NiSource(US:NI)2020-08-05 15:45Financial Performance - For the six months ended June 30, 2020, the company experienced approximately $17.8 million in lower usage revenue primarily due to decreased commercial and industrial demand, partially offset by a $6.9 million increase in residential usage revenue [242]. - The company reported a net loss available to common shareholders of $18.5 million, or $0.05 per basic share for Q2 2020, compared to a net income of $283.1 million, or $0.76 per basic share for Q2 2019, reflecting a decrease of $301.6 million [255]. - For the six months ended June 30, 2020, net income available to common shareholders was $43.3 million, or $0.11 per basic share, down from $488.2 million, or $1.31 per basic share for the same period in 2019, indicating a decrease of $444.9 million [256]. - Operating revenues for Q2 2020 were $962.7 million, a decrease of $47.7 million from $1,010.4 million in Q2 2019, and for the six months ended June 30, 2020, revenues were $2,568.2 million, down $312.0 million from $2,880.2 million in 2019 [254]. - Operating income for Q2 2020 was $91.7 million, a significant decline from $463.5 million in Q2 2019, and for the six months ended June 30, 2020, operating income was $239.9 million, down from $837.7 million in the same period of 2019 [257][258]. COVID-19 Impact - The company incurred approximately $10.8 million in expenses related to personal protective equipment and other COVID-19 related services and supplies during the first half of 2020 [242]. - The company anticipates lower revenue and cash flow during the second half of 2020 compared to the same period in 2019 due to decreased commercial and industrial demand and the suspension of late payment and reconnection fees [243]. - The company has suspended shut-offs for non-payment and late payment charges in response to the COVID-19 pandemic, which is expected to remain in effect through the third or fourth quarters of 2020 [239]. - The company is continuously monitoring the impact of COVID-19 on its operations and liquidity, with potential future risks including increased bad debt and delays in capital construction projects [245]. - Increased bad debt expense primarily related to COVID-19 was $6.2 million for the six months ended June 30, 2020 [283]. Capital Investments and Expenditures - The company has reduced its expected 2020 capital investments by $145 million to conserve cash, while maintaining its capital construction programs and renewable generation projects [242]. - The company expects to invest approximately $1.7 to $1.8 billion in capital during 2020 as part of its long-term infrastructure investment strategy, which totals an estimated $30 billion [264]. - The company invested $819.3 million in capital expenditures for the six months ended June 30, 2020, focusing on safety and reliability improvements in gas distribution and electric generation [263]. - Capital expenditures for the first half of 2020 were $819.3 million, down from $843.5 million in the same period in 2019, with total projected capital expenditures for 2020 estimated at $1.7 to $1.8 billion [311]. Liquidity and Financial Position - The company is actively managing its liquidity and has sufficient resources for the next 12 to 24 months, supported by refinancing efforts and anticipated cash proceeds from the sale of the Massachusetts Business [242]. - The company has $1,982.0 million in net liquidity available as of June 30, 2020, compared to $1,409.1 million as of December 31, 2019, indicating improved liquidity [266]. - The debt to capitalization ratio as of June 30, 2020, was 63.8%, below the 70% limit set by the revolving credit facility [317]. - The company collected $800 million from insurance providers related to the Greater Lawrence Incident, but total costs have exceeded available insurance coverage [308]. Operational Performance - Operating expenses increased by $379.4 million for the three months ended June 30, 2020 compared to the same period in 2019 [276]. - The decrease in operating expenses for the six months ended June 30, 2020, was $88.4 million (approximately 13.5%) compared to the same period in 2019 [294]. - Total volumes sold and transported for the three months ended June 30, 2020 were 196.5 MMDth, an increase from 195.0 MMDth for the same period in 2019 [282]. - Total volumes sold and transported for the six months ended June 30, 2020 were 546.9 MMDth, a decrease from 577.2 MMDth for the same period in 2019 [283]. Strategic Initiatives - The company has launched a multi-year strategic initiative aimed at improving cost structure and operational capabilities, which includes a voluntary separation program for certain employees [253]. - The company has entered into an Asset Purchase Agreement to sell the Massachusetts Business to Eversource for a purchase price of $1,100 million in cash, subject to adjustments [252]. - NIPSCO plans to retire 2,080 MW of generating capacity by 2023, representing 72% of its remaining capacity and 100% of its coal-fired capacity [305]. - The planned replacement of approximately 1,400 MW of retiring coal-fired generation could lead to capital investment opportunities of $1.8 to $2.0 billion in 2022 and 2023 [305]. Regulatory and Compliance - Disclosure controls and procedures were evaluated as effective by the CEO and CFO, ensuring accurate financial information processing and reporting [340]. - No changes in internal control over financial reporting during the fiscal quarter that materially affected internal controls [341]. - The credit rating agencies have maintained a stable outlook for NiSource and its subsidiaries as of June 30, 2020 [319].