NiSource Inc. — 2021 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2021. This is an annual report; the provided filing text does not give standalone fourth-quarter results. Financial statements were audited, and the auditor issued unqualified opinions on the financial statements and internal control over financial reporting.
Business context
NiSource is a regulated energy holding company serving approximately 3.7 million customers in six states through its Gas Distribution Operations and Electric Operations segments. Substantially all operating income comes from regulated utilities.
Key financial metrics
| Metric | 2021 | 2020 |
|---|---|---|
| Operating revenue | $4,899.6 million | $4,681.7 million |
| Operating income | $1,006.9 million | $550.8 million |
| Net income (loss) attributable to NiSource | $584.9 million | $(17.6) million |
| Net income (loss) available to common shareholders | $529.8 million | $(72.7) million |
| Basic / diluted EPS | $1.35 / $1.27 | $(0.19) / $(0.19) |
| Cash from operating activities | $1,217.9 million | $1,104.0 million |
| Cash used for investing activities | $(2,204.9) million | $(879.1) million |
| Cash from (used for) financing activities | $956.3 million | $(247.7) million |
| Long-term debt, including current portion | $9,241.5 million | $9,243.1 million |
| Short-term borrowings | $560.0 million | $503.0 million |
Operating margin was approximately 20.6% in 2021 versus 11.8% in 2020, calculated as operating income divided by operating revenue. Capital expenditures were $1,838.0 million; operating cash flow less capital expenditures was approximately negative $620 million. Year-end net available liquidity was $1,606.5 million, including $84.2 million of cash and cash equivalents. The debt-to-capitalization covenant ratio was 57.4%, below the 70% limit.
Changes versus 2020
- Revenue rose $217.9 million (about 4.7%) and operating income rose $456.1 million. Management attributed improved results chiefly to rate outcomes, the absence of Massachusetts-business operating costs after its 2020 sale, and a much smaller sale loss in 2021.
- NiSource recorded a $6.8 million pretax loss on final sale adjustments for the Massachusetts business in 2021, compared with a $412.4 million loss in 2020. The 2020 results also included a $243.5 million loss on early debt extinguishment.
- Gas Distribution operating income increased to $617.5 million from $199.1 million; Electric Operations operating income increased to $387.8 million from $348.8 million.
- Operating cash flow increased $113.9 million, primarily because Greater Lawrence Incident payments fell to $15.6 million from $226.7 million. Investing cash outflow increased, reflecting capital spending and renewable-project payments, and the absence of $1,115.9 million of 2020 Massachusetts-sale proceeds.
Outlook, risks and unusual items
- Management expects approximately $10 billion of capital investment during 2021–2024, including annual investments of $1.9–$2.2 billion for growth, safety and reliability, plus approximately $2.0 billion for replacement generation, primarily in 2022–2023.
- NIPSCO is transitioning away from coal. It retired two Schahfer coal units in October 2021; remaining Schahfer units were scheduled for retirement in 2023. The Michigan City coal station retirement is planned for 2026–2028, subject to reliability, regulatory and MISO approvals. The 2021 resource plan includes demand-side management, solar, storage and facility upgrades.
- NiSource targets a 90% reduction in Scope 1 greenhouse-gas emissions by 2030 versus 2005. Achievement depends on project execution, permits, technology, supply availability, costs and regulatory outcomes; the filing cautions that targets are not guarantees.
- Renewable projects face possible delays from solar-panel supply constraints, permitting and interconnection. Broader supply-chain shortages, higher material prices and labor constraints may increase costs or delay infrastructure work.
- Significant exposures include substantial indebtedness, regulatory cost-recovery and rate-case uncertainty, extreme weather and climate-transition risks, cybersecurity and operational hazards, and the continuing Greater Lawrence Incident claims and compliance obligations. NiSource reported $9.8 billion of consolidated indebtedness at year-end.
- NiSource expects to have adequate capital for operations and planned investment, citing operating cash flow, debt and equity financing, commercial paper and a $1.85 billion revolving facility. The facility was extended in February 2022 to February 2027; that amendment is subsequent to year-end.
- The board declared a quarterly common dividend of $0.235 per share in January 2022. Future dividends remain subject to board discretion, subsidiary cash generation, financing terms and regulatory restrictions.
Important facts for investors to verify
- Whether rate cases and infrastructure trackers allow timely recovery of planned capital spending and higher input costs.
- Actual timing, cost and regulatory approval of coal retirements and replacement-generation projects, including the approximately $2.0 billion near-term investment plan.
- Remaining Greater Lawrence Incident claims, settlement amounts, insurance recoveries and compliance with the deferred prosecution agreement.
- Debt maturities, financing costs, credit ratings and the effect of Equity Units, including potential common-share dilution and contract payments.
- Whether reported regulatory assets—$2,492.2 million at year-end 2021—remain recoverable through future rates.