NiSource(NI) - 2024 Q1 - Quarterly Report

Company Information This section details NiSource Inc.'s registrant information, filer status, and common stock outstanding Registrant Details and Filer Status NiSource Inc. is a large accelerated filer, compliant with SEC requirements, with 448.3 million common shares outstanding as of April 30, 2024 - NiSource Inc. is a large accelerated filer, compliant with SEC filing requirements[3][4] Common Stock Outstanding | Metric | Value | | :--- | :--- | | Common Stock Outstanding (April 30, 2024) | 448,305,338 shares | Defined Terms This section provides a glossary of abbreviations and acronyms used throughout the report Glossary of Abbreviations and Acronyms This glossary defines key abbreviations and acronyms for NiSource subsidiaries, financial, accounting, and regulatory terms - The section lists key subsidiaries like Columbia Gas companies (Kentucky, Maryland, Ohio, Pennsylvania, Virginia) and Northern Indiana Public Service Company LLC (NIPSCO)[9] - It defines financial and regulatory terms such as AFUDC, AOCI, GAAP, EPS, IRA, MISO, OPEB, PHMSA, PPA, RNG, SEC, and TCJA[9][10] Note regarding forward-looking statements This section provides a cautionary note regarding forward-looking statements and associated risks Forward-Looking Statements and Risk Factors This section warns that forward-looking statements are based on assumptions and may differ from actual results, with no obligation to update - Forward-looking statements concern plans, strategies, objectives, expected performance, expenditures, and recovery of expenditures through rates, based on management's reasonable assumptions[11] - Factors that could cause actual results to differ include business plan execution, operating risks, third-party investor relations, technology adaptation, aging infrastructure, insurance coverage, electric generation strategy, construction and supply risks, demand fluctuations, energy commodity price volatility, workforce management, cybersecurity, climate change impacts, debt obligations, credit ratings, economic conditions, regulatory outcomes, and legal proceedings[12][15] - The company expressly disclaims any obligation to update or revise forward-looking statements, except as required by law[14] PART I. FINANCIAL INFORMATION This part presents NiSource Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements - unaudited This section provides NiSource Inc.'s unaudited condensed consolidated financial statements and detailed explanatory notes - The financial statements are unaudited and reflect normal recurring adjustments necessary for GAAP presentation, prepared pursuant to SEC rules and regulations[31][33] - Interim period income may not be indicative of full calendar year results due to weather variations and other factors[32] Condensed Statements of Consolidated Income (unaudited) This statement presents NiSource Inc.'s unaudited consolidated income for the three months ended March 31, 2024 and 2023 Condensed Statements of Consolidated Income (unaudited) | (in millions, except per share amounts) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (YoY) | | :------------------------------------ | :--------------------------------: | :--------------------------------: | :--------------------------------: | | Total Operating Revenues | $1,706.3 | $1,966.0 | $(259.7) | | Total Operating Expenses | $1,122.9 | $1,435.0 | $(312.1) | | Operating Income | $583.4 | $531.0 | $52.4 | | Net Income Attributable to NiSource | $365.0 | $333.0 | $32.0 | | Basic Earnings Per Share | $0.77 | $0.77 | $0.00 | | Diluted Earnings Per Share | $0.77 | $0.71 | $0.06 | - Cost of energy significantly decreased from $765.1 million in Q1 2023 to $425.0 million in Q1 2024, contributing to higher operating income despite lower total revenues[18] Condensed Statements of Consolidated Comprehensive Income (unaudited) This statement presents NiSource Inc.'s unaudited consolidated comprehensive income for the three months ended March 31, 2024 and 2023 Condensed Statements of Consolidated Comprehensive Income (unaudited) | (in millions, net of taxes) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------- | :--------------------------------: | :--------------------------------: | | Net Income | $400.3 | $337.8 | | Total other comprehensive income (loss) | $(0.2) | $2.4 | | Comprehensive Income | $400.1 | $340.2 | - The total other comprehensive income shifted from a gain of $2.4 million in Q1 2023 to a loss of $(0.2) million in Q1 2024, mainly due to net unrealized losses on available-for-sale debt securities[20] Condensed Consolidated Balance Sheets (unaudited) This statement presents NiSource Inc.'s unaudited consolidated balance sheets as of March 31, 2024 and December 31, 2023 Condensed Consolidated Balance Sheets (unaudited) | (in millions) | March 31, 2024 | December 31, 2023 | Change | | :------------------------------------ | :--------------: | :---------------: | :------: | | Total Assets | $29,338.1 | $31,077.2 | $(1,739.1) | | Net Property, Plant and Equipment | $22,946.1 | $22,274.9 | $671.2 | | Total Current Assets | $2,060.2 | $4,499.4 | $(2,439.2) | | Total Stockholders' Equity | $9,794.9 | $10,136.3 | $(341.4) | | Long-term debt, excluding current portion | $11,724.6 | $11,055.5 | $669.1 | | Short-term borrowings | $1,222.3 | $3,048.6 | $(1,826.3) | | Total Current Liabilities | $3,125.0 | $5,265.1 | $(2,140.1) | - Cash and cash equivalents decreased significantly from $2,245.4 million at December 31, 2023, to $102.2 million at March 31, 2024[22] - Preferred stock decreased from $486.1 million to zero, reflecting redemptions during the quarter[24] Condensed Statements of Consolidated Cash Flows (unaudited) This statement presents NiSource Inc.'s unaudited consolidated cash flows for the three months ended March 31, 2024 and 2023 Condensed Statements of Consolidated Cash Flows (unaudited) | (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (YoY) | | :------------------------------------ | :--------------------------------: | :--------------------------------: | :--------------------------------: | | Net Cash Flows from Operating Activities | $456.2 | $683.4 | $(227.2) | | Net Cash Flows used for Investing Activities | $(723.0) | $(727.8) | $4.8 | | Net Cash Flows from Financing Activities | $(1,873.8) | $117.3 | $(1,991.1) | | Change in cash, cash equivalents and restricted cash | $(2,140.6) | $72.9 | $(2,213.5) | - Significant financing activities in Q1 2024 included repayment of $1,650.0 million in short-term credit agreements and redemption of $486.1 million in preferred stock[25] Condensed Statements of Consolidated Equity (unaudited) This statement presents NiSource Inc.'s unaudited consolidated equity changes for the three months ended March 31, 2024 Condensed Statements of Consolidated Equity (unaudited) | (in millions) | Balance as of January 1, 2024 | Balance as of March 31, 2024 | Change | | :------------------------------------ | :---------------------------: | :--------------------------: | :------: | | Total NiSource Stockholders' Equity | $8,269.6 | $7,895.9 | $(373.7) | | Noncontrolling interest | $1,866.7 | $1,899.0 | $32.3 | | Total Stockholders' Equity | $10,136.3 | $9,794.9 | $(341.4) | - The company redeemed $486.1 million of Series B and B-1 Preferred Stock and incurred a $14.0 million redemption premium, recorded as a reduction to retained earnings[28][57] - Net income attributable to NiSource was $365.0 million for the period, contributing positively to equity[28] Notes to Condensed Consolidated Financial Statements (unaudited) This section provides detailed disclosures and explanations for NiSource Inc.'s unaudited financial statements - The notes provide context for the unaudited financial statements, highlighting that certain information and disclosures are condensed or omitted per SEC rules[31][33] - Key areas covered include changes in reportable segments, details on noncontrolling interests from joint ventures, and the impact of preferred stock redemptions on equity[37][50][57] 1. Basis of Accounting Presentation This note outlines the basis for preparing the unaudited condensed consolidated financial statements under GAAP and SEC rules - Financial statements are unaudited, prepared under GAAP and SEC rules, and include NiSource, majority-owned subsidiaries, and VIEs[31][33] - Interim results may not be indicative of full calendar year results due to weather variations and other factors[32] 2. Recent Accounting Pronouncements This note discusses recently issued accounting pronouncements and their potential impact on NiSource Inc.'s financial reporting - ASU 2023-05 (Joint Venture Formations) requires fair value measurement for initial assets/liabilities in joint ventures, effective January 1, 2025[34] - ASU 2023-07 (Segment Reporting) enhances annual and interim disclosure requirements for reportable segments, effective for fiscal years beginning after December 15, 2024[35] - ASU 2023-09 (Income Tax Disclosures) enhances income tax disclosures, effective for annual periods beginning after December 15, 2024, with no early adoption expected[36] 3. Revenue Recognition This note details NiSource Inc.'s revenue recognition policies and segment reporting changes effective January 1, 2024 - Reportable segments changed from Gas Distributions and Electric Operations to Columbia Operations and NIPSCO Operations as of January 1, 2024[37] Total Operating Revenues by Segment | (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------- | :--------------------------------: | :--------------------------------: | | Columbia Operations | $953.7 | $1,048.9 | | NIPSCO Operations | $752.4 | $916.9 | | Corporate and Other | $0.2 | $0.2 | | Total | $1,706.3 | $1,966.0 | Allowance for Credit Losses | (in millions) | March 31, 2024 | December 31, 2023 | | :-------------------- | :--------------: | :---------------: | | Total Allowance | $31.6 | $22.9 | 4. Noncontrolling Interest This note describes NiSource Inc.'s noncontrolling interests, primarily from NIPSCO's consolidated joint ventures - NIPSCO consolidates four joint ventures (Rosewater, Indiana Crossroads Wind, Indiana Crossroads Solar, Dunns Bridge I) as VIEs, owning and operating wind and solar facilities with a combined nameplate capacity of 869 MW[45] - The NIPSCO Minority Interest Transaction in December 2023 resulted in a $2.16 billion cash capital contribution from Blackstone for an equity interest in NIPSCO Holdings II, with NiSource retaining control[50] VIE Assets and Liabilities | (in millions) | March 31, 2024 | December 31, 2023 | | :-------------------------- | :--------------: | :---------------: | | Total assets | $1,419.0 | $1,433.4 | | Total liabilities | $117.2 | $124.0 | 5. Earnings Per Share This note provides the calculation of basic and diluted earnings per share for NiSource Inc. Earnings Per Share | (in millions, except per share amounts) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------ | :--------------------------------: | :--------------------------------: | | Net Income Available to Common Shareholders - Basic | $344.0 | $319.0 | | Basic Earnings Per Share | $0.77 | $0.77 | | Diluted Earnings Per Share | $0.77 | $0.71 | | Basic Average Common Shares Outstanding | 447.9 | 412.8 | | Diluted Average Common Shares | 449.4 | 447.1 | - The increase in diluted EPS from $0.71 to $0.77 is partly due to the settlement of Equity Units purchase contracts in December 2023, which previously had a dilutive effect[51][54] 6. Equity This note details changes in NiSource Inc.'s equity, including an ATM program and preferred stock redemption - An ATM equity program was established in February 2024, allowing the sale of up to $900.0 million in common stock by December 31, 2025, with $700.0 million remaining available as of March 31, 2024[55] - All 40,000 outstanding shares of Series B and B-1 Preferred Stock were redeemed on March 15, 2024, for $500.0 million, incurring a $14.0 million redemption premium[57] - The redemption of preferred stock led to their delisting from the NYSE and their return to authorized but unissued status[58] 7. Short-Term Borrowings This note outlines NiSource Inc.'s short-term borrowing activities, including commercial paper and credit agreements Short-Term Borrowings | (in millions) | March 31, 2024 | December 31, 2023 | Change | | :-------------------------- | :--------------: | :---------------: | :------: | | Short-term borrowings | $1,222.3 | $3,048.6 | $(1,826.3) | | Commercial paper outstanding | $1,222.3 | $1,061.0 | $161.3 | | Short-term borrowings from securitization | $0.0 | $337.6 | $(337.6) | - The company repaid $1.65 billion in term credit agreements on January 3, 2024, using proceeds from the NIPSCO Minority Interest Transaction[69] - The commercial paper program limit was increased from $1.50 billion to $1.85 billion in February 2024[63] 8. Long-Term Debt This note details NiSource Inc.'s long-term debt, including recent senior unsecured note issuances - Issued $650.0 million of 5.35% senior unsecured notes maturing in 2034, with net proceeds of approximately $642.6 million[71] Long-Term Debt (excluding current portion) | (in millions) | March 31, 2024 | December 31, 2023 | Change | | :-------------------------- | :--------------: | :---------------: | :------: | | Long-term debt | $11,724.6 | $11,055.5 | $669.1 | 9. Gas in Storage This note describes the valuation methodologies and balances for NiSource Inc.'s natural gas in storage - Natural gas in storage is valued using LIFO and weighted-average cost methodologies[72] - The LIFO basis exceeded the replacement cost of the current portion of stored gas by $27.5 million at March 31, 2024, indicating a change from December 31, 2023, where there was no such excess[72] 10. Regulatory Matters This note discusses ongoing regulatory proceedings and their impact on NiSource Inc.'s operations and costs - NIPSCO filed petitions in March 2024 with the IURC to approve direct ownership of the Gibson and Fairbanks solar projects, with final orders expected in August and September 2024, respectively[73] - NIPSCO also filed a petition to defer costs for a new WAM program, an information technology system for optimizing field work, with a final order expected in August 2024[74] - Regulatory deferrals related to renewable energy investments resulted in an increase to depreciation expense of $3.5 million in Q1 2024, compared to a decrease of $4.4 million in Q1 2023[75][76] 11. Risk Management Activities This note explains NiSource Inc.'s use of derivatives to manage commodity price risk and related accounting - NiSource uses derivatives (futures, options, forwards) to mitigate commodity price risk for natural gas purchases, not for speculative trading[79][219] Risk Management Assets and Liabilities | (in millions) | March 31, 2024 (Assets) | March 31, 2024 (Liabilities) | December 31, 2023 (Assets) | December 31, 2023 (Liabilities) | | :------------------------------------ | :-----------------------: | :------------------------: | :------------------------: | :------------------------: | | Derivatives not designated as hedging instruments | $23.2 | $13.5 | $23.3 | $9.4 | - All gains and losses on derivative contracts are deferred as regulatory liabilities or assets and are remitted to or collected from customers through GCA mechanisms, limiting earnings exposure[78][220] 12. Fair Value This note provides fair value measurements for NiSource Inc.'s financial instruments, including derivatives and debt Recurring Fair Value Measurements (March 31, 2024) | (in millions) | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :-----: | :-----: | :-----: | :-----: | | Assets: Risk management assets | $0.0 | $23.2 | $0.0 | $23.2 | | Assets: Available-for-sale debt securities | $0.0 | $150.1 | $0.0 | $150.1 | | Liabilities: Risk management liabilities | $0.0 | $13.5 | $0.0 | $13.5 | - Available-for-sale debt securities, primarily U.S. Treasury and corporate debt, are valued using a matrix pricing model and classified within Level 2[89] Long-term Debt Fair Value | (in millions) | March 31, 2024 (Carrying Amount) | March 31, 2024 (Estimated Fair Value) | | :------------------------------------ | :------------------------------: | :-----------------------------------: | | Long-term debt (including current portion) | $11,748.6 | $10,852.3 | 13. Income Taxes This note details NiSource Inc.'s effective tax rates and deferred tax liabilities and assets Effective Tax Rates | Period | Effective Tax Rate | | :-------------------------- | :----------------: | | Three Months Ended March 31, 2024 | 16.0% | | Three Months Ended March 31, 2023 | 20.3% | - The decrease in the effective tax rate by 4.3% is mainly attributed to lower renewable partnership income and jurisdictional mix, offset by lower amortization of excess deferred federal income tax liabilities[98] - No material changes to unrecognized tax benefits are expected in the next twelve months[99] 14. Pension and Other Postemployment Benefits This note outlines NiSource Inc.'s defined benefit and contribution plans, and postemployment benefit costs - NiSource offers defined contribution and defined benefit retirement plans, and postemployment health care and life insurance benefits[100] Net Periodic Benefit Cost | (in millions) | Pension Benefits (2024) | Pension Benefits (2023) | OPEB (2024) | OPEB (2023) | | :------------------------------------ | :---------------------: | :---------------------: | :---------: | :---------: | | Service cost | $5.4 | $5.1 | $1.3 | $1.3 | | Interest cost | $16.3 | $17.1 | $5.4 | $5.4 | | Expected return on assets | $(23.8) | $(23.6) | $(4.0) | $(3.8) | | Recognized actuarial loss | $7.2 | $8.4 | $0.8 | $0.8 | | Total Net Periodic Benefit Cost | $5.1 | $7.0 | $3.1 | $3.2 | 15. Other Commitments and Contingencies This note describes NiSource Inc.'s guarantees, environmental liabilities, and legal proceedings - Guarantees for BTAs for renewable generation projects totaled $672.3 million at March 31, 2024, increasing from $646.1 million at December 31, 2023[103] - Environmental remediation liability was $77.8 million at March 31, 2024, and MGP site remediation liability was $72.8 million, with a reasonably possible variance of up to $15.1 million[108][111] - New EPA rules on Coal Combustion Residuals (CCRs) were issued on April 25, 2024, and their potential impact is under evaluation[112] 16. Accumulated Other Comprehensive Loss This note details the components and changes in NiSource Inc.'s accumulated other comprehensive loss Accumulated Other Comprehensive Loss (AOCI) | (in millions) | Balance as of January 1, 2024 | Balance as of March 31, 2024 | Change | | :------------------------------------ | :---------------------------: | :--------------------------: | :------: | | Total Accumulated Other Comprehensive Loss | $(33.6) | $(33.8) | $(0.2) | - Net current-period other comprehensive loss was $(0.2) million for Q1 2024, driven by losses on securities and cash flow hedges[114] 17. Business Segment Information This note provides financial data for NiSource Inc.'s revised reportable segments: Columbia and NIPSCO Operations - Reportable segments were revised to Columbia Operations and NIPSCO Operations following the NIPSCO Minority Interest Transaction, reflecting a shift to state-level evaluation[115] Operating Income by Segment | (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (YoY) | | :-------------------- | :--------------------------------: | :--------------------------------: | :--------------------------------: | | Columbia Operations | $362.0 | $351.8 | $10.2 | | NIPSCO Operations | $216.4 | $177.0 | $39.4 | | Corporate and Other | $5.0 | $2.2 | $2.8 | | Consolidated Operating Income | $583.4 | $531.0 | $52.4 | Consolidated Assets by Segment | (in millions) | March 31, 2024 | December 31, 2023 | Change | | :-------------------- | :--------------: | :---------------: | :------: | | Columbia Operations | $13,789.8 | $13,664.5 | $125.3 | | NIPSCO Operations | $14,221.0 | $13,962.6 | $258.4 | | Corporate and Other | $1,327.3 | $3,450.1 | $(2,122.8) | | Consolidated Assets | $29,338.1 | $31,077.2 | $(1,739.1) | 18. Other, Net This note details the components of NiSource Inc.'s 'Other, net' income and expenses Components of Other, Net | (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (YoY) | | :------------------------------------ | :--------------------------------: | :--------------------------------: | :--------------------------------: | | Interest income | $2.5 | $1.8 | $0.7 | | AFUDC equity | $11.3 | $4.8 | $6.5 | | Pension and other postretirement non-service benefit (cost) | $(2.2) | $(3.5) | $1.3 | | Miscellaneous | $(2.4) | $(1.6) | $(0.8) | | Total Other, net | $9.2 | $1.5 | $7.7 | - AFUDC equity saw a significant increase from $4.8 million in Q1 2023 to $11.3 million in Q1 2024[118] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of NiSource Inc.'s financial condition, results of operations, and strategic initiatives - Management's Discussion provides analysis of past financial results, potential future factors, risks, and risk management approaches[122] - The company's goal is to benefit stakeholders through infrastructure investment, safety programs, tariff alignment, and addressing changing customer energy demand, focusing on safety, reliability, customer experience, affordability, and emissions reduction[125] Executive Summary This summary outlines NiSource Inc.'s business model, energy transition strategy, and operational transformation roadmap - NiSource is an energy holding company with utility subsidiaries in six states, generating operating income through rate-regulated businesses (Columbia Operations and NIPSCO Operations)[124] - The company is advancing its energy transition strategy, including retiring coal-fired electric generation by 2028 and replacing it with low- or zero-emission sources, with 1,950 MW of wind/solar BTAs and 1,400 MW of PPAs approved[126] - NIPSCO received IURC approval for full ownership of Cavalry and Dunns Bridge II projects to leverage Inflation Reduction Act (IRA) tax credits, and is seeking similar approval for Gibson and Fairbanks solar projects[126][113] - An enterprise-wide transformation roadmap focuses on operational excellence, safety, and efficiency, with the first phase of the Work and Asset Management (WAM) program anticipated for Q3 2024[130] Summary of Consolidated Financial Results This summary provides an overview of NiSource Inc.'s key consolidated financial performance metrics for the quarter Consolidated Financial Results | (in millions, except per share amounts) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Favorable (Unfavorable) | | :------------------------------------ | :--------------------------------: | :--------------------------------: | :--------------------------------: | | Operating Revenues | $1,706.3 | $1,966.0 | $(259.7) | | Cost of energy | $425.0 | $765.1 | $340.1 | | Operating Income | $583.4 | $531.0 | $52.4 | | Net Income Attributable to NiSource | $365.0 | $333.0 | $32.0 | | Net Income Available to Common Shareholders | $344.3 | $319.2 | $25.1 | | Diluted Earnings Per Share | $0.77 | $0.71 | $0.06 | - The increase in net income available to common shareholders was primarily due to higher revenues, net of cost of energy, driven by rate increases from regulatory outcomes[136] - Preferred dividends and redemption premium increased due to a $14 million Series B preferred redemption premium, partially offset by shortened dividend accrual periods[137] Results and Discussion of Segment Operations This section analyzes the financial and operational performance of NiSource Inc.'s Columbia and NIPSCO Operations segments - Segment reporting now consists of Columbia Operations and NIPSCO Operations, following the NIPSCO Minority Interest Transaction[143] - Columbia Operations aggregates results from NiSource Gas Distribution Group subsidiaries, while NIPSCO Operations aggregates results from NIPSCO Holdings I and its subsidiaries[143] - Operating income is the primary measurement for each segment, with finance, dividends, and taxes managed at the corporate level[116] Columbia Operations This section details the financial and operational performance of NiSource Inc.'s Columbia Operations segment Columbia Operations Financial & Operational Data | (in millions, except MMDth) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Favorable (Unfavorable) | | :------------------------------------ | :--------------------------------: | :--------------------------------: | :--------------------------------: | | Operating Revenues | $956.9 | $1,051.9 | $(95.0) | | Cost of energy | $228.8 | $338.3 | $109.5 | | Operation and maintenance | $210.7 | $220.5 | $9.8 | | Operating Income | $362.0 | $351.8 | $10.2 | | Total Sales and Transportation (MMDth) | 207.3 | 194.3 | 13.0 | | Total Customers | 2,413,724 | 2,403,546 | 10,178 | - New rates from base rate proceedings and regulatory capital programs contributed $34.9 million in favorable revenue changes[148] - The increase in total volumes was primarily attributable to increased industrial usage[150] NIPSCO Operations This section details the financial and operational performance of NiSource Inc.'s NIPSCO Operations segment NIPSCO Operations Financial & Operational Data | (in millions, except GWh/MMDth) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Favorable (Unfavorable) | | :------------------------------------ | :--------------------------------: | :--------------------------------: | :--------------------------------: | | Operating Revenues | $752.7 | $917.2 | $(164.5) | | Cost of energy | $196.2 | $426.8 | $230.6 | | Depreciation and amortization | $132.7 | $108.3 | $(24.4) | | Operating Income | $216.4 | $177.0 | $39.4 | | NIPSCO Electric Sales (GWh) | 3,648.9 | 3,582.8 | 66.1 | | NIPSCO Gas Sales (MMDth) | 116.5 | 117.9 | $(1.4) | - New rates from base rate proceedings, regulatory capital, and DSM programs contributed $65.6 million in favorable revenue changes[163] - NIPSCO continues its electric generation transition, aiming to retire remaining coal units by 2028, replacing them with renewable sources and a new natural gas peaking facility[169][172] Liquidity and Capital Resources This section discusses NiSource Inc.'s financing sources, capital expenditure plans, and recent financing activities - NiSource's financing sources include cash flow from operations, long-term debt, accounts receivable securitization, and a $1.85 billion commercial paper program backed by a revolving credit facility[175] Net Available Liquidity | (in millions) | March 31, 2024 | December 31, 2023 | Change | | :-------------------------- | :--------------: | :---------------: | :------: | | Net Available Liquidity | $1,139.8 | $3,070.8 | $(1,931.0) | - The company expects to invest approximately $16.4 billion in capital expenditures during the 2024-2028 period, supporting generation transition and infrastructure programs[179] - Key financing activities in Q1 2024 included repaying $1.65 billion in term credit agreements, issuing $650.0 million in senior unsecured notes, establishing a $900.0 million ATM equity program, and redeeming $500.0 million in preferred stock[179] Regulatory, Environmental and Safety Matters This section covers NiSource Inc.'s regulatory rate cases, environmental liabilities, and safety initiatives - Regulatory trackers allow for recovery of certain costs (e.g., gas costs, fuel costs) in rates, generally offsetting expense increases with revenue increases and having minimal impact on operating income[193][194][196] Approved Rate Cases (Selected) | Company | Approved ROE | Approved Incremental Revenue (in millions) | Rates Effective | | :-------------------------- | :----------: | :----------------------------------------: | :--------------: | | Columbia of Pennsylvania | None specified | $44.5 | December 2022 | | Columbia of Maryland | None specified | $3.9 | December 2023 | | NIPSCO - Electric | 9.80 % | $261.9 | August 2023 | - NiSource is committed to reducing methane emissions and improving public safety, evaluating proposed PHMSA regulatory revisions for increased leak detection, repair, and distribution system safety[202][203] - The company announced a Net Zero Goal for Scope 1 and Scope 2 GHG emissions by 2040, building on a 72% reduction from 2005 levels by the end of 2023[216] Market Risk Disclosures This section outlines NiSource Inc.'s strategies for identifying, assessing, and managing market risks - NiSource identifies, assesses, monitors, and manages commodity price risk, interest rate risk, and credit risk through a multi-faceted process with oversight by the Risk Management Committee[218] - Commodity price risk from natural gas and power purchases is managed using derivatives, with gains/losses passed through to customers via GCA and FAC mechanisms, limiting earnings exposure[219][220] - A 100 basis point increase in short-term interest rates would have increased interest expense by $2.6 million for the three months ended March 31, 2024[223] Other Information This section addresses critical accounting estimates and references recent accounting pronouncements - No material changes were made to critical accounting estimates as of March 31, 2024[226] - Information on recently issued accounting pronouncements is provided in Note 2 to the Condensed Consolidated Financial Statements[227] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to market risk disclosures provided within Management's Discussion and Analysis of Financial Condition and Results of Operations - Quantitative and qualitative disclosures about market risk are reported in Item 2, 'Management's Discussion and Analysis of Financial Condition and Results of Operations - Market Risk Disclosures'[229] Item 4. Controls and Procedures This section confirms the effectiveness of NiSource Inc.'s disclosure controls and procedures as of March 31, 2024 - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2024, ensuring accurate and timely financial reporting[229] - No material changes in internal control over financial reporting occurred during the most recently completed quarter[230] PART II. OTHER INFORMATION This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits Item 1. Legal Proceedings This section refers to Note 15 for a description of NiSource Inc.'s legal proceedings - Legal proceedings are described in Note 15, 'Other Commitments and Contingencies - B. Legal Proceedings,' of the Notes to the Condensed Consolidated Financial Statements[233] Item 1A. Risk Factors This section states no material changes to risk factors since the 2023 Annual Report on Form 10-K - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2023[234] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports no unregistered sales of equity securities or use of proceeds for the period - No unregistered sales of equity securities or use of proceeds were reported[235] Item 3. Defaults Upon Senior Securities This section reports no defaults upon senior securities for the period - No defaults upon senior securities were reported[236] Item 4. Mine Safety Disclosures This item is not applicable to NiSource Inc. - Mine Safety Disclosures are not applicable to the registrant[236] Item 5. Other Information This section reports no changes to Rule 10b5-1 trading arrangements by directors or officers during Q1 2024 - No director or Section 16 officer adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024[237] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including various agreements and certifications - Exhibits include Certificate of Elimination for Series B Preferred Stock, Form of 5.350% Notes due 2034, Separation Agreement, Second Amended and Restated LLC Agreement of NIPSCO Holdings II, and various RSU/PSU Award Agreements[240] - Certifications from the Chief Executive Officer and Chief Financial Officer are included pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[240] Signature This section provides the official signature for the Form 10-Q report - The report was signed by Gunnar J. Gode, Vice President, Chief Accounting Officer, on May 8, 2024[241]