NiSource(NI) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2025, showing increased net income and diluted EPS year-over-year Condensed Statements of Consolidated Income (unaudited) | Indicator (in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total Operating Revenues | $2,183.2 | $1,706.3 | | Operating Income | $759.4 | $583.4 | | Net Income | $526.7 | $400.3 | | Net Income Attributable to NiSource | $474.8 | $365.0 | | Net Income Available to Common Shareholders | $474.8 | $344.3 | | Diluted Earnings Per Share | $1.00 | $0.77 | Condensed Consolidated Balance Sheet Highlights (unaudited) | Asset/Liability (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $33,105.1 | $31,788.1 | | Net Property, Plant and Equipment | $26,489.9 | $25,453.9 | | Total Stockholders' Equity | $10,946.0 | $10,668.3 | | Total Liabilities | $22,159.1 | $21,119.8 | | Long-term debt (including current portion) | $14,114.1 | $13,355.7 | Condensed Statements of Consolidated Cash Flows (unaudited) | Cash Flow Activity (in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | $686.4 | $456.2 | | Net Cash Flows used for Investing Activities | $(1,352.7) | $(723.0) | | Net Cash Flows from (used for) Financing Activities | $771.4 | $(1,873.8) | Notes to Condensed Consolidated Financial Statements (unaudited) Detailed notes disclose accounting policies, revenue, debt, and regulatory matters, including new segment reporting and a $750 million debt issuance - The company adopted ASU 2023-07 for segment reporting, enhancing disclosures about significant segment expenses and information about the Chief Operating Decision Maker (CODM)[33] Revenue by Segment (Q1 2025 vs Q1 2024) | Segment (in millions) | Q1 2025 Total Operating Revenues | Q1 2024 Total Operating Revenues | | :--- | :--- | :--- | | Columbia Operations | $1,240.6 | $953.7 | | NIPSCO Operations | $941.4 | $752.4 | | Corporate and Other | $1.2 | $0.2 | | Total | $2,183.2 | $1,706.3 | - In March 2025, NiSource issued $750.0 million of 5.850% senior unsecured notes due in 2055, with net proceeds of approximately $739.6 million[64] - NIPSCO made significant milestone payments for its renewable generation projects, including a $336.6 million payment for the Fairbanks project and a $217.6 million payment for the Dunns Bridge II project upon its substantial completion in January 2025[111] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial results, highlighting increased net income from new rates, liquidity, and strategic capital investments - Net income available to common shareholders increased by $130.5 million YoY, primarily due to higher revenues from capital investments, partially offset by increased operating and interest expenses[137][138] - The company is advancing its energy transition, with 1,500 MW of owned renewable projects and 600 MW of PPA projects in service as of March 31, 2025. It remains on track to retire remaining coal units at R.M. Schahfer by the end of 2025[129] - NiSource is evaluating significant potential load growth from data center development in its northern Indiana service territory, which would require new generation resources[131] - The company plans to make capital investments of $4.0 billion to $4.3 billion in 2025 and approximately $19.4 billion during the 2025-2029 period[175] Executive Summary NiSource's vision focuses on infrastructure investment, energy transition, operational excellence, and managing economic factors like data center growth - NiSource is advancing its energy transition by retiring coal-fired generation and replacing it with a balanced mix of low- or zero-emission sources. As of Q1 2025, 1,500 MW of owned renewable projects are in service[129] - The company is evaluating potential data center development in its service territory, which could significantly increase power demand and require new generation resources[131] - An enterprise-wide transformation is underway, focusing on operational excellence and efficiency through investments in technology like the WAM program, which is expected to be fully implemented by the end of 2025[133] Results and Discussion of Segment Operations Segment operations show increased operating income for both Columbia and NIPSCO, driven by new rates and favorable weather conditions Columbia Operations Operating Income (in millions) | Period | Operating Income | Change (Favorable) | | :--- | :--- | :--- | | Q1 2025 | $445.8 | $83.8 | | Q1 2024 | $362.0 | | - Columbia Operations' revenue increase was primarily driven by new rates from base rate proceedings and regulatory capital programs ($73.2M) and the effects of colder weather ($27.2M)[147] NIPSCO Operations Operating Income (in millions) | Period | Operating Income | Change (Favorable) | | :--- | :--- | :--- | | Q1 2025 | $311.9 | $95.5 | | Q1 2024 | $216.4 | | - NIPSCO Operations' revenue increase was primarily driven by new rates from base rate proceedings and regulatory programs ($82.1M) and the effects of weather ($28.2M)[157] Liquidity and Capital Resources The company maintains strong liquidity, issued $750 million in debt, and is on track with its 2025 capital expenditure plans Net Available Liquidity (in millions) | Date | Net Available Liquidity | | :--- | :--- | | March 31, 2025 | $1,712.9 | | December 31, 2024 | $1,567.6 | - On March 27, 2025, the company issued $750.0 million of 5.850% senior unsecured notes maturing in 2055[170] - The company is on track to invest $4.0 to $4.3 billion in capital projects during 2025 and forecasts $19.4 billion in investments from 2025-2029[175] - Credit ratings from S&P, Moody's, and Fitch remain stable and investment-grade for both NiSource and NIPSCO[183] Regulatory, Environmental and Safety Matters The company addresses regulatory engagement, environmental goals including Net Zero by 2040, and safety protocols, monitoring new rules - The company has a Net Zero GHG emissions goal by 2040 for Scope 1 and 2 emissions and had reduced Scope 1 emissions by approximately 72% from 2005 levels as of the end of 2024[205] Pending Rate Cases | Company | Requested Incremental Revenue (in millions) | Status | | :--- | :--- | :--- | | NIPSCO - Electric | $368.7 | Settlement filed for $257.0M increase | | Columbia of Virginia | $37.2 | Settlement filed for $28.2M increase | | Columbia of Pennsylvania | $110.5 | In process | - The company is monitoring proposed PHMSA rules for leak detection and repair (LDAR) and safety of gas distribution pipelines (SGDP), which could impact operations and costs[195][196][197] - The EPA's final GHG standards for power plants are not expected to impact NIPSCO's existing generation but may affect new generation and are estimated to add $675 million in costs to customers[203] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to Item 2 for market risk disclosures, focusing on commodity price, interest rate, and credit risks - The report directs readers to the Market Risk Disclosures section in Item 2 for detailed information[218] - A 100 basis point (1%) change in short-term interest rates would impact interest expense by approximately $2.5 million for the three months ended March 31, 2025[212] - Commodity price risk is largely mitigated as prudently incurred costs, including gains or losses on derivatives, are recovered through regulatory mechanisms like GCA and FAC[209] Item 4. Controls and Procedures CEO and CFO concluded disclosure controls were effective as of March 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that as of the end of the reporting period, the company's disclosure controls and procedures were effective at a reasonable assurance level[218] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[219] PART II - OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 14 for legal proceedings, with the company expecting no material impact from pending claims - For details on legal proceedings, the report refers to Note 14, 'Other Commitments and Contingencies - B. Legal Proceedings,' in the financial statements[222] Item 1A. Risk Factors No material changes to risk factors were reported from the Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2024[223] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported during the period - None reported for the period[224] Item 5. Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during Q1 2025 - During the quarter ended March 31, 2025, no directors or executive officers adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement[226] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including new notes, CEO/CFO certifications, and XBRL data - The list of exhibits includes CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and the form of the 5.850% Notes due 2055[229]