Financial Data and Key Metrics Changes - NiSource reported non-GAAP diluted net operating earnings per share (NOEPS) of $0.12 for Q2 2022, a slight decrease from $0.13 in Q2 2021 [12][23] - The company reaffirmed its 2022 guidance of $1.42 to $1.48 diluted non-GAAP NOEPS and a compound annual growth rate of 7% to 9% from 2021 through 2024 [10][92] Business Line Data and Key Metrics Changes - Gas distribution operating earnings for Q2 2022 were approximately $81 million, an increase of about $15 million compared to the same quarter last year [24] - Electric segment non-GAAP operating earnings for Q2 were about $73 million, which is about $11 million lower than the same quarter last year [25] Market Data and Key Metrics Changes - The company experienced a revenue increase of $72 million annually from the NIPSCO gas rate case, effective September 2022 and March 2023 [14] - Columbia Gas of Ohio requested a revenue increase of $221 million, while Columbia Gas of Pennsylvania sought an additional $82.2 million for infrastructure upgrades [15] Company Strategy and Development Direction - NiSource is focused on safety and operational excellence while pursuing growth and sustainability [8] - The company plans to invest approximately $10 billion from 2021 to 2024, with about $2 billion allocated for renewable projects primarily between 2022 and 2024 [19] - A strategic review is ongoing to explore internal and external opportunities to maximize shareholder value, with results expected to be shared at an Investor Day in November [12][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the 2022 guidance despite challenges such as delays in solar projects and inflationary pressures [66][92] - The pause on solar panel tariffs has provided clarity on project timelines, although original timelines for renewable generation projects remain unchanged [9][10] Other Important Information - NiSource's debt level as of June 30, 2022, was about $10.1 billion, with a weighted average interest rate of approximately 3.7% [26] - The company successfully executed its first green bond issuance, a 30-year bond at 5%, intended for wind project purchases [29] Q&A Session Summary Question: Can you discuss the impact of the pause on tariffs and growth opportunities? - Management indicated that they are pulling forward capital investments to mitigate the impact of solar project delays and are confident in their growth plan [34][36] Question: How is the strategic review process progressing? - The review involves benchmarking against robust stand-alone plans and exploring operational efficiencies while assessing demand for local distribution companies (LDCs) [39][40] Question: What are the implications of the Inflation Reduction Act? - Management noted no near-term material impact from the act, but they will analyze long-term effects on renewables and energy efficiency [42][43] Question: How is the company managing industrial demand trends? - There has been some weakness in industrial sales, particularly in the steel industry, but overall electric revenues are supported by residential and commercial growth [64][65] Question: What is the status of the NIPSCO base rate filing? - The company anticipates filing a rate case before the end of the year to incorporate completed projects into the rate structure [69] Question: How are customers affected by higher commodity costs? - Customers are already seeing higher commodity prices reflected in their bills, with a year-over-year increase of about 19% to 20% [72] Question: What is the status of in-flight renewable projects? - The company is receiving solar panels for ongoing projects and is finalizing commercial negotiations for additional projects [75][76] Question: What is the state of settlement discussions in Pennsylvania? - Discussions have been constructive, focusing on customer value and support for modernization programs [83]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-16189 NiSource Inc. | | Trading | Name of Each Exchange on Which | | --- | --- | --- | | Title of Each Class | Symbol(s) | Registered | | Co ...

Financial Data and Key Metrics Changes - NiSource reported non-GAAP diluted net operating earnings per share (NOEPS) of $0.75 for Q1 2022, a decrease from $0.77 in Q1 2021, with total non-GAAP net operating earnings of approximately $329 million compared to $305 million last year [13][28] - The company reaffirmed its 2022 guidance of $1.42 to $1.48 diluted non-GAAP EPS and a compound annual growth rate (CAGR) of 7% to 9% from 2021 through 2024 [11][131] Business Line Data and Key Metrics Changes - Gas Distribution operating earnings were approximately $405 million for Q1 2022, an increase of about $31 million compared to the same quarter last year [29] - Electric segment non-GAAP operating earnings for Q1 were about $99 million, which was about $8 million higher than 2021 [31] Market Data and Key Metrics Changes - NiSource's debt level as of March 31 was approximately $9.8 billion, with $9.2 billion in long-term debt and a weighted average interest rate of approximately 3.7% [32] - The company maintained net available liquidity of about $1.9 billion, consisting of cash and available capacity under its credit facility [33] Company Strategy and Development Direction - NiSource is committed to completing its generation transition from coal by 2028, although delays in solar and storage projects are expected due to the Commerce Department investigation [10][22] - The company plans to adjust its modernization investments to account for the timing changes in renewable energy project investments, aiming for approximately $10 billion in capital investments during the 2021 to 2024 period [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaffirming the 2022 guidance despite projected delays in solar projects, emphasizing the importance of flexibility in the business plan [11][12] - The company highlighted the potential unintended consequences of project delays on customer costs and the importance of accelerating savings through renewable transitions [24][116] Other Important Information - NiSource is actively pursuing regulatory excellence with several rate cases filed in Pennsylvania and Virginia, and a settlement in the NIPSCO gas rate case [15][131] - The company plans to host an Investor Day in the fall to provide a definitive long-term plan beyond 2024 [12][27] Q&A Session Summary Question: Details on renewable investments and project timelines - Management clarified that there is a projected delay of 6 to 18 months for solar projects due to the Commerce Department investigation, with some projects already under construction expected to be completed sooner [51][52] Question: Update on strategic business review - The CEO indicated that the strategic business review is ongoing, with more information expected to be revealed during the fall Investor Day [57][128] Question: Impact of solar project delays on financing plans - Management noted that delays would impact debt financing for projects, but no changes to the overall financing plan were anticipated at this time [125][126] Question: Cost overruns and recovery mechanisms - Cost overruns are primarily the responsibility of the developer, with the company needing to evaluate the impact of any tariffs on project costs [111][123] Question: Customer bill impacts from rate increases - Management is continuously considering customer bill impacts and is in discussions with regulators to mitigate potential increases [84][90]

NiSource | NYSE: NI | nisource.com | SUPPLEMENTAL SLIDES 1Q 2022 RESULTS May 4, 2022 FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Investors and prospective investors should understand that many factors govern whether any forward-looking statement contained herein will be or can be rea ...

PART I FINANCIAL INFORMATION [Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) The unaudited financial statements show a significant increase in net income driven by higher operating revenues and a slight rise in total assets [Condensed Statements of Consolidated Income](index=7&type=section&id=Condensed%20Statements%20of%20Consolidated%20Income) NiSource reported significantly increased operating revenues and net income for Q1 2022 compared to the prior year Consolidated Income Statement Highlights (Q1 2022 vs Q1 2021) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Total Operating Revenues** | $1,873.3 million | $1,545.6 million | | **Operating Income** | $600.3 million | $433.2 million | | **Net Income Attributable to NiSource** | $426.8 million | $295.5 million | | **Diluted Earnings Per Share (EPS)** | $0.94 | $0.72 | - The increase in operating income was primarily driven by higher customer revenues, which rose to **$1,840.3 million** from $1,506.5 million, partially offset by an increase in the cost of energy[20](index=20&type=chunk) [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and equity slightly increased as of March 31, 2022, while long-term debt remained stable Balance Sheet Summary | Metric | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | $24,365.5 million | $24,156.9 million | | **Net Property, Plant and Equipment** | $18,120.7 million | $17,881.8 million | | **Total Liabilities** | $16,834.1 million | $16,884.0 million | | **Total Equity** | $7,531.4 million | $7,272.9 million | | **Long-term debt (excluding current portion)** | $9,179.8 million | $9,183.4 million | [Condensed Statements of Consolidated Cash Flows](index=11&type=section&id=Condensed%20Statements%20of%20Consolidated%20Cash%20Flows) Net cash from operating activities increased, while investing activities were primarily driven by capital expenditures Cash Flow Summary (Three Months Ended March 31) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net Cash Flows from Operating Activities** | $579.8 million | $448.3 million | | **Net Cash Flows used for Investing Activities** | ($370.4 million) | ($401.8 million) | | **Net Cash Flows used for Financing Activities** | ($173.9 million) | ($75.4 million) | | **Change in cash, cash equivalents and restricted cash** | $35.5 million | ($28.9 million) | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment performance, regulatory matters, and financing activities - The company adopted ASU 2020-06 on January 1, 2022, which impacted the calculation of **diluted EPS for its Equity Units** by requiring the assumption of share settlement for the remaining purchase contract payment balance[39](index=39&type=chunk)[47](index=47&type=chunk) - The company has two primary reportable segments: Gas Distribution Operations and Electric Operations, with Q1 2022 operating revenues of **$1,439.8 million** and **$430.3 million** respectively[138](index=138&type=chunk)[139](index=139&type=chunk) - In April 2022, a milestone payment of **$71.9 million** was made to a developer for the Dunn's Bridge I renewable energy project[140](index=140&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses increased net income, segment performance, liquidity, and key risks including supply chain delays impacting its electric generation transition [Executive Summary](index=34&type=section&id=Executive%20Summary) The company focuses on long-term infrastructure investment and safety while navigating delays in its renewable energy transition and monitoring economic risks - The 'Your Energy, Your Future' plan to replace coal generation with renewables faces delays on solar projects, with the retirement of two R.M. Schahfer coal units now expected by the **end of 2025**[150](index=150&type=chunk) - The company is monitoring economic risks including **supply chain delays**, increased competition for labor, and a substantial increase in natural gas spot market prices[154](index=154&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) [Results and Discussion of Segment Operations](index=36&type=section&id=Results%20and%20Discussion%20of%20Segment%20Operations) Both Gas and Electric segments saw increased operating income, though the electric generation transition is challenged by solar project delays Segment Operating Income (Three Months Ended March 31) | Segment | 2022 | 2021 | | :--- | :--- | :--- | | **Gas Distribution Operations** | $510.8 million | $346.9 million | | **Electric Operations** | $99.2 million | $87.9 million | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains adequate liquidity through credit facilities and financing programs to support its significant capital investment plans Net Available Liquidity | Date | Amount | | :--- | :--- | | **March 31, 2022** | $1,910.1 million | | **December 31, 2021** | $1,606.5 million | - The company plans to make capital investments totaling approximately **$8 billion** during the 2022-2024 period, with flexibility to adjust timing due to renewable project delays[198](index=198&type=chunk) - As of March 31, 2022, the company was in compliance with its debt covenant, with a debt-to-capitalization ratio of **56.4%** against a 70% limit[206](index=206&type=chunk) [Regulatory, Environmental and Safety Matters](index=48&type=section&id=Regulatory%2C%20Environmental%20and%20Safety%20Matters) The company is engaged in multiple rate cases and continues its strategy to reduce GHG emissions while exploring lower-carbon technologies - The company has active rate cases in several jurisdictions, including a request for a **$221.4 million** revenue increase for Columbia of Ohio and a **$109.7 million** increase for NIPSCO Gas[219](index=219&type=chunk) - NiSource continues to implement plans to reduce Scope 1 GHG emissions by **90% from 2005 levels by 2030**, having achieved an approximate 58% reduction by year-end 2021[227](index=227&type=chunk) - Columbia of Pennsylvania and Columbia of Virginia have filed petitions for a voluntary 'Green Path Rider' allowing customers to offset natural gas emissions through **RNG attributes and carbon offsets**[229](index=229&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's principal market risks are commodity prices, interest rates, and credit, which are managed through derivatives and regulatory mechanisms - The company's principal market risks are **commodity price risk, interest rate risk, and credit risk**[231](index=231&type=chunk) - A **100 basis point (1%)** change in short-term interest rates would have resulted in a **$1.5 million** change in interest expense for the three months ended March 31, 2022[236](index=236&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The chief executive officer and chief financial officer concluded that the company's **disclosure controls and procedures were effective** as of the end of the reporting period[243](index=243&type=chunk) - **No changes in internal control** over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[244](index=244&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to financial statement notes detailing legal matters, primarily related to the 2018 Greater Lawrence Incident - For a description of legal proceedings, the report refers to **Note 15, "Other Commitments and Contingencies,"** in the Notes to Condensed Consolidated Financial Statements[247](index=247&type=chunk) [Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) A new operational risk factor highlights expected delays in the electric generation strategy due to significant solar industry supply chain uncertainty - A new risk factor details expected delays in the electric generation strategy due to challenges in the **solar industry supply chain**, including federal policy actions and macro supply chain issues[249](index=249&type=chunk)[250](index=250&type=chunk) - The uncertainty around solar project completion creates risks for meeting capacity obligations, potentially extending the operation of two coal units at the Schahfer plant to the **end of 2025**[251](index=251&type=chunk)[252](index=252&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None reported[257](index=257&type=chunk)

Financial Performance - NiSource's 2021 Net Operating Earnings Per Share (NOEPS) reached $1.37, exceeding both original and updated guidance ranges[7] - The company reaffirmed its 2022 NOEPS guidance range of $1.42 to $1.48[7] - NiSource reaffirmed a 5-7% annual NOEPS growth for 2023 and a 7-9% Compound Annual Growth Rate (CAGR) from 2021 to 2024[7] - Capital expenditures for 2022 are expected to be between $2.4 billion and $2.7 billion[7] - As of December 31, 2021, NiSource's debt level was approximately $9.8 billion, including around $9.2 billion in long-term debt with a weighted average interest rate of 3.68%[17] Strategic Initiatives - NIPSCO submitted its 2021 Integrated Resource Plan (IRP) with a Preferred Plan that advances the retirement of all coal-fired generation during 2026-28[8] - Up to $750 million investment will be necessary to replace retiring coal-fired generation[8] - NiSource plans to reduce scope 1 greenhouse gas emissions by 90% by 2030, including a 50% reduction in methane emissions by 2025, compared to a 2005 baseline[41] - Planned renewable investments through 2023 total approximately $2.0 billion[41] Regulatory and Infrastructure - Final rate case orders were received in Pennsylvania, Kentucky, and Maryland[8] - NiSource has identified approximately $40 billion in long-term gas and electric infrastructure investment opportunities[24, 28]

Financial Data and Key Metrics Changes - For the full year 2021, the company reported non-GAAP diluted net operating earnings per share (NOEPS) of $1.37, an increase from $1.32 in 2020, reflecting strong financial performance [15][36] - The company reaffirmed its 2022 guidance for NOEPS in the range of $1.42 to $1.48, with a long-term growth forecast of 7% to 9% compound annual growth rate (CAGR) from 2021 through 2024 [15][36] Business Line Data and Key Metrics Changes - Gas Distribution operating earnings for 2021 were approximately $674 million, a slight increase of about $6 million compared to the previous year, despite lower operating revenues due to the sale of Columbia Gas of Massachusetts [37] - Electric segment non-GAAP operating earnings for 2021 were about $387 million, an increase of approximately $25 million from 2020, driven by infrastructure investment programs and increased customer demand [38] Market Data and Key Metrics Changes - The company received final orders in gas rate cases across Pennsylvania, Kentucky, and Maryland, resulting in revenue increases of approximately $58.5 million, $18 million, and $2.4 million respectively [21][22] - NIPSCO's electric TDSIC plan received final approval for a $1.6 billion investment program aimed at enhancing service and reliability for customers [23] Company Strategy and Development Direction - The company is focused on investment-driven, long-term sustainable growth, with plans to invest $2.4 billion to $2.7 billion in capital expenditures in 2022 [16][42] - The strategic initiatives include transitioning to renewable energy sources and reducing Scope 1 greenhouse gas emissions by 90% by 2030 compared to 2005 levels [13][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current growth plan, emphasizing a strategic review to extend growth beyond 2024 and evaluate the performance of the existing portfolio [46][47] - The CEO highlighted the importance of operational excellence and cost management as key priorities in the first 100 days of leadership [85][88] Other Important Information - The company plans to issue its first annual sales report alongside its annual report, showcasing progress in various initiatives [19] - The company is actively engaging with producers and developers focused on renewable natural gas, hydrogen, and emerging storage technologies to support decarbonization efforts [32] Q&A Session Summary Question: Can you provide insights on the strategy update? - The CEO indicated confidence in the current growth plan and mentioned a comprehensive review of the portfolio to maximize shareholder value [46][47] Question: What are the criteria for potential asset sales or acquisitions? - The CEO stated that criteria are still being developed, emphasizing the need for a thorough evaluation of the portfolio [49] Question: Are the renewable projects on schedule? - Management confirmed that all renewable projects are currently scheduled to be operational by the end of 2023, with active monitoring in place [104] Question: What are the priorities in the first 100 days as CEO? - The CEO outlined key focus areas including NiSource Next, the retirement of coal plants, and evaluating the gas distribution system for decarbonization opportunities [85][87] Question: How will the strategic review impact capital allocation? - The CEO mentioned that any asset sales could eliminate the need for future equity, while also considering attractive investments for shareholder value [73][112]

Part I [Business](index=7&type=section&id=Item%201.%20Business) NiSource Inc. is a regulated energy holding company with Gas Distribution and Electric Operations segments, focusing on safety, infrastructure investments, and renewable energy transition - NiSource is a **fully regulated energy holding company** deriving substantially all its revenue from its Gas Distribution and Electric Operations segments[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) Segment Overview | Segment | Customers Served | Key Infrastructure | | :--- | :--- | :--- | | **Gas Distribution Operations** | Approx. **3.2 million** in 6 states | Approx. **54,600 miles** of distribution main pipeline | | **Electric Operations (NIPSCO)** | Approx. **483,000** in northern Indiana | **2,315 MW** total generating capacity; **3,024 circuit miles** of transmission system | - The company's business strategy prioritizes safety through its **Safety Management System (SMS)** and focuses on **long-term infrastructure and environmental investments**, supported by regulatory initiatives to ensure sustainable returns and customer affordability[29](index=29&type=chunk)[30](index=30&type=chunk) - NIPSCO is **transitioning its electric generation portfolio**, planning to replace retiring coal units with a diverse portfolio including solar, energy storage, and upgrades to existing natural gas facilities, as outlined in its **2021 Integrated Resource Plan**[27](index=27&type=chunk)[31](index=31&type=chunk) Active Rate Cases as of December 31, 2021 | Company | Requested Incremental Revenue (millions) | Status | Expected Effective Date | | :--- | :--- | :--- | :--- | | Columbia of Ohio | $221.4 | Order Expected Q3 2022 | Q3 2022 | | NIPSCO - Gas | $109.7 | Order Expected Q3 2022 | September 2022 | - As of December 31, 2021, the company had **7,342 employees**, with **36% subject to collective bargaining agreements**; in 2021, **38% of external hires were female** and **21% were racially or ethnically diverse**[50](index=50&type=chunk)[51](index=51&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces a wide range of operational, financial, and litigation risks, including infrastructure, cybersecurity, indebtedness, and regulatory compliance - **Operational risks** include the inability to execute business plans and utility infrastructure investments, potential disruptions from **aging infrastructure**, and **supply chain challenges** impacting materials for gas and electric projects[77](index=77&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk) - The company faces **significant cybersecurity risks**, including sophisticated attacks on its technology systems which could disrupt operations, and increasing compliance costs associated with new government directives like those from the TSA[108](index=108&type=chunk)[110](index=110&type=chunk)[113](index=113&type=chunk) - **Financial risks** are significant due to substantial indebtedness of **$9.8 billion** as of year-end 2021; a drop in credit ratings could increase borrowing costs and require posting additional collateral, estimated at **$56.2 million** if downgraded below investment grade[123](index=123&type=chunk)[125](index=125&type=chunk)[127](index=127&type=chunk) - The **COVID-19 pandemic** continues to pose risks, including potential for **lower revenue** from commercial/industrial customers, **increased bad debt**, and disruptions to operations from employee illness or work restrictions[129](index=129&type=chunk)[131](index=131&type=chunk)[133](index=133&type=chunk) - Litigation and regulatory risks are highlighted by the **Greater Lawrence Incident**, which has led to **material costs exceeding insurance coverage** and an ongoing **Deferred Prosecution Agreement (DPA)** with the U.S. Attorney's Office[165](index=165&type=chunk)[167](index=167&type=chunk) - The company is subject to risks from **climate change**, including **physical impacts** on infrastructure from extreme weather and **transition risks** associated with moving to a lower-carbon economy, which could affect demand and the viability of assets[118](index=118&type=chunk)[119](index=119&type=chunk)[122](index=122&type=chunk) [Unresolved Staff Comments](index=32&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - **None**[175](index=175&type=chunk) [Properties](index=32&type=section&id=Item%202.%20Properties) The company's principal properties consist of its Gas Distribution and Electric Operations infrastructure and its headquarters in Merrillville, Indiana - The company's main properties are its **utility assets** for Gas and Electric operations[177](index=177&type=chunk)[178](index=178&type=chunk) - The corporate headquarters is a **325,000 square foot building** in Merrillville, Indiana, which the company owns[179](index=179&type=chunk) [Legal Proceedings](index=32&type=section&id=Item%203.%20Legal%20Proceedings) This section refers to Note 19-C in the Notes to Consolidated Financial Statements for a description of the company's legal proceedings - For a description of legal proceedings, see **Note 19-C**, "Legal Proceedings," in the Notes to Consolidated Financial Statements[181](index=181&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - **Not applicable**[182](index=182&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) NiSource's common stock trades on the NYSE, with a declared quarterly dividend of $0.235 per share and no equity repurchases in Q4 2021 - NiSource common stock is listed on the **NYSE** under the symbol "**NI**"[184](index=184&type=chunk) - The Board declared a quarterly common dividend of **$0.235 per share** on January 26, 2022[184](index=184&type=chunk) - As of February 15, 2022, NiSource had **17,282 common stockholders** of record and **405,385,010 shares outstanding**[186](index=186&type=chunk) - **No equity securities were purchased** by or on behalf of the company during the three months ended December 31, 2021[188](index=188&type=chunk) [Reserved](index=34&type=section&id=Item%206.%20Reserved) This section is not applicable - **Not applicable**[190](index=190&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the year ended December 31, 2021, detailing segment performance, liquidity, capital expenditure plans, and critical accounting policies [Executive Summary](index=36&type=section&id=Executive%20Summary) In 2021, NiSource advanced strategic goals through infrastructure modernization, renewable energy transition, and operational efficiency programs, while actively monitoring economic risks - In 2021, NiSource invested **$1.3 billion** in infrastructure modernization, including replacing **390 miles** of priority pipe[198](index=198&type=chunk) - The company's "**Your Energy, Your Future**" plan to replace coal generation capacity by **2028** is underway, with a refined timeline to retire the Michigan City Generating Station between 2026 and 2028[199](index=199&type=chunk)[200](index=200&type=chunk) - The "**NiSource Next**" initiative, launched in 2020, is a multi-year program to enhance safety, operational capabilities, and cost optimization, involving workforce optimization and process standardization in 2021[201](index=201&type=chunk)[202](index=202&type=chunk) - The company is actively monitoring **economic risks**, including **increasing lead times and prices** for construction materials and **increased competition for talent** in the labor market[207](index=207&type=chunk)[209](index=209&type=chunk) [Summary of Consolidated Financial Results](index=38&type=section&id=Summary%20of%20Consolidated%20Financial%20Results) For 2021, NiSource reported a significant turnaround with net income of $529.8 million, driven by favorable rate cases and the absence of Massachusetts business-related expenses Consolidated Financial Results (in millions, except per share amounts) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Operating Revenues** | $4,899.6 | $4,681.7 | $5,208.9 | | **Operating Income** | $1,006.9 | $550.8 | $890.7 | | **Net Income (Loss) attributable to NiSource** | $584.9 | $(17.6) | $383.1 | | **Net Income (Loss) Available to Common Shareholders** | $529.8 | $(72.7) | $328.0 | | **Diluted Earnings (Loss) Per Share** | $1.27 | $(0.19) | $0.87 | - The increase in 2021 net income was primarily due to **higher operating income** from **favorable rate case outcomes** and **lower operating expenses**, as 2020 included significant costs and a loss on the sale of the Massachusetts business[212](index=212&type=chunk) [Results and Discussion of Segment Operations](index=39&type=section&id=Results%20and%20Discussion%20of%20Segment%20Operations) Gas Distribution operating income significantly increased in 2021 due to the absence of the Massachusetts business loss, while Electric Operations revenue rose from warmer weather, increased usage, and new rates, with ongoing renewable energy project development Gas Distribution Operations - Operating Income (in millions) | Year | Operating Income | | :--- | :--- | | 2021 | $617.5 | | 2020 | $199.1 | | 2019 | $675.4 | - The **significant increase** in Gas Distribution operating income in 2021 vs. 2020 is primarily due to the **$412.4 million loss** on the sale of the Massachusetts Business recorded in 2020[227](index=227&type=chunk)[228](index=228&type=chunk) Electric Operations - Operating Income (in millions) | Year | Operating Income | | :--- | :--- | | 2021 | $387.8 | | 2020 | $348.8 | | 2019 | $406.8 | - Electric Operations revenue increased in 2021 due to warmer weather, **increased customer usage** as industrial and commercial activity recovered from COVID-19 impacts, and **new rates** from regulatory programs[233](index=233&type=chunk)[235](index=235&type=chunk) - NIPSCO is executing its **electric generation transition**, with multiple **Power Purchase Agreements (PPAs)** and **Build-Transfer Agreements (BTAs)** for wind and solar projects approved by the IURC, targeting completion dates through 2023[242](index=242&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) NiSource maintains adequate liquidity through operating cash flow and credit facilities, planning approximately $10 billion in capital investments for 2021-2024, while maintaining investment-grade credit ratings and compliance with debt covenants - Net cash from operating activities **increased by $113.9 million** to **$1,217.9 million** in 2021, primarily due to a decrease in payments related to the Greater Lawrence Incident[248](index=248&type=chunk) - The company plans to make capital investments totaling approximately **$10 billion** during the 2021-2024 period, including **$2.0 billion** for renewable generation to replace retiring coal-fired capacity[253](index=253&type=chunk) Net Available Liquidity (in millions) | Date | Amount | | :--- | :--- | | Dec 31, 2021 | $1,606.5 | | Dec 31, 2020 | $1,721.6 | - The company is in compliance with its primary debt covenant, maintaining a debt-to-capitalization ratio of **57.4%** as of December 31, 2021, below the **70% maximum**[260](index=260&type=chunk) [Environmental and Safety Matters](index=51&type=section&id=Environmental%20and%20Safety%20Matters) The company is subject to extensive environmental and safety regulations, actively managing climate change risks through GHG emission reductions, renewable energy adoption, and exploration of lower-carbon technologies - The **PIPES Act of 2020** requires updates to integrity management, emergency response, and O&M plans, which may **increase costs** for NiSource's subsidiaries[273](index=273&type=chunk) - The company is actively implementing plans to **reduce Scope 1 GHG emissions by 90%** from 2005 levels by **2030**, primarily through the retirement of coal-fired generation and increased use of renewable energy[280](index=280&type=chunk) - NiSource is exploring emerging technologies like **hydrogen** and **renewable natural gas (RNG)** to support economy-wide decarbonization[281](index=281&type=chunk) [Market Risk Disclosures](index=52&type=section&id=Market%20Risk%20Disclosures) NiSource manages principal market risks including commodity price, interest rate, and credit risk, largely mitigating commodity price risk through regulatory recovery mechanisms - The company's primary market risks are **commodity price risk**, **interest rate risk**, and **credit risk**[282](index=282&type=chunk) - Commodity price risk is **limited** for rate-regulated subsidiaries as prudently incurred gas and fuel costs are recovered through rate-making processes like the **GCA and FAC mechanisms**[284](index=284&type=chunk)[285](index=285&type=chunk) - A **100 basis point (1%) change** in short-term interest rates would have increased or decreased 2021 interest expense by **$3.1 million**[288](index=288&type=chunk) [Other Information](index=53&type=section&id=Other%20Information) This section outlines the company's critical accounting policies and estimates, including rate-regulated accounting, pension and postretirement benefits, goodwill impairment, unbilled revenue, and income taxes - The company's accounting for its rate-regulated subsidiaries under **ASC 980** is a critical policy, allowing it to defer costs and revenues as regulatory assets and liabilities; as of Dec 31, 2021, regulatory assets totaled **$2.5 billion** and regulatory liabilities totaled **$2.0 billion**[294](index=294&type=chunk) - Pension and postretirement benefit calculations require **significant judgment** on assumptions like discount rates and expected returns on assets; a **50 basis point change** in the discount rate would impact the 2021 projected benefit obligation by approximately **$80 million** for pensions and **$28 million** for other benefits[301](index=301&type=chunk)[309](index=309&type=chunk) - Goodwill, primarily from the 2000 Columbia acquisition, totaled **$1.486 billion** at year-end 2021; the annual impairment test in Q2 2021 indicated **no impairment**[310](index=310&type=chunk)[311](index=311&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the 'Market Risk Disclosures' section within Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - 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"[318](index=318&type=chunk) [Financial Statements and Supplementary Data](index=57&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for the fiscal year ended December 31, 2021, and the preceding two years, along with the independent auditor's report and detailed notes - The independent auditor, Deloitte & Touche LLP, issued an **unqualified opinion** on the financial statements and the effectiveness of internal control over financial reporting[322](index=322&type=chunk)[323](index=323&type=chunk) - The critical audit matters identified were the impact of **rate regulation** on the financial statements and the accounting for the **2021 Equity Units**, both of which involved **significant management judgments**[327](index=327&type=chunk)[336](index=336&type=chunk) Key Balance Sheet Items (in millions) | Account | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | $24,156.9 | $22,040.5 | | Net Property, Plant and Equipment | $17,881.8 | $16,619.5 | | **Total Liabilities** | $16,884.0 | $16,202.7 | | Long-term debt (incl. current portion) | $9,241.5 | $9,243.1 | | **Total Stockholders' Equity** | $7,272.9 | $5,837.8 | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=126&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - **None**[618](index=618&type=chunk) [Controls and Procedures](index=126&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2021, with no material changes in the most recent quarter - The CEO and CFO concluded that as of the end of the period, disclosure controls and procedures were **effective** at a reasonable assurance level[619](index=619&type=chunk) - Management concluded that internal control over financial reporting was **effective** as of December 31, 2021, a conclusion audited and affirmed by Deloitte & Touche LLP[620](index=620&type=chunk)[621](index=621&type=chunk) - **No changes** in internal control over financial reporting occurred during the most recently completed quarter that materially affected, or are reasonably likely to materially affect, internal controls[622](index=622&type=chunk) [Other Information](index=128&type=section&id=Item%209B.%20Other%20Information) This section is not applicable - **Not applicable**[631](index=631&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=128&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section is not applicable - **Not applicable**[632](index=632&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=129&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors and corporate governance is incorporated by reference from the company's Proxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2022 - Information required by this item is **incorporated by reference** from the Proxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2022[635](index=635&type=chunk) [Executive Compensation](index=129&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's Proxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2022 - Information required by this item is **incorporated by reference** from the Proxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2022[636](index=636&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=129&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and related stockholder matters is incorporated by reference from the company's Proxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2022 - Information required by this item is **incorporated by reference** from the Proxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2022[637](index=637&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=129&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's Proxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2022 - Information required by this item is **incorporated by reference** from the Proxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2022[638](index=638&type=chunk) [Principal Accounting Fees and Services](index=129&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's Proxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2022 - Information required by this item is **incorporated by reference** from the Proxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2022[639](index=639&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=130&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K report, including an index of all filed documents - This section contains a list of all financial statements and schedules included in **Item 8**[642](index=642&type=chunk) - An **Exhibit Index** is provided, listing all exhibits filed with the report, with management contracts and compensatory plans identified by an asterisk[643](index=643&type=chunk) [Form 10-K Summary](index=138&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section is not applicable - **None**[657](index=657&type=chunk)

NiSource | NYSE: NI | nisource.com | SUPPLEMENTAL SLIDES 3Q 2021 RESULTS November 3, 2021 FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Investors and prospective investors should understand that many factors govern whether any forwardlooking statement contained herein will be or can b ...

Financial Data and Key Metrics Changes - The company updated its 2021 guidance to target the top end of the range of $1.32 to $1.36 per share in non-GAAP diluted net operating earnings per share (NOEPS) [8][24] - For 2022, the company initiated guidance of $1.42 to $1.48 per share, consistent with a 5% to 7% near-term growth commitment [9][24] - Non-GAAP diluted NOEPS for Q3 2021 was $0.11, compared to $0.09 in Q3 2020, reflecting ongoing execution of infrastructure investments [11][25] Business Line Data and Key Metrics Changes - Gas Distribution operating earnings for Q3 2021 were approximately $18 million, an increase of about $8 million compared to the previous year [26] - Electric segment operating earnings for Q3 2021 were about $130 million, nearly $3 million lower than Q3 2020, with operating revenues decreasing slightly due to lower residential usage [27] Market Data and Key Metrics Changes - The Columbia Gas of Ohio rate case is progressing, with a request for an annual revenue increase of approximately $221 million pending a decision next year [12] - NIPSCO filed a gas rate case requesting a revenue increase of $115 million annually, focused on infrastructure modernization [12][13] Company Strategy and Development Direction - The company is committed to safety, reliability, customer affordability, and sustainability, with plans to reduce greenhouse gas emissions by 90% by 2030 [7][10] - Investments of up to $750 million will be required to replace retiring coal-fired generation, with a focus on transitioning to lower-cost, clean, and reliable generation [10][19] - The company plans to invest approximately $2 billion in renewable generation by 2023 to replace retiring capacity [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 7% to 9% compound annual growth in diluted net operating earnings per share through 2024, driven by core infrastructure programs and renewable generation investments [6][9] - The company is optimistic about the regulatory execution and expects favorable outcomes from pending rate cases in multiple states [11][75] Other Important Information - The company has narrowed its 2021 capital investment estimate to approximately $2 billion and reiterated its 2022 capital forecast of $2.4 to $2.7 billion [31] - All three major rating agencies reaffirmed the company's investment-grade credit ratings with stable outlooks [29] Q&A Session Summary Question: Inquiry about the IRP and investment guardrails - Management indicated that the range of potential investments will be informed by the actual projects selected and the efficiency of their construction [34][36] Question: Impact of federal policy on financing plans - Management noted that direct pay could provide additional flexibility in financing renewable investments, potentially reducing equity needs [37][39] Question: Dividend policy and future growth trends - The company maintains a 60% to 70% payout ratio target and expects to see growth in dividends aligned with earnings growth [45][46] Question: Clarification on 2023 EPS growth base - Management advised using the top end of the 2021 guidance as the base for 2023 EPS growth projections [51] Question: Timing and relationship between IRP and TDSIC - Management clarified that TDSIC focuses on existing transmission assets and does not directly relate to new generation or retiring generation [62] Question: Thoughts on methane emissions and capex plans - Management acknowledged opportunities to improve emissions profiles and emphasized the importance of the EPA methane rule over proposed legislation [65][66] Question: Factors underlying the higher earnings outlook - Management highlighted modernization investments and the impact of pending rate cases as key factors supporting the improved earnings outlook [73][75]