) Long-term debt balance excludes unamortized issuance costs and discounts of [removed: $70.5] [added: $86.9] million.

(2) Finance lease payments shown above are inclusive of interest totaling [removed: $108.3] [added: $69.7] million.

(3) Operating lease payments shown above are inclusive of interest totaling [removed: $14.3] [added: $7.8] million.

While we have the ability to renew these leases beyond the initial term, we are not reasonably certain (as that term is defined in ASC 842) to do [removed: so.][added: so as they are renewed month-to-month after the first year.]

If we were to continue the fleet vehicle leases outstanding at December 31, [removed: 2019,] [added: 2020,] payments would be [removed: $34.5 million in 2020, $28.3] [added: $30.0] million in 2021, [removed: $23.4] [added: $27.7] million in 2022, [removed: $19.9] [added: $24.9] million in 2023, [removed: $15.2] [added: $22.0] million in [removed: 2024] [added: 2024, $19.0 million in 2025] and [removed: $15.2] [added: $21.5] million thereafter.

For [removed: 2020,] [added: 2021,] we project that we will be required to make interest payments of approximately [removed: $368.2] [added: $339.4] million, which includes [removed: $342.0] [added: $336.3] million of interest payments related to our long-term debt outstanding as of December 31, [removed: 2019.][added: 2020.]

At December 31, [removed: 2019,] [added: 2020,] we had [removed: $1,773.2] [added: $503.0] million in short-term borrowings outstanding.

Our expected payments included within “Other liabilities” in the table of contractual commitments above contains employer contributions to pension and other postretirement benefits plans expected to be made in [removed: 2020.][added: 2021.]

Plan contributions beyond [removed: 2020] [added: 2021] are dependent upon a number of factors, including actual returns on plan assets, which cannot be reliably estimated at this time.

In [removed: 2020,] [added: 2021,] we expect to make contributions of approximately [removed: $3.0] [added: $2.9] million to our pension plans and approximately [removed: $24.0] [added: $21.8] million to our postretirement medical and life plans.

Refer to Note [removed: 11,] [added: 12,] “Pension and Other Postretirement Benefits,” in the Notes to Consolidated Financial Statements for more information.

We also have obligations associated with income, property, gross receipts, franchise, [removed: payroll,] sales and use, and various other taxes and expect to make tax payments of approximately [removed: $247.1] [added: $253.4] million in [removed: 2020,] [added: 2021,] which are not included in the table above.

Refer to Note [removed: 10,] [added: 14,] "Income Taxes," in the Notes to Consolidated Financial Statements for more information.

[added: Short-term Debt.] Refer to Note [removed: 19\-A, “Contractual Obligations,”] [added: 16, “Short-Term Borrowings,”] in the Notes to Consolidated Financial Statements for [removed: further information.][added: information on short-term debt.]

[removed: In January 2019,] NIPSCO [added: has] executed [removed: two 20 year] [added: several] PPAs to purchase 100% of the output from renewable generation facilities at a fixed price per MWh.

[removed: See Note 19\-E,] “Other Matters - NIPSCO 2018 Integrated Resource Plan,” in the Notes to Consolidated Financial Statements for additional information.

[removed: Payments under these agreements are not included in the table of contractual commitments as] NIPSCO's purchase requirement under [removed: these] [added: the] BTAs is dependent on satisfactory approval of the [removed: BTAs] [added: BTA] by the IURC, successful execution of [removed: agreements] [added: an agreement] with a tax equity [removed: partner,] [added: partner] and timely completion of construction.

Refer to Note [removed: 19,] [added: 20,] “Other Commitments and Contingencies,” in the Notes to Consolidated Financial Statements for additional information about such arrangements.

[removed: Risk management for us is] [added: We manage risk through] a multi-faceted process with oversight by the Risk Management Committee that requires constant communication, judgment and knowledge of specialized products and markets.

Refer to Note [removed: 9,] [added: 10,] "Risk Management Activities," in the Notes to the Consolidated Financial Statements for further information on our commodity price risk assets and liabilities as of December 31, [removed: 2019] [added: 2020] and [removed: 2018.][added: 2019.]

We are exposed to interest rate risk as a result of changes in interest rates on borrowings under our revolving credit agreement, commercial paper program, [removed: term loan agreement and] accounts receivable [removed: programs,] [added: programs and now-settled term loan,] which have interest rates that are indexed to short-term market interest rates.

Based upon average borrowings and debt obligations subject to fluctuations in short-term market interest rates, an increase (or decrease) in short-term interest rates of 100 basis points (1%) would have increased (or decreased) interest expense by [removed: $19.0] [added: $12.3] million and [removed: $13.3] [added: $19.0] million for [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

Refer to Note [removed: 9,] [added: 10,] "Risk Management Activities," in the Notes to Consolidated Financial Statements for further information on our interest rate risk assets and liabilities as of December 31, [removed: 2019] [added: 2020] and [removed: 2018.][added: 2019.]

Exposures to credit risks are monitored by the risk management [removed: function] [added: function,] which is independent of commercial operations.

The total amounts of regulatory assets and liabilities reflected on the Consolidated Balance Sheets were [removed: $2,239.6] [added: $1,930.5] million and [removed: $2,512.2] [added: $2,065.5] million at December 31, [removed: 2019,] [added: 2020,] and [removed: $2,237.5] [added: $2,239.6] million and [removed: $2,660.0] [added: $2,512.2] million at December 31, [removed: 2018,] [added: 2019,] respectively.

For additional information, refer to Note [removed: 8,] [added: 9,] “Regulatory Matters,” in the Notes to Consolidated Financial Statements.

If we determine that the amounts included as regulatory assets [removed: were not] [added: are no longer] recoverable, a charge to income would immediately be required to the extent of the unrecoverable amounts.

For additional information, refer to Note [removed: 8,] [added: 9,] "Regulatory Matters," and Note [removed: 10,] [added: 11,] "Income Taxes," in the Notes to Consolidated Financial Statements.

For measurement of [removed: 2020] [added: 2021] net periodic benefit cost, we selected an expected pre-tax long-term rate of return of [removed: 5.70%] [added: 5.20%] and [removed: 5.67%] [added: 5.50%] for our pension and other postretirement benefit plan assets, respectively.

[removed: We] [added: Typically, we] use the Society of Actuaries’ most recently published mortality data in developing a best estimate of mortality as part of the calculation of the pension and other postretirement benefit obligations.

| | [added: | |] Impact on December 31, [removed: 2019] [added: 2020] Projected Benefit Obligation Increase/(Decrease) | | | | | | | [added: | |]

| Change in Assumptions *(in millions)* | [added: | |] Pension Benefits | | | | [added: | |] Other Postretirement Benefits | | |

| +50 basis points change in discount rate | [added: | |] $ | [removed: (89.9] [added: (88.7)] | [removed: )] | | [added: | |] $ | [removed: (29.0] [added: (29.8)] | [removed: )] |

Regulatory Capital Improvement Programs. In 2020, we continued to move forward on core infrastructure and environmental investment programs supported by complementary regulatory and customer initiatives across all seven states of our operating area.

The following table describes the most recent vintage of our regulatory programs to recover infrastructure replacement and other federally-mandated compliance investments currently in rates and those pending commission approval:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| *(in millions)* | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Company | | | Program | | | Incremental Revenue | | | Incremental Capital Investment | | | Investment Period | | | | | | | | | Costs Covered(1) | | | Rates Effective | | |

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| Columbia of Ohio | | | IRP - 2020 | | | $ | 32.9 | | $ | 234.4 | | 1/19-12/19 | | | | | | | | | Replacement of (1) hazardous service lines, (2) cast iron, wrought iron, uncoated steel, and bare steel pipe, (3) natural gas risers prone to failure and installation of AMR devices. | | | May 2020 | | |

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| Columbia of Ohio | | | CEP - 2020 | | | $ | 18.0 | | $ | 185.1 | | 1/19-12/19 | | | | | | | | | Assets not included in the IRP. | | | September 2020 | | |

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| NIPSCO - Gas | | | TDSIC 1 | | | $ | 0.6 | | $ | 26.0 | | 1/20-6/20 | | | | | | | | | New or replacement projects undertaken for the purpose of safety, reliability, system modernization or economic development. | | | January 2021 | | |

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| NIPSCO - Gas | | | FMCA 5 | | | $ | 4.8 | | $ | 42.3 | | 4/20-9/20 | | | | | | | | | Project costs to comply with federal mandates. | | | April 2021 | | |

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| Columbia of Pennsylvania | | | DSIC-Q4 2020(2) | | | $ | 0.8 | | $ | 25.0 | | 9/20-11/20 | | | | | | | | | Eligible project costs including piping, couplings, gas service lines, excess flow valves, risers, meter bars, meters, and other related capitalized cost, to improve the distribution system. | | | January 2021 | | |

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| Columbia of Virginia | | | SAVE - 2021 | | | $ | 5.2 | | $ | 46.4 | | 1/21-12/21 | | | | | | | | | Replacement projects that (1) enhance system safety or reliability, or (2) reduce, or potentially reduce, greenhouse gas emissions. | | | January 2021 | | |

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| Columbia of Kentucky | | | SMRP - 2021(3) | | | $ | 5.8 | | $ | 50.0 | | 1/21-12/21 | | | | | | | | | Replacement of mains and inclusion of system safety investments. | | | Q2 2021 | | |

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| Columbia of Maryland | | | STRIDE - 2021 | | | $ | 1.3 | | $ | 16.9 | | 1/21-12/21 | | | | | | | | | Pipeline upgrades designed to improve public safety or infrastructure reliability. | | | January 2021 | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Long-term debt (1) | $ | 7,738.6 | | | $ | — | | | $ | 63.6 | | | $ | 530.0 | | | $ | 600.0 | | | $ | — | | | $ | 6,545.0 | |

| Interest payments on long-term debt | 6,214.2 | | | | 342.0 | | | | 340.7 | | | | 337.1 | | | | 311.1 | | | | 299.9 | | | | 4,583.4 | | |

| Finance leases(2) | 325.9 | | | | 27.2 | | | | 27.3 | | | | 26.8 | | | | 23.1 | | | | 19.9 | | | | 201.6 | | |

| Operating leases(3) | 79.1 | | | | 15.6 | | | | 9.4 | | | | 8.2 | | | | 7.6 | | | | 6.6 | | | | 31.7 | | |

| Pipeline service obligations | 3,450.7 | | | | 605.0 | | | | 590.1 | | | | 546.8 | | | | 357.2 | | | | 237.5 | | | | 1,114.1 | | |

| IT service obligations | 153.2 | | | | 63.6 | | | | 49.4 | | | | 38.0 | | | | 1.1 | | | | 1.1 | | | | — | | |

| Total contractual obligations | $ | 18,144.7 | | | $ | 1,192.0 | | | $ | 1,124.9 | | | $ | 1,486.9 | | | $ | 1,300.1 | | | $ | 565.0 | | | $ | 12,475.8 | |

(4)In January 2020, NIPSCO signed new coal contract commitments of $14.4 million for 2020.

These contracts are not included above.

(5)In February 2020, NIPSCO signed a new railcar coal transportation contract commitment of $12.0 million for 2020.

This contract is not included above.

Payments under the PPAs will not begin until the associated generation facilities are constructed by the owner / seller which is currently scheduled to be complete by the end of 2020 for one facility.

Payments that will be made under the agreements are not included in the table of contractual commitments above as there are no minimum payment obligations under the agreements.

NIPSCO has filed a notice with the IURC of its intention not to move forward with one of its approved PPAs due to the failure to meet a condition precedent in the agreement as a result of local zoning restrictions.

In January 2019, NIPSCO executed a BTA with a developer to construct a renewable generation facility with a nameplate capacity of approximately 100 MW; construction of the facility is expected to be completed by the end of 2020.

In October 2019, NIPSCO

executed a BTA with a developer to construct an additional renewable generation facility with a nameplate capacity of approximately 300 MW; construction of this facility is expected to be completed by the end of 2021.

Regulatory assets requiring specific regulatory action amounted to $307.2 million at December 31, 2019.

As discussed in Note 19-E, "Other Matters - Greater Lawrence Pipeline Replacement," since the Greater Lawrence Incident and through December 31, 2019, we have invested approximately $258 million of capital spend for the pipeline replacement in the affected communities; this work was completed in 2019.

We maintain property insurance for gas pipelines and other applicable property.

Columbia of Massachusetts has filed a proof of loss with its property insurer for the full cost of the pipeline replacement.

In January 2020, we filed a lawsuit against the property insurer, seeking payment of our property claim.

We are currently unable

to predict the timing or amount of any insurance recovery under the property policy.

The recovery of any capital investment not reimbursed through insurance will be addressed in a future regulatory proceeding; a future regulatory proceeding is dependent on the outcome of the sale of the Massachusetts Business.

The outcome of such a proceeding (if any) is uncertain.

In accordance with ASC 980-360, if it becomes probable that a portion of the pipeline replacement cost will not be recoverable through customer rates and an amount can be reasonably estimated, we will reduce our regulated plant balance for the amount of the probable disallowance and record an associated charge to earnings.

This could result in a material adverse effect to our financial condition, results of operations and cash flows.

Additionally, if a rate order is received allowing recovery of the investment with no or reduced return on investment, a loss on disallowance may be required.

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| --- | --- | --- | --- | --- | --- | --- | --- |

| +50 basis points change in health care trend rates | | | | | 15.0 | | |

| \-50 basis points change in health care trend rates | | | | | (13.1 | | ) |

| +50 basis points change in health care trend rates | | | | | 0.6 | | |

| \-50 basis points change in health care trend rates | | | | | (0.5 | | ) |

This change, compared to the previous method, resulted in a decrease in the actuarially-determined service and interest cost components.

Historically, we estimated service and interest cost utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period.

For fiscal 2017 and beyond, we now utilize a full yield curve approach to estimate these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

NISOURCE INC.

Quantitative and Qualitative Disclosures about Market Risk are reported in Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market Risk Disclosures.”

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

NISOURCE INC.

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| Index | Page |

| [Report of Independent Registered Public Accounting Firm](#s546BEB7BEFE05C3F97A9ABFA75585DC5) | [51](#s546BEB7BEFE05C3F97A9ABFA75585DC5) |

| [Statements of Consolidated Income (Loss)](#s0D49F76862C65DC9B8D568E0F3132445) | [54](#s0D49F76862C65DC9B8D568E0F3132445) |

| [Statements of Consolidated Comprehensive Income (Loss)](#sF9B80047ED3A5720B7FF3CFA3F7A2A12) | [55](#sF9B80047ED3A5720B7FF3CFA3F7A2A12) |

| [Consolidated Balance Sheets](#s790187DA0A8D5472B55F22D8F52FB965) | [56](#s790187DA0A8D5472B55F22D8F52FB965) |

| [Statements of Consolidated Cash Flows](#s95E5985C295756A3AB70458072C8847C) | [58](#s95E5985C295756A3AB70458072C8847C) |

| [Statements of Consolidated Stockholders' Equity](#s76D09C32CB1950D5B7D0C3807EEF7B7E) | [59](#s76D09C32CB1950D5B7D0C3807EEF7B7E) |

| [Notes to Consolidated Financial Statements](#s6DD56C2BC81258D9B61DAD084D957180) | [61](#s6DD56C2BC81258D9B61DAD084D957180) |

| [1. Nature of Operations and Summary of Significant Accounting Policies](#sCFA01B249AC55F9FA72491549FADA2E1) | [61](#sCFA01B249AC55F9FA72491549FADA2E1) |

| [2. Recent Accounting Pronouncements](#s8C9C4A6E58AF54A0B00035F0D2D1DB82) | [64](#s8C9C4A6E58AF54A0B00035F0D2D1DB82) |

| [3. Revenue Recognition](#s3218B9A60C2550AC8A4EC8F82948D058) | [65](#s3218B9A60C2550AC8A4EC8F82948D058) |

| [4. Earnings Per Share](#s1488B5AE8C0A5112B59BA7542DE0177A) | [68](#s1488B5AE8C0A5112B59BA7542DE0177A) |

| [5. Property, Plant and Equipment](#sC39427D0974A5FE3B25FF546245F2847) | [69](#sC39427D0974A5FE3B25FF546245F2847) |

| [6. Goodwill and Other Intangible Assets](#sD414EAC98E11599B94EB3AB695FC1181) | [69](#sD414EAC98E11599B94EB3AB695FC1181) |

| [7. Asset Retirement Obligations](#s2F2322EAF1BA58C5980D59AE55612FBA) | [71](#s2F2322EAF1BA58C5980D59AE55612FBA) |

| [8. Regulatory Matters](#sA0C735064B055006A0FD8BF076B734FC) | [71](#sA0C735064B055006A0FD8BF076B734FC) |

| [9. Risk Management Activities](#s4A5C61F4FDCD59C5877C107309B7CB83) | [79](#s4A5C61F4FDCD59C5877C107309B7CB83) |

| [10. Income Taxes](#sC6F9039A825A59619B2F9D8D5477ABCB) | [81](#sC6F9039A825A59619B2F9D8D5477ABCB) |

| [11. Pension and Other Postretirement Benefits](#s98EC032120B357CA9D697FDC29CDA795) | [83](#s98EC032120B357CA9D697FDC29CDA795) |

| [12. Equity](#s9A82FC2D498A5D34B9453C1328EBAF69) | [95](#s9A82FC2D498A5D34B9453C1328EBAF69) |

| [13. Share-Based Compensation](#s2ABB2DCD0B825B34BF0E77824FCE7D79) | [98](#s2ABB2DCD0B825B34BF0E77824FCE7D79) |

| [14. Long-Term Debt](#s3D2E91AB729E5FCD9787C1E62BE31113) | [101](#s3D2E91AB729E5FCD9787C1E62BE31113) |

| [15. Short-Term Borrowings](#s4FF6BDC85DA55187807038474FDEE7FB) | [102](#s4FF6BDC85DA55187807038474FDEE7FB) |

| [16. Leases](#s8ebc3075570444afb5eefe4d7e551e3e) | [103](#s8ebc3075570444afb5eefe4d7e551e3e) |

| [17. Fair Value](#s1694F76CF79258069370DE1C30BC413C) | [106](#s1694F76CF79258069370DE1C30BC413C) |

| [18. Transfers of Financial Assets](#s7E6F0D9D8DCA5D1DB852FE97D3736EE9) | [109](#s7E6F0D9D8DCA5D1DB852FE97D3736EE9) |

| [19. Other Commitments and Contingencies](#s5B727001564A5B4E926CF3AFBD7F0D80) | [110](#s5B727001564A5B4E926CF3AFBD7F0D80) |

| [20. Accumulated Other Comprehensive Loss](#sE345F6A49F015AA4982A78886D5F965A) | [119](#sE345F6A49F015AA4982A78886D5F965A) |

| [21. Other, Net](#s21BCE95BFFF05D18A0ABCC9C971FDA2C) | [119](#s21BCE95BFFF05D18A0ABCC9C971FDA2C) |

| [22. Interest Expense, Net](#s3ABF47AD5F3857D3BDCFC638FFE05115) | [120](#s3ABF47AD5F3857D3BDCFC638FFE05115) |

| [23. Segments of Business](#sD14885E600B456C580B530C37447376C) | [120](#sD14885E600B456C580B530C37447376C) |

[added: Refer to Note 20-E,] "Other Matters," in the Notes to Consolidated Financial Statements for [removed: more information.][added: further discussion of these plans.]

NIPSCO’s transmission system, with voltages from 69,000 to 765,000 volts, consists of [removed: 3,005] [added: 3,009] circuit miles.

NIPSCO is interconnected with [removed: five] [added: eight] neighboring electric utilities.

During the year ended December 31, [removed: 2019,] [added: 2020,] NIPSCO generated [removed: 62.4%] [added: 68.8%] and purchased [removed: 37.6%] [added: 31.2%] of its electric requirements.

Additionally, MISO is responsible for managing energy markets, transmission constraints and the day-ahead, real-time, [removed: FTR] [added: Financial Transmission Rights] and ancillary markets.

Our utilities continue to move forward on core [added: safety,] infrastructure and environmental investment programs supported by complementary regulatory and customer initiatives across all [removed: seven] [added: six] states in which we operate.

Our goal is to develop strategies that benefit all stakeholders as we [added: (i)] address changing customer conservation patterns, [removed: develop more contemporary pricing structures,] [added: (ii) align our price structures with our cost structure,] and [added: (iii)] embark on long-term investment programs.

These strategies [removed: are intended to improve reliability] [added: focus on improving safety] and [removed: safety, enhance] [added: reliability, enhancing] customer [removed: service] [added: service, lowering customer bills] and [removed: reduce] [added: reducing] emissions while generating sustainable returns.

In its 2018 Integrated Resource Plan submission to the IURC, NIPSCO laid out a plan to retire the R.M. Schahfer Generating Station [removed: (Units 14, 15, 17, and 18)] by 2023 and Michigan City Generating Station [removed: (Unit 12)] by 2028.

The current replacement plan includes renewable sources of energy, including wind, solar, and battery [removed: storage] [added: storage,] to be obtained through a combination of NIPSCO [removed: ownership] [added: investment] and PPAs.

The regulatory frameworks applicable to our operations, [added: including environmental regulations,] at both the state and federal levels, continue to evolve.

The Gas Distribution Operations [removed: companies] [added: utilities] have pursued non-traditional revenue sources within the evolving natural gas marketplace.

These efforts include [added: (i)] the sale of products and services upstream of the companies’ service territory, [added: (ii)] the sale of products and services in the companies’ service territories, and [added: (iii)] gas supply cost incentive mechanisms for service to their core markets.

The upstream products are made up of transactions that occur between an individual Gas Distribution Operations [removed: company] [added: utility] and a buyer for the sales of unbundled or rebundled gas supply and capacity.

The on-system services are offered by us to customers and include products such as the transportation and balancing of gas on the Gas Distribution Operations [removed: company] [added: utility's] system.

The incentive mechanisms give the Gas Distribution Operations [removed: companies] [added: utilities] an opportunity to share in the savings created from such situations as gas purchase prices paid below an agreed upon benchmark and their ability to reduce pipeline capacity charges with their customers.

While [removed: historically] [added: historical] rate design at the distribution level has been structured such that a large portion of cost recovery is based upon throughput rather than in a fixed charge, operating costs are largely incurred on a fixed basis and do not fluctuate due to changes in customer usage.

Columbia of Ohio [removed: restructured its rate design through a base rate proceeding and] has adopted a decoupled rate design [removed: which more] [added: that] closely links the recovery of fixed costs with fixed charges.

Columbia of Maryland and Columbia of Virginia have regulatory approval for [removed: a] [added: weather and] revenue normalization [removed: adjustment] [added: adjustments] for certain customer classes, [removed: a decoupling mechanism whereby] [added: which adjust] monthly revenues that exceed or fall short of approved [removed: levels are reconciled in subsequent months.][added: levels.]

[removed: In a prior base rate proceeding,] Columbia of Pennsylvania [removed: implemented a] [added: continues to operate its] pilot residential weather normalization adjustment.

In a prior gas base rate proceeding, NIPSCO implemented a higher fixed customer charge for residential and small customer classes moving toward [removed: full straight] [added: recovering more of its] fixed [removed: variable rate design.][added: costs through a fixed recovery charge, but has no weather or usage protection mechanism.]

Open access to natural gas supplies over interstate pipelines and the deregulation of the [removed: commodity price of] gas [added: supply] has led to tremendous change in the energy markets.

LDC customers [removed: and marketers] can purchase gas directly from producers and marketers [removed: as] [added: in] an open, competitive [removed: market for gas supplies has emerged.][added: market.]

This separation or “unbundling” of the transportation and other services offered by [removed: pipelines and] LDCs allows customers to purchase the commodity independent of services provided by [removed: the pipelines and] LDCs.

[removed: The] LDCs continue to purchase gas and recover the associated costs from their customers.

Gas Distribution Operations competes with [added: (i)] investor-owned, municipal, and cooperative electric utilities throughout its service [removed: areas as well as] [added: areas, (ii)] other regulated and unregulated natural gas intra and interstate pipelines and [added: (iii)] other alternate fuels, such as propane and fuel oil.

During the heating [removed: season, which is primarily from November through March, revenues from gas sales are more significant,] and [removed: during the] cooling [removed: season, which is primarily June through September,] [added: seasons,] revenues from [added: gas and] electric [removed: sales] [added: sales, respectively,] are more [removed: significant,] [added: significant] than in other months.

[removed: Collective bargaining] [added: Six of these] agreements [removed: for 96] [added: covering 527] employees are set to expire within one year.

ITEM [removed: 1A.][added: 1.]

Business or regulatory conditions may result in us not being able to execute our business plan or growth strategy, including identified, planned and other utility infrastructure [removed: investments.][added: investments, which includes investments related to natural gas pipeline modernization and investments related to our renewable energy projects and the build-transfer execution goals within our business plan.]

Our customer and regulatory initiatives may not achieve planned [added: results.]

[removed: Certain groups] [added: Environmental activist groups, investors] and governmental entities may continue to oppose natural gas delivery and infrastructure investments [added: in the jurisdictions where we operate] because of perceived environmental impacts associated with the natural gas supply chain and end use.

Any of these [removed: developments] [added: circumstances] could adversely affect our results of operations and growth prospects.

A key element of our business model [removed: is that] [added: includes] generating power at central station power plants [removed: achieves] [added: to achieve] economies of scale and [removed: produces] [added: produce] power at a competitive cost.

We continue to research, plan for, and implement new technologies that produce [added: reliable, cost-efficient] power or reduce power consumption.

Advances in [removed: technology and] [added: technology,] changes in laws or regulations (including subsidization) [removed: are reducing the cost of these or] [added: and] other alternative methods of producing power [added: are reducing the cost of electric generation from these sources] to a level that is competitive with [removed: that of] most central station power electric [removed: production or result in smaller-scale, more fuel efficient, and/or more cost-effective distributed generation.][added: production.]

In addition, customers are increasingly expecting [removed: enhanced communications] [added: additional communications, increased access to information, and expanded electronic capabilities] regarding their electric and natural gas services, which, in some cases, [removed: may involve] [added: involves] additional investments in technology.

[removed: While we have recovered] [added: For example, total expenses related to] the [removed: full] [added: Greater Lawrence Incident exceeded the total] amount of [removed: our] liability [removed: insurance] coverage available under our [removed: policies, total expenses related to the incident have exceeded such amount.][added: policies.]

Our gas distribution [added: and transmission] activities, as well as generation, transmission and distribution of electricity, involve a variety of inherent hazards and operating risks, including potential public safety risks.

Our gas distribution [added: and transmission] activities, as well as generation, transmission, and distribution of electricity, involve a variety of inherent hazards and operating risks, including, but not limited to, gas leaks and over-pressurization, downed power lines, [added: excavation or vehicular] damage to our [removed: infrastructure by third parties,] [added: infrastructure,] outages, environmental spills, mechanical problems and other incidents, which could cause substantial financial losses, as demonstrated in part by the Greater Lawrence Incident.

We focus our business strategy on providing safe and reliable service through our core, rate-regulated asset-based utilities, which generate substantially all of our operating income.

The safety of our customers, communities and employees remains our top priority.

The SMS transitioned in 2020 from an accelerated project launch to an established operating model within NiSource.

With the continued support and advice from the Quality Review Board, a panel of third parties with safety operations expertise engaged by management to advise on safety matters, we are continuing to mature our SMS processes, capabilities and talent as we collaborate within and across industries to enhance safety and reduce operational risk.

These units represent 72% of NIPSCO’s remaining generation capacity.

Rate Case Actions

The following table describes current rate case actions as applicable in each of our jurisdictions net of tracker impacts.

See "Cost Recovery and Trackers" below for further detail on trackers.

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| *(in millions)* | | | | | | | | | | | | | | | | | | | | | | | |

| Company | | | Proposed ROE | | | Approved ROE | | | Requested Incremental Revenue | | | Approved Incremental Revenue | | | Filed | | | Status | | | Rates Effective | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| NIPSCO - Electric(1) | | | 10.80 | | % | 9.75 | | % | $ | 21.4 | | $ | (53.5) | | October 31, 2018 | | | Approved December 4, 2019 | | | January 2020 | | |

| Columbia of Pennsylvania(2) | | | 9.86 | | % | N/A | | | $ | 76.8 | | In process | | | April 24, 2020 | | | Order Expected Q1 2021 | | | January 2021 | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| Columbia of Maryland | | | 10.95 | | % | None specified(3) | | | $ | 5.0 | | $ | 2.0 | | May 15, 2020 | | | Approved November 7, 2020 | | | December 2020 | | |

(1)Rates were implemented in two steps, with implementation of step 1 rates effective on January 2, 2020 and step 2 rates effective on March 2, 2020.

(2)On December 4, 2020, a Recommended Decision was issued by the Administrative Law Judge (ALJ) for the PUC to "deny the Company's request in its entirety because it has not met its burden of providing, by substantial evidence, that the proposed base rate revenue increase will result in just and reasonable rates, as required by 66 Pa.C.S.A. § 1301 during the current Coronavirus-2019 pandemic." Columbia of Pennsylvania filed Exceptions to the ALJ’s Recommended Decision on December 22, 2020 in which the Company proposed an increase of $76.8 million to be implemented in two steps: (1) an increase of $38.4 million to be effective January 23, 2021 through June 30, 2021, and defer revenue related to the remaining increase to regulatory assets during this phase, and (2) the remaining increase of $38.4 million to be implemented on July 1, 2021.

Columbia of Pennsylvania proposed to recover the revenue deferred to a Regulatory Asset during the initial phase over a one-year period beginning January 1, 2022 and ending December 31, 2022.

A Final Order from the PUC is expected during the first quarter of 2021 for rates effective retroactively on January 23, 2021.

(3)Columbia of Maryland's rate case resulted in a black box settlement, representing a settlement to a specific revenue increase but not a specified ROE.

The settlement provides use of a 9.60% ROE for future Make Whole and Infrastructure Tracker filings.

We believe we are, in all material respects, in compliance with such laws and regulations and do not expect continued compliance to have a material impact on our capital expenditures, earnings, or competitive position.

We continue to monitor existing and pending laws and regulations, and the impact of regulatory changes cannot be predicted with certainty.

Refer to Note 20-D, "Environmental Matters" in the Notes to Consolidated Financial Statements for more information regarding environmental regulations that are applicable to our operations.

Columbia of Kentucky incorporates a weather normalization adjustment.

Cost Recovery and Trackers. Comparability of our line item operating results are impacted by regulatory trackers that allow for the future recovery in rates of certain costs as described below.

Increases in expenses that are the subject to approved regulatory tracker mechanisms generally lead to increased regulatory assets, which ultimately result in a corresponding increase in operating revenues and, therefore, have essentially no impact on total operating income results.

Certain approved regulatory tracker mechanisms allow for abbreviated regulatory proceedings in order for the operating companies to quickly implement revised rates and recover associated costs.

A portion of the Gas Distribution revenue is related to the recovery of gas costs, the review and recovery of which occurs through standard regulatory proceedings.

All states in our operating area require periodic review of actual gas procurement activity to determine prudence and confirm the recovery of prudently incurred energy commodity costs supplied to customers.

A portion of the Electric Operations revenue is related to the recovery of fuel costs to generate power and the fuel costs related to purchased power.

These costs are recovered through a FAC, which is updated quarterly to reflect actual costs incurred to supply electricity to customers.

The heating season is primarily from November through March, and the cooling season is primarily from June through September.

Human Capital

Human Capital Goals and Objectives*.* We have aligned our human capital goals to achieve the overall company objectives by driving an enhanced talent strategy, elevating support for front-line leaders, fostering a culture of rigor and accountability and strengthening our Human Resources function as a whole.

Workforce Composition*.* As of December 31, 2020, we had 7,301 full-time and 88 part-time employees.

2,728 employees were subject to collective bargaining agreements with various labor unions.

NISOURCE INC.

NiSource Inc. is an energy holding company under the Public Utility Holding Company Act of 2005 whose subsidiaries are fully regulated natural gas and electric utility companies serving approximately 4.0 million customers in seven 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 is one of the nation’s largest natural gas distribution companies, as measured by number of customers.

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 September 13, 2018, a series of fires and explosions occurred in Lawrence, Andover and North Andover, Massachusetts related to the delivery of natural gas by Columbia of Massachusetts (referred to herein as the “Greater Lawrence Incident”).

The Greater Lawrence Incident resulted in one fatality and a number of injuries, damaged multiple homes and businesses, and caused the temporary evacuation of significant portions of each municipality.

The Massachusetts Governor’s Office declared a state of emergency, authorizing the Massachusetts DPU to order another utility company to coordinate the restoration of utility services in Lawrence, Andover and North Andover.

The incident resulted in the interruption of gas for approximately 7,500 gas meters, the majority of which served residences and approximately 700 of which served businesses, and the interruption of other utility service more broadly in the area.

Columbia of Massachusetts has replaced the cast iron and bare steel gas pipeline system in the affected area and restored service to nearly all of the gas meters.

Refer to Note 6, "Goodwill and Other Intangible Assets," Note 19\-C.

"Legal Proceedings," and E.

On February 26, 2020, NiSource and Columbia of Massachusetts (together with NiSource, “Seller”) entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with Eversource, a Massachusetts voluntary association.

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 business of storing, distributing or transporting natural gas to residential, commercial and industrial customers in Massachusetts, as conducted by Columbia of Massachusetts, and Eversource agreed to assume certain liabilities of Columbia of Massachusetts and its affiliates.

The liabilities assumed by Eversource under the Asset Purchase Agreement do not include, among others, any liabilities arising out the Greater Lawrence Incident or liabilities of Columbia of Massachusetts or its affiliates pursuant to civil claims for injury of persons or damage to property to the extent such injury or damage occurs prior to the closing in connection with the Massachusetts Business.

The Asset Purchase Agreement provides for a purchase price of $1,100 million in cash, subject to adjustment based on Columbia of Massachusetts’ net working capital as of the closing.

The closing of the transactions contemplated by the Asset Purchase Agreement is subject to Hart-Scott-Rodino Antitrust Improvements Act of 1976 and regulatory approvals, resolution of certain proceedings before governmental bodies and other conditions.

For additional information, see Note 26, “Subsequent Event,” in 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 23, "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 3.5 million customers in seven states and operate approximately 60,000 miles of pipeline located in our service areas described below.

Through our wholly-owned subsidiary NiSource Gas Distribution Group, Inc., we own six distribution subsidiaries that provide natural gas to approximately 2.7 million residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland and Massachusetts.

Additionally, we distribute natural gas to approximately 839,000 customers in northern Indiana through our wholly-owned subsidiary NIPSCO.

Electric Operations

We generate, transmit and distribute electricity through our subsidiary NIPSCO to approximately 476,000 customers in 20 counties in the northern part of Indiana and engage in wholesale 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 Sugar Creek, a CCGT plant located in West Terre Haute, IN with generating capacity of 571 MW, three gas-fired generating units located at NIPSCO’s coal-fired electric generating stations with a generating capacity of 186 MW and 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 2,847 MW.

In May 2018, NIPSCO completed the retirement of two coal-burning units (Units 7 and 8) at Bailly Generating Station, located in Chesterton, IN.

These units had a generating capacity of approximately 460 MW.

We focus our business strategy on our core, rate-regulated asset-based businesses with most of our operating income generated from the rate-regulated businesses.

These units represent 2,080 MW of generating capacity, equal to 72% of NIPSCO’s remaining capacity after the retirement of Bailly Units 7 and 8 in May of 2018.

Refer to Note 19\-E, "Other Matters," in the Notes to Consolidated Financial Statements for further discussion of these plans.

Residential usage for the year ended December 31, 2019 decreased primarily due to warmer weather in our operating area compared to the prior year.

Columbia of Massachusetts received regulatory approval of a decoupling mechanism which adjusts revenues to an approved benchmark level through a volumetric adjustment factor.

Columbia of Maryland, Columbia of Virginia and Columbia of Kentucky have had approval for a weather normalization adjustment

For a description of our legal proceedings, see Note [removed: 19\-C] [added: 20-C] "Legal Proceedings" in the Notes to Consolidated Financial Statements.

[removed: FORM 10-K][added: FORM 10-K]

| | [added: | |] ☑ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) | | [added: | | | |]

For the fiscal year ended December 31, [removed: 2019][added: 2020]

| | [added: | |] ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) | | [added: | | | |]

| DE | | | [added: | | | | | |] 35-2108964 | [added: | |]

| (State or other jurisdiction of incorporation or organization) | | | [added: | | | | | |] (I.R.S. Employer Identification No.) | [added: | |]

| 801 East 86th Avenue | | | | [added: | | | | | | | |]

| Merrillville, | [added: | |] IN | | [added: | | | |] 46410 | [added: | |]

| (Address of principal executive offices) | | | [added: | | | | | |] (Zip Code) | [added: | |]

| Title of Each Class | [added: | |] Trading Symbol(s) | [added: | |] Name of Each Exchange on Which Registered | [added: | |]

| Common Stock, par value $0.01 per share | [added: | |] NI | [added: | |] NYSE | [added: | |]

| Depositary Shares, each representing a 1/1,000th ownership interest in a share of 6.50% Series B | [added: | |] NI PR B | [added: | |] NYSE | [added: | |]

| 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 | | | [added: | | | | | |]

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 [removed: $10,713,311,150] [added: $8,671,854,266] based upon the June [removed: 28, 2019,] [added: 30, 2020,] closing price of [removed: $28.80] [added: $22.74] on the New York Stock Exchange.

There were [removed: 382,263,348] [added: 391,859,711] shares of Common Stock outstanding as of February [removed: 18, 2020.][added: 9, 2021.]

[removed: Documents] [added: Documents] Incorporated by [removed: Reference][added: 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 [removed: 19, 2020.][added: 25, 2021.]

| | | [added: | | | |] Page No. | [added: | |]

| [removed: [Defined Terms](#s4066BDF0426D56079152F8FAF271685C)] [added: DEFINED TERMS] | | [removed: [3](#s4066BDF0426D56079152F8FAF271685C)] | [added: | | | | | |]

[removed: | [Part I](#s7B4C71193BCF5CA5995BB209444B69EF) | | |][added: PART I]

| Item 1. | [removed: [Business](#s424854E07E125C4084E8B6AE05C21622)] | [removed: [6](#s424854E07E125C4084E8B6AE05C21622)] | [added: [Business](#i7748a2e18a964fbf84cb747bbe17bb9c_16) | | | [6](#i7748a2e18a964fbf84cb747bbe17bb9c_16) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#sDC6D7ABCF859511B965C4821501C9446)] [added: Factors](#i7748a2e18a964fbf84cb747bbe17bb9c_19)] | [removed: [9](#sDC6D7ABCF859511B965C4821501C9446)] | [added: | [11](#i7748a2e18a964fbf84cb747bbe17bb9c_19) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#s5A9101670F0F526C81F385B9070D6C6B)] [added: Comments](#i7748a2e18a964fbf84cb747bbe17bb9c_22)] | [removed: [21](#s5A9101670F0F526C81F385B9070D6C6B)] | [added: | [24](#i7748a2e18a964fbf84cb747bbe17bb9c_22) | | |]

| Item 2. | [removed: [Properties](#s28FC711495B552AB89091D168A2D7202)] | [removed: [21](#s28FC711495B552AB89091D168A2D7202)] | [added: [Properties](#i7748a2e18a964fbf84cb747bbe17bb9c_25) | | | [24](#i7748a2e18a964fbf84cb747bbe17bb9c_25) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#s7A712B5F2B645D14B64AB43FCF1FC10C)] [added: Proceedings](#i7748a2e18a964fbf84cb747bbe17bb9c_28)] | [removed: [21](#s7A712B5F2B645D14B64AB43FCF1FC10C)] | [added: | [24](#i7748a2e18a964fbf84cb747bbe17bb9c_28) | | |]

| Item [removed: 4.] [added: 4] | [added: | |] [Mine Safety [removed: Disclosures](#s7A712B5F2B645D14B64AB43FCF1FC10C)] [added: Disclosures](#i7748a2e18a964fbf84cb747bbe17bb9c_28)] | [removed: [21](#s7A712B5F2B645D14B64AB43FCF1FC10C)] | [added: | [24](#i7748a2e18a964fbf84cb747bbe17bb9c_28) | | |]

| Item 5. | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sB947721CA55957BEB0E84CA7F1639F0F)] [added: Securities](#i7748a2e18a964fbf84cb747bbe17bb9c_34)] | [removed: [23](#sB947721CA55957BEB0E84CA7F1639F0F)] | [added: | [26](#i7748a2e18a964fbf84cb747bbe17bb9c_34) | | |]

| Item 6. | [added: | |] [Selected Financial [removed: Data](#s6B6B45C70E7355468FD7C0C2EC4262D2)] [added: Data](#i7748a2e18a964fbf84cb747bbe17bb9c_2902)] | [removed: [25](#s6B6B45C70E7355468FD7C0C2EC4262D2)] | [added: | [27](#i7748a2e18a964fbf84cb747bbe17bb9c_2902) | | |]

| Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sF421A737853D51FE9377F85BC059643C)] [added: Operations](#i7748a2e18a964fbf84cb747bbe17bb9c_40)] | [removed: [27](#sF421A737853D51FE9377F85BC059643C)] | [added: | [28](#i7748a2e18a964fbf84cb747bbe17bb9c_40) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sA1B012CD98A65BD093ACA3C4D4D91D7B)] [added: Risk](#i7748a2e18a964fbf84cb747bbe17bb9c_79)] | [removed: [49](#sA1B012CD98A65BD093ACA3C4D4D91D7B)] | [added: | [49](#i7748a2e18a964fbf84cb747bbe17bb9c_79) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#sA784B6220B385456BC834A0A6BE5B32D)] [added: Data](#i7748a2e18a964fbf84cb747bbe17bb9c_82)] | [removed: [50](#sA784B6220B385456BC834A0A6BE5B32D)] | [added: | [50](#i7748a2e18a964fbf84cb747bbe17bb9c_82) | | |]

| Item 9. | [added: | |] [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#s8C7E293A2EDB5AA6A73F143498C62F5E)] [added: Disclosure](#i7748a2e18a964fbf84cb747bbe17bb9c_280)] | [removed: [125](#s8C7E293A2EDB5AA6A73F143498C62F5E)] | [added: | [118](#i7748a2e18a964fbf84cb747bbe17bb9c_280) | | |]

| Item 9A. | [added: | |] [Controls and [removed: Procedures](#sDCE48CB7B4025F98A38F518207280701)] [added: Procedures](#i7748a2e18a964fbf84cb747bbe17bb9c_283)] | [removed: [125](#sDCE48CB7B4025F98A38F518207280701)] | [added: | [118](#i7748a2e18a964fbf84cb747bbe17bb9c_283) | | |]

| Item 9B. | [added: | |] [Other [removed: Information](#sFF7C631C56AE53ACB56D582CE6B1A497)] [added: Information](#i7748a2e18a964fbf84cb747bbe17bb9c_286)] | [removed: [126](#sFF7C631C56AE53ACB56D582CE6B1A497)] | [added: | [120](#i7748a2e18a964fbf84cb747bbe17bb9c_286) | | |]

| [Part [removed: III](#s871E554208FB5B68898A9DB6E0A5788C)] [added: III](#i7748a2e18a964fbf84cb747bbe17bb9c_289)] | | | [added: | | | | | |]

| Item 10. | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s871E554208FB5B68898A9DB6E0A5788C)] [added: Governance](#i7748a2e18a964fbf84cb747bbe17bb9c_289)] | [removed: [128](#s871E554208FB5B68898A9DB6E0A5788C)] | [added: | [121](#i7748a2e18a964fbf84cb747bbe17bb9c_289) | | |]

| Item 11. | [added: | |] [Executive [removed: Compensation](#s271AC983057F5D41B18DE52CDE6329E0)] [added: Compensation](#i7748a2e18a964fbf84cb747bbe17bb9c_292)] | [removed: [128](#s271AC983057F5D41B18DE52CDE6329E0)] | [added: | [121](#i7748a2e18a964fbf84cb747bbe17bb9c_292) | | |]

| Item 12. | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s98784DCC44535375A53D490F79109D11)] [added: Matters](#i7748a2e18a964fbf84cb747bbe17bb9c_295)] | [removed: [128](#s98784DCC44535375A53D490F79109D11)] | [added: | [121](#i7748a2e18a964fbf84cb747bbe17bb9c_295) | | |]

| Item 13. | [added: | |] [Certain Relationships and Related Transactions, and Director [removed: Independence](#sE41A6D7E99FD5F038E0C79BDD6D3BCDA)] [added: Independence](#i7748a2e18a964fbf84cb747bbe17bb9c_298)] | [removed: [128](#sE41A6D7E99FD5F038E0C79BDD6D3BCDA)] | [added: | [121](#i7748a2e18a964fbf84cb747bbe17bb9c_298) | | |]

| Item 14. | [added: | |] [Principal Accounting Fees and [removed: Services](#s97EFA9A679BA52E5B007DB40B45D74D6)] [added: Services](#i7748a2e18a964fbf84cb747bbe17bb9c_301)] | [removed: [128](#s97EFA9A679BA52E5B007DB40B45D74D6)] | [added: | [121](#i7748a2e18a964fbf84cb747bbe17bb9c_301) | | |]

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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.

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| [Part I](#i7748a2e18a964fbf84cb747bbe17bb9c_13) | | | | | | | | |

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| [Part II](#i7748a2e18a964fbf84cb747bbe17bb9c_34) | | | | | | | | |

| [Part IV](#i7748a2e18a964fbf84cb747bbe17bb9c_304) | | | | | | | | |

| Item 16. | | | [Form 10-K Summary](#i7748a2e18a964fbf84cb747bbe17bb9c_2865) | | | [128](#i7748a2e18a964fbf84cb747bbe17bb9c_2865) | | |

| [Signatures](#i7748a2e18a964fbf84cb747bbe17bb9c_310) | | | | | | [129](#i7748a2e18a964fbf84cb747bbe17bb9c_310) | | |

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| COVID-19 ("the COVID-19 pandemic" or "the pandemic") | | | | | | Novel Coronavirus 2019 | | |

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| HLBV | | | | | | Hypothetical Liquidation at Book Value | | |

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| ROE | | | | | | Return on Equity | | |

| Rosewater | | | | | | Rosewater Wind Generation LLC | | |

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| SMS | | | | | | Safety Management System | | |

| TSA | | | | | | Transition Service Agreement | | |

| VIE | | | | | | Variable Interest Entity | | |

"Exchange Act").

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.

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| [Supplemental Item. Information about our Executive Officers](#s78063F686668505A932845C49CE2FF0F) | | [22](#s78063F686668505A932845C49CE2FF0F) |

| [Part II](#sB947721CA55957BEB0E84CA7F1639F0F) | | |

| [Part IV](#s9AB477C36B3657EBB720FA19810A078D) | | |

| [Signatures](#s86CA9096A4D05E4B95BFD574B2453457) | | [134](#s86CA9096A4D05E4B95BFD574B2453457) |

| CPG (former subsidiary) | | Columbia Pipeline Group, Inc. |

| AMRP | | Accelerated Main Replacement Program |

| AMT | | Alternative Minimum Tax |

| ECT | | Environmental Cost Tracker |

| EERM | | Environmental Expense Recovery Mechanism |

| ELG | | Effluent Limitation Guidelines |

| GCR | | Gas cost recovery |

| GSEP | | Gas System Enhancement Program |

| IRIS | | Infrastructure Replacement and Improvement Surcharge |

| PISCC | | Post-in-service carrying charges |

| PTC | | Production Tax Credits |

| SAB | | Staff accounting bulletin |

| Separation | | The separation of our natural gas pipeline, midstream and storage business from our natural gas and electric utility business accomplished through a pro rata distribution to holders of our outstanding common stock of all the outstanding shares of common stock of CPG. The separation was completed on July 1, 2015. |

| WCE | | Whiting Clean Energy |

Discussed below are the principal properties held by us and our subsidiaries as of December 31, [removed: 2019.][added: 2020.]

Our principal properties and our [removed: subsidiaries] [added: subsidiaries'] principal properties are owned free from encumbrances, subject to minor exceptions, none of which are of such a nature as to impair substantially the usefulness of such properties.

| Name | | [added: | | | |] Age | | | [added: | | |] Office(s) Held in Past 5 Years | [added: | |]

| Joseph Hamrock | | [removed: 56] | | | [added: | 57 | | | | | |] President and Chief Executive Officer of NiSource since July 2015. | [added: | |]

| | | | | | [added: | | | | | | |] Executive Vice [removed: President] [added: President, Gas Business Segment] and [removed: Group] Chief [removed: Executive] [added: Customer] Officer of NiSource from May [removed: 2012] [added: 2017] to [removed: July 2015.] [added: September 2018.] | [added: | |]

| [removed: Donald E. Brown] | | [removed: 48] | | | [added: | | | | | | |] Executive Vice President of NiSource since May 2015. | [added: | |]

| | | | | | [added: | | | | | | |] Chief Financial Officer of NiSource since July 2015. | [added: | |]

| | | | | | [added: | | | | | | |] Treasurer of NiSource from July 2015 to June 2016. | [added: | |]

| [removed: Peter T. Disser] | | [removed: 51] | | | [added: | | | | | | | Executive] Vice [removed: President, Internal Audit] [added: President] of NiSource since January [removed: 2019.] [added: 2021.] | [added: | |]

| | | | | | [added: | | | | | | |] Chief [removed: Operating] [added: Restoration] Officer of NiSource from September 2018 to December 2018. | [added: | |]

| | | | | | [added: | | | | | | |] Vice [removed: President, Audit] [added: President] of NiSource from [removed: November 2017] [added: May 2018] to [removed: September] [added: December] 2018. | [added: | |]

| | | | | | [added: | | | | | | |] Vice President, [removed: Strategy] [added: Engineering] and [removed: Planning] [added: Construction] of NiSource Corporate Services Company from [removed: July 2015] [added: June 2012] to May 2016. | [added: | |]

| [removed: Carrie J. Hightman] [added: Pablo A. Vegas] | | [removed: 62] | | | [added: | 47 | | | | | |] Executive Vice [removed: President and] [added: President,] Chief [removed: Legal] [added: Operating] Officer [removed: of] [added: and President,] NiSource [removed: since 2007.] [added: Utilities.] | [added: | |]

| [removed: Kenneth] [added: Charles] E. [removed: Keener] [added: Shafer, II] | | [removed: 55] | | | [added: | 51 | | | | | |] Senior Vice President and Chief [removed: Human Resources] [added: Safety] Officer of NiSource since [removed: August] [added: October] 2019. | [added: | |]

| | | | | | [added: | | | | | | | Senior] Vice President, [removed: Talent] [added: Gas Engineering] and [removed: Organizational Effectiveness] [added: Gas Support Services] of NiSource Corporate Services Company from [removed: June 2012] [added: January 2019] to [removed: July] [added: September] 2019. | [added: | |]

| [removed: Charles E. Shafer, II] [added: Shawn Anderson] | | [removed: 50] | | | [added: | 39 | | | | | |] Senior Vice President and Chief [removed: Safety] [added: Strategy and Risk] Officer of NiSource since [removed: October 2019.] [added: June 2020.] | [added: | |]

| | | | | | [added: | | | | | | |] Senior Vice [removed: President, Gas Engineering and Gas Support Services] [added: President] of NiSource [removed: Corporate Services Company] from [removed: January] [added: September] 2019 to [removed: September 2019.] [added: January 2021.] | [added: | |]

| | | | | | [added: | | | | | | |] Senior Vice President, Customer Services and New Business of NiSource Corporate Services Company from May 2016 through December 2018. | [added: | |]

| [removed: Violet G. Sistovaris] | | [removed: 58] | | | [added: | | | | | | |] Executive Vice President [removed: and President, NIPSCO] of NiSource since July 2015. | [added: | |]

| | | | | | [removed: Senior Vice President] [added: | | | | | | | Treasurer] and Chief [removed: Information] [added: Risk] Officer of NiSource from [removed: May 2014 to] June [removed: 2015.] [added: 2016 to May 2020.] | [added: | |]

| | | | | | [removed: Vice] [added: | | | | | | |] President, [removed: Audit] [added: NIPSCO] of NiSource from July 2015 to [removed: November 2017.] [added: May 2020.] | [added: | |]

| | | | | | [removed: Executive Vice President and] [added: | | | | | | |] President, Columbia Gas [removed: Group] [added: Group, of NiSource] from May 2016 to May 2017. | [added: | |]

| | | | | | [added: | | | | | | |] President and Chief Operating Officer of American Electric Power Company of Ohio from May 2012 to May 2016. | [added: | |]

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| Donald E. Brown | | | | | | 49 | | | | | | Executive Vice President, Chief Financial Officer and President, NiSource Corporate Services. | | |

| | | | | | | | | | | | | President, NiSource Corporate Services since June 2020. | | |

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| Anne-Marie W. D'Angelo | | | | | | 44 | | | | | | Executive Vice President, General Counsel and Corporate Secretary. | | |

| | | | | | | | | | | | | Corporate Secretary and General Counsel of NiSource since September 2019. | | |

| | | | | | | | | | | | | General Counsel of Global Brass & Copper Inc. from May 2017 to August 2019. | | |

| | | | | | | | | | | | | Assistant General Counsel of McDonald’s USA from January 2015 to May 2017. | | |

| | | | | | | | | | | | | Vice President, Strategy of NiSource from January 2019 to May 2020. | | |

| | | | | | | | | | | | | Vice President, Regulatory Affairs and Financial of Columbia of Ohio from July 2015 to June 2016. | | |

| Violet G. Sistovaris | | | | | | 59 | | | | | | Executive Vice President and Chief Experience Officer. | | |

| | | | | | | | | | | | | Chief Experience Officer of NiSource since June 2020. | | |

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| | | | | | | | | | | | | Executive Vice President of NiSource since May 2016. | | |

| | | | | | | | | | | | | Chief Operating Officer and President, NiSource Utilities of NiSource since June 2020. | | |

| | | | | | | | | | | | | President, Gas Utilities of NiSource from January 2019 to May 2020. | | |

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| | | | | | Vice President and Chief Financial Officer of UGI Utilities, a division of UGI Corporation (gas and electric utility company) from 2010 to March 2015. |

| | | | | | Vice President, Planning and Analysis of NiSource from June 2016 to November 2017. |

| | | | | | Chief Financial Officer of NIPSCO from 2012 to June 2015. |

| | | | | | Vice President, Engineering and Construction of NiSource Corporate Services Company from June 2012 to May 2016. |

| Suzanne K. Surface | | 55 | | | Chief Services Officer of NiSource since January 2019. |

| | | | | | Vice President, Audit of NiSource from September 2018 to December 2018. |

| | | | | | Vice President, Transformation Office of NiSource from August 2018 to September 2018. |

| | | | | | Vice President, Corporate Services Customer Value of NiSource from November 2017 to August 2018. |

| | | | | | Vice President, Regulatory Strategy and Support of NiSource Corporate Services Company from July 2009 to June 2015. |

| Pablo A. Vegas | | 46 | | | Executive Vice President and President, Gas Utilities of NiSource since January 2019. |

| | | | | | Executive Vice President and Chief Restoration Officer of NiSource from September 2018 to December 2018. |

| | | | | | Executive Vice President, Gas Business Segment and Chief Customer Officer of NiSource from May 2017 to September 2018. |

At its January [removed: 31, 2020] [added: 27, 2021] meeting, the Board declared a quarterly common dividend of [removed: $0.21] [added: $0.22] per share, payable on February [removed: 20, 2020] [added: 19, 2021] to holders of record on February [removed: 11, 2020.][added: 9, 2021.]

As of February [removed: 18, 2020,] [added: 9, 2021,] NiSource had [removed: 18,868] [added: 18,211] common stockholders of record and [removed: 382,263,348] [added: 391,859,711] shares outstanding.

[removed: ][added: ]

The total shareholder return for NiSource common stock and the two indices is calculated from an assumed initial investment of $100 and assumes dividend [removed: reinvestment, including the impact of the distribution of CPG common stock in the Separation.][added: reinvestment.]

Purchases of Equity Securities by Issuer and Affiliated Purchasers. For the three months ended December 31, 2020, no equity securities that are registered by NiSource Inc. pursuant to Section 12 of the Securities Exchange Act of 1934 were purchased by or on behalf of us or any of our affiliated purchasers.

NISOURCE INC.

On July 1, 2015, NiSource completed the Separation.

Following the Separation, NiSource retained no ownership interest in CPG.

The Separation is treated as a special dividend for purposes of calculating the total shareholder return, with the then-current market value of the distributed shares being deemed to have been reinvested on the Separation date in shares of NiSource common stock.

A vertical line is included on the graph below to identify the periods before and after the Separation.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

[removed: The selected data presented below as] [added: A summary] of [removed: and] [added: our consolidated financial results] for the [removed: five] years ended December 31, [removed: 2019,] [added: 2020, 2019 and 2018,] are [removed: derived from our Consolidated Financial Statements.][added: presented below:]

| Year Ended December [removed: 31, (*in millions] [added: 31*,* *(in millions,] except per share [removed: data*)] [added: amounts)*] | [removed: 2019] | | [added: 2020] | | [added: | | | | 2019 | | | | | |] 2018 | | | | [removed: 2017] | | [added: 2020 vs. 2019] | | [removed: 2016] | | | | [removed: 2015] [added: 2019 vs. 2018] | | |

| [removed: Net] [added: Net] Income (Loss) Available to Common [removed: Shareholders] [added: Shareholders] | [removed: 328.0] | | [added: (72.7)] | | [removed: (65.6] | | [removed: )] | | [removed: 128.5] [added: 328.0] | | | | [removed: 331.5] | | [added: (65.6)] | | [removed: 198.6] | | | [added: | (400.7) | | | | | | 393.6 | | |]

| Basic Earnings (Loss) Per Share [removed: ($)] | [added: | |] $ | [removed: 0.88] [added: (0.19)] | | | [added: | |] $ | [removed: (0.18] [added: 0.88] | [removed: )] | | [added: | |] $ | [removed: 0.39] [added: (0.18)] | | | [added: | |] $ | [removed: 1.02] [added: (1.07)] | | | [added: | |] $ | [removed: 0.63] [added: 1.06] | |

| [removed: Other Data:] [added: Other] | | | [added: 3] | | | | | | [added: 3] | | | | | | [added: 3] | | | | | [added: | — | | | | | | — | | |]

[removed: ITEM 6.][added: Item 1A.]

| Index | [added: | |] Page | [added: | |]

| [removed: Executive Summary] [added: [Executive Summary](#i7748a2e18a964fbf84cb747bbe17bb9c_43)] | [removed: [27](#s2532FF0E61E65C7EB221448E402A5DA0)] | [added: | [28](#i7748a2e18a964fbf84cb747bbe17bb9c_43) | | |]

| [removed: Summary] [added: [Summary] of Consolidated Financial [removed: Results] [added: Results](#i7748a2e18a964fbf84cb747bbe17bb9c_49)] | [removed: [29](#s764B9BC9073E592FBD6D05D47733B3A3)] | [added: | [30](#i7748a2e18a964fbf84cb747bbe17bb9c_49) | | |]

| [removed: Results] [added: [Results] and Discussion of Segment [removed: Operations] [added: Operations](#i7748a2e18a964fbf84cb747bbe17bb9c_52)] | [removed: [31](#sB4991AC034465F40833F73A1B95236E7)] | [added: | [31](#i7748a2e18a964fbf84cb747bbe17bb9c_52) | | |]

| Gas Distribution Operations | [removed: [32](#sA9893B55640C5BA099B40F602736CA27)] | [added: | | | | | | | | | | | | | | | |]

| Electric Operations | [removed: [36](#s09294C9397CE5612A5485D10BC79B9E1)] | [added: | | | | | | | | | | | | | | | |]

| [Liquidity and Capital [removed: Resources](#s30DB54972D3352E29647973E385C14E6)] [added: Resources](#i7748a2e18a964fbf84cb747bbe17bb9c_67)] | [removed: [40](#s30DB54972D3352E29647973E385C14E6)] | [added: | [40](#i7748a2e18a964fbf84cb747bbe17bb9c_67) | | |]

| [Off Balance [removed: Sheet](#s8B1861DD526D5206BBFF8914C1977ADF)] [added: Sheet](#i7748a2e18a964fbf84cb747bbe17bb9c_70)] Arrangements | [removed: [44](#s8B1861DD526D5206BBFF8914C1977ADF)] | [added: | [45](#i7748a2e18a964fbf84cb747bbe17bb9c_70) | | |]

| [Market Risk [removed: Disclosures](#s6347D3A48E785A5A8AA90A7DD7EB08A1)] [added: Disclosures](#i7748a2e18a964fbf84cb747bbe17bb9c_73)] | [removed: [44](#s6347D3A48E785A5A8AA90A7DD7EB08A1)] | [added: | [45](#i7748a2e18a964fbf84cb747bbe17bb9c_73) | | |]

| [Other [removed: Information](#sCB12FDE8425053A68298F5BC7C451E6D)] [added: Information](#i7748a2e18a964fbf84cb747bbe17bb9c_76)] | [removed: [45](#sCB12FDE8425053A68298F5BC7C451E6D)] | [added: | [46](#i7748a2e18a964fbf84cb747bbe17bb9c_76) | | |]

We are an energy holding company under the Public Utility Holding Company Act of 2005 whose subsidiaries are fully regulated natural gas and electric utility companies serving customers in [removed: seven] [added: six] states.

We generate substantially all of our operating income through these rate-regulated [removed: businesses] [added: businesses,] which are summarized for financial reporting purposes into two primary reportable segments: Gas Distribution Operations and Electric Operations.

Refer to the “Business” section under Item 1 of this annual report and Note [removed: 23,] [added: 24,] "Segments of Business," in the Notes to Consolidated Financial Statements for further discussion of our regulated utility business segments.

Our goal is to develop strategies that benefit all stakeholders as we [added: (i)] address changing customer conservation patterns, [removed: develops] [added: (ii) develop] more contemporary pricing [removed: structures] [added: structures,] and [removed: embarks] [added: (iii) embark] on long-term infrastructure investment and safety programs.

These strategies [removed: are intended to improve] [added: focus on improving] reliability and safety, [removed: enhance] [added: enhancing] customer [removed: services] [added: service, lowering customer bills] and [removed: reduce] [added: reducing] emissions while generating sustainable returns.

Refer also to the [removed: discussion of] *Electric Supply* [removed: within] [added: section of] our Electric Operations Segment discussion for additional information on our long term electric generation strategy.

[removed: Other Matters - Greater Lawrence Pipeline Replacement,"] [added: For additional information, see Note 20-E, "Other Matters,"] in the Notes to Consolidated Financial Statements.

| *(in millions)* | [removed: December 31, 2018] | | [added: 2020] | | [removed: December 31, 2019] | | | [removed: Incident to Date] | [added: 2019] | | [added: | | | | 2018(3) | | |]

[removed: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION] [added: RESULTS] AND [removed: RESULTS] [added: DISCUSSION] OF [removed: OPERATIONS (continued)][added: OPERATIONS]

[removed: Since the Greater Lawrence Incident and through December 31, 2019, we have] [added: We] invested approximately $258 million of capital spend for [removed: the] [added: specific] pipeline [removed: replacement; this] [added: replacement] work [added: that] was completed in 2019.

[added: In 2019,] Columbia of Massachusetts [removed: has] filed a proof of loss with its property insurer for [removed: the full cost of the] [added: this] pipeline [removed: replacement.][added: replacement work.]

[removed: Legal Proceedings"] [added: "Legal Proceedings,"] and [removed: " - E.][added: Note 20-E.]

[removed: Other] [added: "Legal Proceedings" and Note 20-E "Other] Matters," in the Notes to Consolidated Financial Statements, "Summary of Consolidated Financial Results," "Results and Discussion of Segment Operation - Gas Distribution Operations," and "Liquidity and Capital Resources" in this Management's Discussion for additional information related to the Greater Lawrence Incident.

Columbia of Massachusetts Asset Sale: On February 26, 2020, NiSource and Columbia of Massachusetts entered into [removed: the] [added: an] Asset Purchase Agreement with [removed: Eversource.][added: Eversource (the "Asset Purchase Agreement").]

Upon the terms and subject to the conditions set forth in the Asset Purchase Agreement, [removed: NiSource and Columbia of Massachusetts agreed to sell to Eversource] [added: we sold] the Massachusetts Business [added: to Eversource] for [removed: a purchase price] [added: net proceeds] of [removed: $1,100 million,] [added: approximately $1,113 million in cash,] subject to [removed: adjustment.][added: adjustment for the final working capital amount.]

For additional information, see Note [removed: 26, “Subsequent Event,”] [added: 20-C, "Legal Proceedings" and Note 20-E "Other Matters,"] in the Notes to Consolidated Financial Statements.

Cost of [removed: sales] [added: energy] for the Gas Distribution Operations segment is principally comprised of the cost of natural gas used while providing transportation and distribution services to customers.

Cost of [removed: sales] [added: energy] for the Electric Operations segment is [added: principally] comprised of the cost of coal, related handling costs, natural gas purchased for [removed: the] internal generation of electricity at [removed: NIPSCO] [added: NIPSCO,] and the cost of power purchased from third-party generators of electricity.

The majority of the [removed: cost] [added: costs] of [removed: sales] [added: energy in both segments] are tracked costs that are passed through directly to the [removed: customer] [added: customer,] resulting in an equal and offsetting amount reflected in operating revenues.

| Year Ended December [removed: 31*, (in] [added: 31, *(in] millions)* | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | | [removed: 2019 vs.] [added: | |] 2018 | | | | [removed: 2018] [added: | | 2020] vs. [removed: 2017] [added: 2019] | | | [added: | | | 2019 vs. 2018 | | |]

| Operating Income | [removed: $] | [removed: 890.7] | [added: 550.8] | | [removed: $] | [added: | | | 890.7 | | | | | |] 124.7 | | | [removed: $] | [removed: 921.2] | | [added: (339.9)] | [removed: $] | [removed: 766.0] | | | [removed: $] | [removed: (796.5] [added: 766.0] | [removed: )] | [added: |]

| Year Ended December [removed: 31*, (in millions, except per share amounts)*] [added: 31, *(in millions)*] | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | | [removed: 2019 vs.] [added: | |] 2018 | | | | [removed: 2018] [added: | | 2020] vs. [removed: 2017] [added: 2019] | | | [added: | | | 2019 vs. 2018 | | |]

| [removed: Operating Revenues] [added: Operating Revenues] | [added: | |] $ | [removed: 5,208.9] [added: 4,681.7] | | | [added: | |] $ | [removed: 5,114.5] [added: 5,208.9] | | | [added: | |] $ | [removed: 4,874.6] [added: 5,114.5] | | | [added: | |] $ | [removed: 94.4] [added: (527.2)] | | | [added: | |] $ | [removed: 239.9] [added: 94.4] | |

| Other Operating Expenses | [removed: 2,783.4] | | [added: 3,021.6] | | [added: | | | | 2,783.4 | | | | | |] 3,228.5 | | | | [removed: 2,434.7] | | [added: 238.2] | | [removed: (445.1] | | [removed: )] | | [removed: 793.8] [added: (445.1)] | | |

None.

On November 19, 2020, the SEC issued amendments to streamline and enhance certain financial disclosure requirements in Regulation S-K.

These changes are effective for annual filings for the first fiscal year ending on or after August 9, 2021.

Early adoption is permitted for companies after February 10, 2021, and companies are permitted to selectively early adopt the provisions of the final rules, provided an amended item is adopted in its entirety.

We early adopted the amendments to Item 301 in their entirety, which removed the requirement to furnish selected financial data for each of the last five fiscal years.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

The sale was approved by the Massachusetts DPU on October 7, 2020, and closed on October 9, 2020.

As a result of the sale, we have transitioned to executing a TSA with Eversource.

Your Energy, Your Future: Our plan to replace 80% of our coal generation capacity by the end of 2023 and all of our coal generation by the end of 2028 with primarily renewable resources is well underway.

In October 2020, we executed three BTAs for 900 MW solar nameplate capacity and 135 MW of storage capacity.

In December 2020, the formation of the Rosewater Wind Generation joint venture, one of our previously executed BTAs, was completed, and has begun operation.

We executed in December 2020 a PPA for an additional 280 MW of solar nameplate capacity.

These projects were selected following a comprehensive review of bids submitted through the RFP process that NIPSCO underwent in late 2019.

The projects complement previously executed BTAs and PPAs with a combined nameplate capacity of 400 MW and 1,300 MW, respectively.

For additional information, see Note 4 "Variable Interest Entities" and "Results and Discussion of Segment Operation - Electric Operations," in this Management's Discussion.

NiSource Next: We have launched a comprehensive, multi-year program designed to deliver long-term safety, sustainable capability enhancements and cost optimization improvements.

This program will advance the high priority we place on safety and risk mitigation, further enable our safety management system ("SMS"), and enhance the customer experience.

NiSource Next is designed to (i) leverage our current scale, (ii) utilize technology, (iii) define clear roles and accountability with our leaders and employees, and (iv) standardize our processes to focus on operational rigor, quality management and continuous improvement.

An initial step in this program was the voluntary separation program announced in August 2020, with an expected total severance expense of approximately $38.0 million.

The majority of these separation costs will be expensed in 2020 and approximately $21.2 million has been paid as of December 31, 2020.

The NiSource Next initiative, along with the sale of the Massachusetts Business, is projected to achieve a reduction in ongoing operation and maintenance costs by approximately 8% in 2021 compared to 2020.

COVID-19: The safety of our employees and customers, while providing essential services during the COVID-19 pandemic, continues to be a key area of focus.

Since March 2020, we have taken a proactive, coordinated approach intended to prevent, mitigate and respond to the pandemic, by utilizing our Incident Command System (ICS).

The ICS includes members of our executive leadership team, a medical review professional, and members of functional teams from across our company.

The ICS monitors state-by-state conditions and determines steps to conduct our operations safely for employees and customers.

We have implemented procedures designed to protect our employees who work in the field and who continue to work in operational and corporate facilities, including social distancing, wearing face coverings, temperature checks and more frequent cleaning of equipment and facilities.

We have also implemented work-from-home policies and practices.

We have minimized non-essential work that requires an employee to enter a customer premise and limited company vehicle occupancy to one person, where possible.

We continue to employ physical and cybersecurity measures to ensure that our operational and support systems remain functional.

Our actions to date have mitigated the spread of COVID-19 amongst our employees and principal field contractors.

We will continue to follow CDC guidance and implement safety measures intended to ensure employee and customer safety during this pandemic.

We are following all federal, state and local guidelines related to the COVID-19 vaccinations and will encourage employees to receive the vaccine when it is available to them.

Since the beginning of the pandemic, we have been helping our customers navigate this challenging time.

We suspended disconnections soon after this outbreak began.

As of December 2020, suspension of disconnections has been lifted in some, but not all, of our jurisdictions.

We plan to continue our payment assistance programs across all of our operating territory to help customers deal with the impact of the pandemic.

Additionally, we continue to have dialogue with the state regulatory commissions for each of our operating companies regarding the pandemic.

Regulatory deferrals for certain costs have been allowed by all of our state regulatory commissions.

Costs approved for deferral vary by state.

NISOURCE INC.

The data should be read together with the Consolidated Financial Statements including the related notes thereto included in Item 8 of this Form 10-K.

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Statement of Income Data: | | | | | | | | | | | | | | | | | | | |

| Total Operating Revenues | $ | 5,208.9 | | | $ | 5,114.5 | | | $ | 4,874.6 | | | $ | 4,492.5 | | | $ | 4,651.8 | |

| Balance Sheet Data: | | | | | | | | | | | | | | | | | | | |

| Total Assets | 22,659.8 | | | | 21,804.0 | | | | 19,961.7 | | | | 18,691.9 | | | | 17,492.5 | | |

| Capitalization | | | | | | | | | | | | | | | | | | | |

| Stockholders’ equity | 5,986.7 | | | | 5,750.9 | | | | 4,320.1 | | | | 4,071.2 | | | | 3,843.5 | | |

| Long-term debt, excluding amounts due within one year | 7,856.2 | | | | 7,105.4 | | | | 7,512.2 | | | | 6,058.2 | | | | 5,948.5 | | |

| Total Capitalization | $ | 13,842.9 | | | $ | 12,856.3 | | | $ | 11,832.3 | | | $ | 10,129.4 | | | $ | 9,792.0 | |

| Per Share Data: | | | | | | | | | | | | | | | | | | | |

| Diluted Earnings (Loss) Per Share ($) | $ | 0.87 | | | $ | (0.18 | ) | | $ | 0.39 | | | $ | 1.01 | | | $ | 0.63 | |

| Dividends declared per common share ($) | $ | 0.80 | | | $ | 0.78 | | | $ | 0.70 | | | $ | 0.64 | | | $ | 0.83 | |

| Common shares outstanding at the end of the year (in thousands) | 382,136 | | | | 372,363 | | | | 337,016 | | | | 323,160 | | | | 319,110 | | |

| Number of common stockholders | 18,725 | | | | 19,889 | | | | 21,009 | | | | 22,272 | | | | 30,190 | | |

| Dividends declared per Series A preferred share ($) | $ | 56.50 | | | $ | 28.88 | | | $ | — | | | $ | — | | | $ | — | |

| Dividends declared per Series B preferred share ($) | $ | 1,674.65 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |

| Capital expenditures | $ | 1,867.8 | | | $ | 1,814.6 | | | $ | 1,753.8 | | | $ | 1,490.4 | | | $ | 1,367.5 | |

| Number of employees | 8,363 | | | | 8,087 | | | | 8,175 | | | | 8,007 | | | | 7,596 | | |

| | |

| --- | --- |

| • | During 2019, we recorded a loss of approximately $284 million for third-party claims and approximately $154 million for other incident-related expenses in connection with the Greater Lawrence Incident. Columbia of Massachusetts recorded $665 million for insurance recoveries through December 31, 2019. For additional information, see Note 19-C, "Legal Proceedings," and E, "Other Matters" in the Notes to Consolidated Financial Statements. |

| • | During the fourth quarter of 2019, we recorded an impairment charge of $204.8 million for goodwill and an impairment charge of $209.7 million for franchise rights, in each case related to Columbia of Massachusetts. For additional information, see Note 6, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements. |

| • | During the third quarter of 2019, we closed our placement of $750.0 million of 2.95% senior unsecured notes maturing in 2029. |

| • | During the second quarter of 2018, we completed the sale of 24,964,163 shares of $0.01 par value common stock at a price of $24.28 per share in a private placement to selected institutional and accredited investors and issued 400,000 shares of Series A preferred stock resulting in $400.0 million of gross proceeds or $393.9 million of net proceeds, after deducting commissions and sales expenses. Additionally, in the fourth quarter of 2018, we issued 20,000 shares of Series B preferred stock resulting in $500.0 million of gross proceeds or $486.1 million of net proceeds, after deducting commissions and sales expenses. |

| • | During 2018, we recorded a loss of approximately $757 million for third-party claims and approximately $266 million for other incident-related expenses in connection with the Greater Lawrence Incident. Columbia of Massachusetts recorded $135 million for insurance recoveries through December 31, 2018. For additional information, see Note 19-C, "Legal Proceedings," and E, Other Matters." in the Notes to Consolidated Financial Statements. |

| • | During the second quarter of 2018, we executed a tender offer for $209.0 million of outstanding notes consisting of a combination of our 6.80% notes due 2019, 5.45% notes due 2020 and 6.125% notes due 2022. During the third quarter of 2018, we redeemed $551.1 million of outstanding notes representing the remainder of our 6.80% notes due 2019, 5.45% notes due 2020 and 6.125% notes due 2022. In conjunction with our debt retired, we recorded a $45.5 million loss on early extinguishment of long-term debt primarily attributable to early redemption premiums. |

SELECTED FINANCIAL DATA

| • | The decrease in net income during 2017 was due primarily to increased tax expense as a result of the impact of adopting the provisions of the TCJA and a loss on early extinguishment of long-term debt, as discussed below. |

| • | During the second quarter of 2017, we executed a tender offer for $990.7 million of outstanding notes consisting of a combination of our 6.40% notes due 2018, 6.80% notes due 2019, 5.45% notes due 2020, and 6.125% notes due 2022. In conjunction with the debt retired, we recorded a $111.5 million loss on early extinguishment of long-term debt, primarily attributable to early redemption premiums. |

| • | Prior to the Separation, CPG closed the placement of $2,750.0 million in aggregate principal amount of senior notes. Using the proceeds from this offering, CPG made cash payments to us representing the settlement of inter-company borrowings and the payment of a one-time special dividend. In May 2015, using proceeds from the cash payments from CPG, we settled two bank term loans in the amount of $1,075.0 million and executed a tender offer for $750.0 million consisting of a combination of its 5.25% notes due 2017, 6.40% notes due 2018 and 4.45% notes due 2021. In conjunction with the debt retired, we recorded a $97.2 million loss on early extinguishment of long-term debt, primarily attributable to early redemption premiums. |

ITEM 7.

Greater Lawrence Incident: The Greater Lawrence Incident occurred on September 13, 2018.

The following table summarizes expenses incurred and insurance recoveries recorded since the Greater Lawrence Incident.

The amounts set forth in the table below do not include the capital cost of the pipeline replacement described below and as set forth in Note 19, "Other Commitments and Contingencies - E.

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | Year Ended | | | | Year Ended | | | | | |

| *(in millions)* | | | | | | [removed: | | | | | |]

[removed: Additional Regulatory Matters][added: Regulatory Matters]

The order allows for the recovery of and on the net book value of the [removed: units] [added: station] by the end of 2032.

We are exposed to certain risks [removed: relating] [added: related] to [added: our] ongoing business operations; namely commodity price risk and interest rate risk.

| [added: At] December 31, *(in millions)* | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | [added: | 2019 | | |]

| Risk Management Assets - Current(1) | | | | | | | | [added: | | | |]

| Interest rate risk programs | [added: | |] $ | — | | | [added: | |] $ | — | |

| Commodity price risk programs | [removed: 0.6] | | [added: 10.4] | | [removed: 1.1] | | | [added: | 0.6 | | |]

| Total | [added: | |] $ | [removed: 0.6] [added: 10.4] | | | [added: | |] $ | [removed: 1.1] [added: 0.6] | |

| Risk Management Assets - Noncurrent(2) | | | | | | | | [added: | | | |]

| Interest rate risk programs | [added: | |] $ | — | | | [added: | |] $ | [removed: 18.5] [added: —] | |

| Commodity price risk programs | [removed: 3.8] | | [added: 2.8] | | [removed: 4.4] | | | [added: | 3.8 | | |]

| Total | [added: | |] $ | [removed: 3.8] [added: 2.8] | | | [added: | |] $ | [removed: 22.9] [added: 3.8] | |

| Risk Management Liabilities - [removed: Current(3)] [added: Current] | | | | | | | | [added: | | | |]

| Commodity price risk programs | [removed: 12.6] | | [added: 7.3] | | [removed: 5.0] | | | [added: | 12.6 | | |]

| Total | [added: | |] $ | [removed: 12.6] [added: 78.2] | | | [added: | |] $ | [removed: 5.0] [added: 12.6] | |

| Risk Management Liabilities - Noncurrent | | | | | | | | [added: | | | |]

| Interest rate risk programs | [added: | |] $ | [removed: 76.2] [added: 99.5] | | | [added: | |] $ | [removed: 9.5] [added: 76.2] | |

| Commodity price risk programs | [removed: 57.8] | | [added: 45.1] | | [removed: 37.2] | | | [added: | 57.8 | | |]

| Total | [added: | |] $ | [removed: 134.0] [added: 144.6] | | | [added: | |] $ | [removed: 46.7] [added: 134.0] | |

[removed: (3)Presented in] [added: Such balances are presented within] "Other accruals" on the Consolidated Balance Sheets.

The term of these instruments range from five to [removed: ten] [added: 10] years and is limited to [removed: twenty percent] [added: 20%] of NIPSCO’s average annual GCA purchase volume.

As of December 31, [removed: 2019,] [added: 2020,] we have [added: two] forward-starting interest rate swaps with an aggregate notional value totaling $500.0 million to hedge the variability in cash flows attributable to changes in the benchmark interest rate during the periods from the effective dates of the swaps to the anticipated dates of forecasted debt issuances, which are expected to take place by the end of 2024.

The [removed: effective portions of the] gains and losses related to these swaps are recorded to AOCI and [removed: are] [added: will be] recognized in "Interest expense, net" concurrently with the recognition of interest expense on the associated debt, once issued.

As part of the transactions, the associated net unrealized gain of $46.2 million was recognized immediately in "Other, net" [removed: on] [added: in] the Statements of Consolidated Income (Loss) [removed: due to the probability associated with] [added: as it became probable] the forecasted borrowing transactions [added: would] no longer [removed: occurring.][added: occur.]

There were no amounts excluded from effectiveness testing for derivatives in cash flow hedging relationships at December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017.][added: 2018.]

Our derivative instruments measured at fair value as of December 31, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] do not contain any credit-risk-related contingent features.

[added: Income Tax Expense.] The components of income tax expense (benefit) were as follows:

| Year Ended December 31, *(in millions)* | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | [added: | | | 2018 | | |]

| Income Taxes | | | | | | | | | | | | [added: | | | | | |]

| Current | | | | | | | | | | | | [added: | | | | | |]

| Federal | [added: | |] $ | [removed: —] [added: 0.2] | | | [added: | |] $ | — | | | [added: | |] $ | — | |

| State | [removed: 5.2] | | [added: 11.7] | | [removed: 8.2] | | | | [removed: 7.8] [added: 5.2] | | | [added: | | | 8.2 | | |]

| Total Current | [removed: 5.2] | | [added: 11.9] | | [removed: 8.2] | | | | [removed: 7.8] [added: 5.2] | | | [added: | | | 8.2 | | |]

| Deferred | | | | | | | | | | | | [added: | | | | | |]

| Federal | [removed: 110.7] | | [added: (0.4)] | | [removed: (209.4] | | [removed: )] | | [removed: 302.7] [added: 110.7] | | | [added: | | | (209.4) | | |]

| State | [removed: 9.0] | | [added: (27.4)] | | [removed: 22.2] | | | | [removed: 5.0] [added: 9.0] | | | [added: | | | 22.2 | | |]

| Total Deferred | [removed: 119.7] | | [added: (27.8)] | | [removed: (187.2] | | [removed: )] | | [removed: 307.7] [added: 119.7] | | | [added: | | | (187.2) | | |]

| Deferred Investment Credits | [removed: (1.4] | | [removed: )] [added: (1.2)] | | [removed: (1.0] | | [removed: )] | | [removed: (1.0] [added: (1.4)] | | [removed: )] | [added: | | | (1.0) | | |]

| Income Taxes | [added: | |] $ | [removed: 123.5] [added: (17.1)] | | | [added: | |] $ | [removed: (180.0] [added: 123.5] | [removed: )] | | [added: | |] $ | [removed: 314.5] [added: (180.0)] | |

STATEMENTS OF CONSOLIDATED STOCKHOLDERS’ EQUITY

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| *(in millions)* | | | Common Stock | | | | | | Preferred Stock(1) | | | | | | Treasury Stock | | | | | | Additional Paid-In Capital | | | | | | Retained Deficit | | | | | | Accumulated Other Comprehensive Loss | | | | | | Noncontrolling Interest in Consolidated Subsidiaries | | | | | | Total | | |

| Balance as of January 1, 2018 | | | $ | 3.4 | | | | | $ | — | | | | | $ | (95.9) | | | | | $ | 5,529.1 | | | | | $ | (1,073.1) | | | | | $ | (43.4) | | | | | $ | — | | | | | $ | 4,320.1 | |

| Comprehensive Loss: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net Loss | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (50.6) | | | | | | — | | | | | | — | | | | | | (50.6) | | |

| Other comprehensive income, net of tax | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 15.7 | | | | | | — | | | | | | 15.7 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Dividends | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Common stock ($0.78 per share) | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (273.5) | | | | | | — | | | | | | — | | | | | | (273.5) | | |

| Preferred stock ($28.88 per share) | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (11.6) | | | | | | — | | | | | | — | | | | | | (11.6) | | |

| Treasury stock acquired | | | — | | | | | | — | | | | | | (4.0) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (4.0) | | |

| Cumulative effect of change in accounting principle | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9.5 | | | | | | (9.5) | | | | | | — | | | | | | — | | |

| Stock issuances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Common stock - private placement | | | 0.3 | | | | | | — | | | | | | — | | | | | | 599.3 | | | | | | — | | | | | | — | | | | | | — | | | | | | 599.6 | | |

| Preferred stock | | | — | | | | | | 880.0 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 880.0 | | |

| Employee stock purchase plan | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |

| Long-term incentive plan | | | — | | | | | | — | | | | | | — | | | | | | 15.4 | | | | | | — | | | | | | — | | | | | | — | | | | | | 15.4 | | |

| 401(k) and profit sharing | | | — | | | | | | — | | | | | | — | | | | | | 21.8 | | | | | | — | | | | | | — | | | | | | — | | | | | | 21.8 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| ATM Program | | | 0.1 | | | | | | — | | | | | | — | | | | | | 232.4 | | | | | | — | | | | | | — | | | | | | — | | | | | | 232.5 | | |

| Balance as of December 31, 2018 | | | $ | 3.8 | | | | | $ | 880.0 | | | | | $ | (99.9) | | | | | $ | 6,403.5 | | | | | $ | (1,399.3) | | | | | $ | (37.2) | | | | | $ | — | | | | | $ | 5,750.9 | |

| Comprehensive Income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net Income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 383.1 | | | | | | — | | | | | | — | | | | | | 383.1 | | |

| Other comprehensive loss, net of tax | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (55.4) | | | | | | — | | | | | | (55.4) | | |

| Dividends | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Common stock ($0.80 per share) | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (298.5) | | | | | | — | | | | | | — | | | | | | (298.5) | | |

| Preferred stock (See Note 13) | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (56.1) | | | | | | — | | | | | | — | | | | | | (56.1) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Stock issuances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Employee stock purchase plan | | | — | | | | | | — | | | | | | — | | | | | | 5.6 | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.6 | | |

| Long-term incentive plan | | | — | | | | | | — | | | | | | — | | | | | | 10.4 | | | | | | — | | | | | | — | | | | | | — | | | | | | 10.4 | | |

| 401(k) and profit sharing | | | — | | | | | | — | | | | | | — | | | | | | 17.6 | | | | | | — | | | | | | — | | | | | | — | | | | | | 17.6 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| ATM Program | | | — | | | | | | — | | | | | | — | | | | | | 229.1 | | | | | | — | | | | | | — | | | | | | — | | | | | | 229.1 | | |

| Balance as of December 31, 2019 | | | $ | 3.8 | | | | | $ | 880.0 | | | | | $ | (99.9) | | | | | $ | 6,666.2 | | | | | $ | (1,370.8) | | | | | $ | (92.6) | | | | | $ | — | | | | | $ | 5,986.7 | |

federally mandated costs of the approved compliance project by more than twenty-five percent shall require specific justification by NIPSCO and specific approval by the IURC before being authorized in the next general rate case.

Columbia of Massachusetts, GSEP - On July 7, 2014, the Governor of Massachusetts signed into law Chapter 149 of the Acts of 2014, an Act Relative to Natural Gas Leaks (“the Act”).

Adopted into the Massachusetts Utility Provisions, G.L. c.

164, § 145, the Act authorizes natural gas distribution companies to file a GSEP for capital investments made on or after January 1, 2015, that are not included in the company’s current rate base as determined in the most recent base rate case, with the Massachusetts DPU to (1) address the replacement or improvement of existing aging natural gas pipeline infrastructure to improve public safety or infrastructure reliability, and (2) reduce the lost and unaccounted for natural gas through a reduction in natural gas system leaks.

In addition, the Act provides that the Massachusetts DPU may, after review of the plan, allow the proposed estimated costs of the plan into rates as of May 1 of the subsequent year.

Recoverable costs include a return on investment, depreciation and property taxes, offset by identified operations and maintenance cost savings.

Beginning with the 2019 GSEP, rates are subject to a capped annual revenue increase of three percent of total annual firm delivery revenues, plus imputed gas revenues for sales and transportation customers, calculated as the product of (1) the historical average cost of gas per therm, and (2) the average weather normalized sales, for the period beginning with 2013 and ending with the most recent year that actual data is available at the time of the October GSEP Plan filing, per the Massachusetts DPU order in Columbia of Massachusetts' 2019 GSEP.

Prior to the 2019 GSEP, the annual revenue increase was capped at one and a half percent.

At the end of each 12-month period, in May of the subsequent year, Columbia of Massachusetts must file a reconciliation of the amount collected and actual costs.

Any over-collection or under-collection balance is passed back to, or recovered from, customers through the surcharge over a 12-month period beginning in November.

On October 31, 2019, the Massachusetts DPU issued an order on Columbia of Massachusetts' GSEP reconciliation proceeding finding that, due to pending investigations of the Greater Lawrence Incident and other operational matters, the Massachusetts DPU could not, at this time, make a finding of prudence with respect to the Columbia of Massachusetts' 2018 GSEP investments and deferred the decision on the prudency of the 2018 GSEP investments in the annual GSEP and GSEP reconciliation filings until the investigations by the DPU are complete.

The DPU added that its inability to make a finding of prudence did not constitute a finding of imprudence.

Once new base rates are established under a base rate proceeding, the GSEP factor is re-set to remove the capital investment and associated revenue reflected in the base rates.

Columbia of Massachusetts' current five year GSEP plan for the periods 2019-2023 was approved April 30, 2019.

Columbia of Pennsylvania, DSIC - On February 14, 2012, the Governor of Pennsylvania signed into law Act 11 of 2012, which provided a DSIC mechanism for certain utilities to recover costs related to repair, replacement or improvement of eligible distribution property that has not previously been reflected in rates or rate base.

Through a DSIC, a utility may recover the fixed costs of eligible infrastructure incurred during the three months ended one month prior to the effective date of the charge, thereby reducing the historical regulatory lag associated with cost recovery through the traditional rate-making process.

On March 14, 2013, the Pennsylvania PUC approved Columbia of Pennsylvania’s petition to implement a DSIC as of April 1, 2013.

Accordingly, Columbia of Pennsylvania is authorized to recover the cost of eligible plant associated with repair, replacement or improvement that was not previously reflected in rate base and has been placed in service during the applicable three-month period.

After the initial charge is established, the DSIC is updated quarterly to recover the cost of further plant additions and cannot exceed five percent of distribution revenues.

Recoverable costs include a return on investment, exclusive of accumulated deferred income taxes from the calculation of rate base, and depreciation.

Once new base rates are established under a base rate proceeding, the DSIC is set to zero.

Additionally, the DSIC rate is also reset to zero if, in any quarter, the data reflected in the Columbia of Pennsylvania's most recent quarterly financial earnings report show that the utility will earn an overall rate of return that would exceed the allowable rate of return used to calculate its fixed costs under the DSIC mechanism.

A utility is exempt from filing a quarterly financial earnings report when a base rate proceeding is pending before the Pennsylvania PUC.

Columbia of Virginia, SAVE - On March 11, 2010, the Virginia Governor signed legislation into law that allows natural gas utilities to implement programs to replace qualifying infrastructure on an expedited basis and provides for timely cost recovery.

Known as the SAVE Act, the law allows natural gas utilities to file programs with the VSCC providing a timeline and estimated costs for replacing eligible infrastructure.

Eligible infrastructure replacement projects are those that (1) enhance safety or reliability by reducing system integrity risks associated with customer outages, corrosion, equipment failures, material failures, or natural forces; (2) do not increase revenues by directly connecting the infrastructure replacement to new customers; (3) reduce or have the potential to reduce greenhouse gas emissions; (4) are not included in the natural gas utility’s rate base in its most recent rate case; and (5) are commenced on or after January 1, 2010.

The SAVE Act provides for recovery of costs associated with the eligible infrastructure through a rate rider.

Recoverable costs include a return on investment, depreciation and property taxes.

Columbia of Virginia’s current five year SAVE plan was approved by the VSCC in 2016 and amended in 2017 for the years 2016 through 2020 and amended in 2019 for calendar year 2020.

Columbia of Kentucky, SMRP (formerly AMRP) - On October 26, 2009, the Kentucky PSC approved a mechanism for recovering the costs of Columbia of Kentucky’s AMRP not previously reflected in rate base through an annual fixed monthly rate rider filed in October.

In its 2013 rate case, Columbia of Kentucky was allowed to base the AMRP rider on the expected annual cost of service.

Recoverable costs include a return on investment, depreciation and property taxes, offset by specific cost savings.

At the end of each 12-month period, Columbia of Kentucky must file a reconciliation of the amount collected and actual costs.

Any over-collection or under-collection balance is passed back to, or recovered from, customers through the surcharge over a 12-month period beginning in June of the subsequent year.

Once new base rates are established under a base rate proceeding, the AMRP rider is set to zero.

On July 29, 2019, CKY filed its SMRP to clarify approval of low pressure project spend and expand its AMRP to include for recovery of system safety investments, including low pressure project spend.

On November 7, 2019, the Commission approved Columbia of Kentucky's request to amend and expand its annual AMRP to become the SMRP.

Columbia of Maryland, STRIDE - On May 2, 2013, the Governor of Maryland signed Senate Bill 8 into law, authorizing gas companies to accelerate recovery of eligible infrastructure replacement, effective June 1, 2013.

The STRIDE statute provides recovery for gas pipeline upgrades outside of the context of a base rate proceeding through an annual surcharge, IRIS, as approved by the Maryland PSC.

The STRIDE statute directs gas utilities to file a plan to invest in eligible infrastructure replacement projects and to list the specific projects and elements in any such STRIDE plan with the Maryland PSC.

During [removed: 2019,] [added: 2020,] we conducted an evaluation of our internal control over financial reporting.

To the [removed: stockholders] [added: shareholders] and the Board of Directors of NiSource Inc.

We have audited the internal control over financial reporting of NiSource Inc. and subsidiaries (the “Company”) as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control [removed: -] [added: —] Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control [removed: -] [added: —] Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, [removed: 2019,] [added: 2020,] of the Company and our report dated February [removed: 27, 2020,] [added: 17, 2021,] expressed an unqualified opinion on those financial statements.

February 17, 2021

February 27, 2020

Except for the information required by this item with respect to our executive officers included at the end of Part I of this report on Form 10-K, the information required by this Item 10 is incorporated herein by reference to the discussion in "Proposal 1 Election of Directors," [removed: and] "Corporate [removed: Governance"] [added: Governance," and "Delinquent Section 16(a) Reports""] of the Proxy Statement for the Annual Meeting of Stockholders to be held on May [removed: 19, 2020.][added: 25, 2021.]

The information required by this Item 11 is incorporated herein by reference to the discussion in "Corporate Governance - Compensation Committee Interlocks and Insider Participation," "Director Compensation," "Executive Compensation," and "Executive Compensation - Compensation Committee Report," of the Proxy Statement for the Annual Meeting of Stockholders to be held on May [removed: 19, 2020.][added: 25, 2021.]

The information required by this Item 12 is incorporated herein by reference to the discussion in "Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information" of the Proxy Statement for the Annual Meeting of Stockholders to be held on May [removed: 19, 2020.][added: 25, 2021.]

The information required by this Item 13 is incorporated herein by reference to the discussion in "Corporate Governance - Policies and Procedures with Respect to Transactions with Related Persons" and "Corporate Governance - Director Independence" of the Proxy Statement for the Annual Meeting of Stockholders to be held on May [removed: 19, 2020.][added: 25, 2021.]

The information required by this Item 14 is incorporated herein by reference to the discussion in "Independent [removed: Auditor] [added: Registered Public Accounting Firm] Fees" of the Proxy Statement for the Annual Meeting of Stockholders to be held on May [removed: 19, 2020.][added: 25, 2021.]

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