NiSource(US:NI)2020-08-06 05:08Financial Data and Key Metrics Changes - Non-GAAP net operating earnings for Q2 2020 were approximately $50 million or $0.13 per share, compared to $19 million or $0.05 per share in Q2 2019, driven primarily by reduced employee and administrative expenses [19] - The total impact of COVID-19 in the quarter was approximately $30 million or $0.06 per share, with most demand-related impacts occurring in April [22] Business Line Data and Key Metrics Changes - In the Gas segment, operating earnings increased by nearly $27 million, primarily due to lower employee and administrative expenses and higher revenues from safety and modernization investments [20] - In the Electric segment, operating earnings rose by nearly $4 million, driven by lower employee and administrative expenses and higher residential demand related to COVID-19 [21] Market Data and Key Metrics Changes - Modest commercial and industrial load impacts due to COVID-19 were noted, partially offset by increases in residential load [10] - The company continues to expect $1.7 billion to $1.8 billion in capital investments for 2020 despite pandemic challenges [10] Company Strategy and Development Direction - The company is undergoing a transition year in 2020, focusing on mitigating financial impacts from COVID-19, completing the sale of Columbia Gas of Massachusetts, and enhancing execution in key focus areas [7][48] - A multiyear strategic initiative has been launched to improve cost structure and capabilities, including a voluntary separation program for certain employee groups [12] - The company aims for a compound annual growth rate (CAGR) of 10% to 12% in rate base growth, which is expected to drive earnings per share growth exceeding the previous 5% to 7% annual growth commitment [13][27] Management's Comments on Operating Environment and Future Outlook - Management remains focused on employee and customer safety while providing reliable utility service during the pandemic [9] - The company anticipates a gradual recovery into the first half of 2021, with no significant long-term impacts from COVID-19 expected [24] - The company is committed to maintaining investment-grade credit ratings while executing its capital investment plans [29] Other Important Information - The planned sale of Columbia Gas of Massachusetts is on track for regulatory approval in Q3 2020, with a payment of $56 million agreed upon for customer relief [11] - The company has a balanced financing plan that includes annual equity issuance and other funding sources to support ongoing safety and infrastructure investments [30] Q&A Session Summary Question: Liquidity and Equity Needs - The company indicated that liquidity looks adequate for the next 12 to 24 months, suggesting no block equity through 2021, but some equity may be needed for generation build-out in 2022 and 2023 [52] Question: Earnings Growth Trajectory - The company expects significant investments in 2022 and 2023, with a gradual increase in earnings as new revenues from these investments are realized [56] Question: Renewable Investments and Customer Bill Impact - The company anticipates $4 billion in savings over 30 years from its generation strategy, with low single-digit bill increases expected when rates do rise [61] Question: Rate Case Updates - The company confirmed that there are no delays in the Pennsylvania rate case due to COVID-19, and it continues to work with intervenors and the commission [67] Question: Future Renewable Investments - Future renewable investments from 2024 to 2028 will be informed by ongoing IRP analyses, with expectations for similar CapEx sizes as announced for 2022 and 2023 [66]