Financial Data and Key Metrics Changes - The company generated $0.39 per share of net investment income for the quarter on both a GAAP basis and after adjusting for asset acquisition accounting [6][12] - Total investment income for the second quarter was $67 million, significantly up from the prior quarter due to a higher investment portfolio balance [11] - Net asset value as of June 30 was $16.43 per share, down from $16.63 per share as of March 31 [6] Business Line Data and Key Metrics Changes - CGBD funded $376 million of investments into new and existing borrowers, the highest level since its IPO in 2017 [7] - Total investments at CGBD increased from $2.2 billion to $2.3 billion during the quarter after adjusting for $150 million of investments sold to a joint venture [7] Market Data and Key Metrics Changes - The company noted that spreads in the private credit space remain at historically tight levels, which may present a headwind to near-term earnings [9] - Less than 5% of the portfolio has material direct risk from tariffs, indicating a stable exposure to trade policy changes [8][9] Company Strategy and Development Direction - The company remains focused on overall credit performance and portfolio diversification while maintaining target leverage [9] - The management is optimistic about rebuilding the pipeline for a busier end of the year and remains focused on sourcing transactions with significant equity cushions and conservative leverage profiles [8][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about increased deal activity in the second half of the year, particularly in Q4 and into 2026 [23][45] - The company is confident in its ability to invest in quality companies despite current market uncertainties [25][26] Other Important Information - The Board of Directors declared a third-quarter dividend of $0.40 per share, representing an attractive yield of over 11% based on the recent share price [12] - The company has an estimated $0.89 per share of spillover income generated over the last five years, supporting its ability to maintain the quarterly dividend [12] Q&A Session Summary Question: What has driven the tighter spreads over the past year? - Management indicated that deal activity was not as robust in the first half as hoped, but they are optimistic about increased deal activity in the second half of the year [22] Question: Are there concerns about the US economic environment going forward? - Management noted that certainty in tariff policy would be positive for the markets, and they are happy with the companies they are investing in [25][26] Question: What about the unrealized losses recorded in the quarter? - The unrealized losses were primarily company-specific, with a mix of credit issues and market technical factors [28][29] Question: How does the company view potential share buybacks? - Management is considering share buybacks based on stock trading relative to NAV but remains focused on growth [30] Question: What is the timeline for fully deploying the current credit fund? - The goal is to fully utilize the current credit fund within the next two to three quarters [56] Question: Is there a change in the quality of opportunities entering the pipeline? - Management stated that there has not been a material change in the quality of the companies they are able to invest in [62]

Financial Data and Key Metrics Changes - Net income for Q2 2025 was $32 million or $0.53 per diluted share, compared to $27.2 million or $0.48 in the same period last year, reflecting a year-over-year increase [4][7] - The company raised its full-year 2025 financial guidance, now expecting net income between $261 million and $267 million and earnings per diluted share between $4.32 and $4.42, both 2.5% above the respective midpoints of the initial guidance ranges [5][6] Business Line Data and Key Metrics Changes - Revenues for the second quarter increased by approximately $21.1 million from new rates and $1.5 million from continued customer growth [7] - Operating and maintenance expenses increased by 7.5% year-over-year, primarily due to higher labor-related expenses [7] Market Data and Key Metrics Changes - The Oklahoma Corporation Commission approved a $41.1 million revenue increase effective June, and Texas Gas Service filed a rate case requesting a $41.1 million increase [12][13] - The company installed nearly 11,400 new meters in the first half of the year, with a year-over-year increase of over 9% in new customer additions [16] Company Strategy and Development Direction - The company is focused on disciplined execution and long-term growth, with significant capital investments in system safety and reliability [18] - The Austin system reinforcement project is the largest capital investment since the company's separation from OneOak in 2014, aimed at expanding system capacity to support growing demand [15][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and the positive impact of Texas House Bill 4,384, which supports the recovery of system investments [5][25] - The company remains committed to balancing system needs with customer impact, emphasizing affordability in planning and implementation of rate mechanisms [12][14] Other Important Information - The company completed $190 million in capital projects during the second quarter, consistent with the same period last year [15] - The Board of Directors declared a dividend of $0.67 per share, unchanged from the previous quarter [10] Q&A Session Summary Question: Impact of House Bill 4,384 on financials - Management explained that House Bill 4,384 extends deferrals and accruals to all capital expenditures in Texas, potentially adding $4 million to $5 million of annual pretax earnings [24][25] Question: Long-term growth rate considerations - Management confirmed that the updated midpoint of guidance for 2025 will be used as the base for the new five-year range, consistent with past practices [35] Question: Texas capital plans and growth - Management stated that there will be no significant changes to capital plans due to the favorable bill enactment, but growth in Texas jurisdictions is expected to continue [38][39] Question: Texas rate case and consolidation benefits - Management noted that the consolidation of service areas will lead to efficiency and lower administrative costs, benefiting customers [46] Question: Opportunities in power load growth and data centers - Management highlighted significant inbound inquiries for data center and advanced manufacturing projects, emphasizing a strategic approach to enhance system resiliency [48][49] Question: Timeline for potential projects - Management indicated that some projects could manifest in the near term, while others may take longer depending on the required infrastructure [56]

Financial Data and Key Metrics Changes - Adjusted operating earnings for the second quarter were $350 million, supported by strong performance from spread products and higher yields in the bond portfolio [17][19] - Adjusted operating earnings per share was $4.87, with an adjusted figure of $5.12 after accounting for notable items, reflecting a 5% increase from the previous year [20] - Total adjusted capital exceeded $5.3 billion, a 5% increase since year-end 2024, with risk-based capital estimated at 566% [13][34] Business Line Data and Key Metrics Changes - Retail annuity sales reached $4.4 billion, a 9% increase from the first quarter and a 4% increase year-over-year, driven by RILA and fixed annuity sales [7][19] - RILA account balances increased by nearly 80% year-over-year, with sales approaching $1.4 billion, up 16% from the previous quarter [6][20] - Variable annuity net outflows improved, totaling $2.2 billion, down 27% year-over-year and 39% from the first quarter [11][19] Market Data and Key Metrics Changes - Average retail annuity AUM grew to $249 billion, up from year-end 2024, supported by strong separate account returns [22] - The company experienced a 9.4% return on separate account assets, contributing approximately $19 billion to AUM [45] Company Strategy and Development Direction - The company remains committed to a balanced capital management strategy, focusing on disciplined investments, maintaining a strong balance sheet, and consistent capital returns to shareholders [15][32] - Jackson is exploring opportunities for risk transfer and potential M&A to create new streams of capital generation [55][74] - The company aims to enhance its product offerings and distribution capabilities to meet diverse market needs [62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong capital generation and ability to support future growth initiatives while returning capital to shareholders [14][29] - The need for financial security in retirement is emphasized, with a focus on providing flexible protection and income-oriented solutions [15][37] Other Important Information - The company launched a new digital experience for financial professionals to enhance service and support [11][12] - Jackson was recognized in Barron's annual 100 Best Annuities Guide, highlighting its commitment to product innovation [12] Q&A Session Summary Question: Excess capital position and potential uses of capital - Management reiterated the philosophy of generating excess capital first, then returning it to shareholders while maintaining a strong balance sheet [41][43] Question: AUM levels and equity market impact on earnings - Strong equity market performance contributed to AUM growth, with expectations of solid margins despite some variable expense components [45][46] Question: Strategic considerations for business remixing and risk transfer - Management is open to strategic partnerships and risk transfer opportunities that enhance shareholder value while maintaining a diversified product mix [50][55] Question: RILA product features and competition - RILA sales momentum is strong, with competitive offerings including income options, positioning the company well in the market [61][62] Question: Managing RILA and legacy VA risk - The company manages RILA and legacy VA business separately, leveraging natural offsets in equity risk for efficiency [72] Question: Potential for inorganic growth using Brook Re - Management sees opportunities to leverage Brook Re for M&A transactions, enhancing capital generation and free cash flow [74][83]

Financial Data and Key Metrics Changes - The company reported a record-setting quarter for revenues and average revenue per horsepower, with average pricing reaching $21.31 per horsepower, a 1% increase sequentially and a 5% increase year-over-year [13][5] - Second quarter net income was $28.6 million, operating income was $76.6 million, and net cash provided by operating activities was $124.2 million [13][12] - Adjusted gross margins for the second quarter were 65.4%, with average utilization remaining consistent at 94.4% [13][14] Business Line Data and Key Metrics Changes - The total fleet horsepower at the end of the quarter was approximately 3.9 million horsepower, unchanged from the prior quarter [14] - Average active horsepower remained flat at 3.55 million, while the company anticipates Q4 active horsepower to exceed 3.6 million, setting a new record [10][14] Market Data and Key Metrics Changes - The company noted significant growth in natural gas demand driven by AI and cloud services, with major tech firms expected to spend over $265 billion on infrastructure this year [6][7] - The July EIA short-term energy outlook projected a 6% annualized gas growth in the Permian, with natural gas production from the Northeast and Haynesville also expected to grow [8] Company Strategy and Development Direction - The company is optimistic about the future, citing a strong pipeline of RFQs and expected growth from top customers, who comprise over 45% of revenues [6][5] - The shared services model with Energy Transfer is expected to yield benefits, including licensing savings and enhanced IT functionality [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged bearish macroeconomic factors but expressed confidence in the company's execution and customer resolve to maintain production levels [5] - The company anticipates a meaningful increase in contracted horsepower in the Northeast and sees strong demand across various basins [38][5] Other Important Information - The company maintained its 2025 guidance for adjusted EBITDA in the range of $590 million to $610 million and distributable cash flow between $350 million and $370 million [15] - The company is exploring refinancing options for its September 2027 notes and expects to extend its ABL facility [16][41] Q&A Session Summary Question: Gross margin trends - Management indicated that gross margins have fluctuated between 65% to 67% over the past four years and expect them to align with historical averages as staffing improves [21][22] Question: Contracted horsepower in the Northeast - Approximately 25% to 30% of business in the Northeast is on month-to-month contracts, with expectations for better dollar per horsepower revenue in the future [24] Question: Update on sold or retired equipment - There were no material sales of equipment during the quarter, and utilization was flat, with expectations for increased active horsepower in Q4 [31][32] Question: G&A costs and shared services - G&A costs were lower due to shared services, but management cautioned against making long-term forecasts as they are still early in the process [33][34] Question: Demand for compression services - Demand is increasing across oil and gas producing basins, particularly in dry gas basins, with expectations for more contracting in the coming months [38] Question: Electric motor drive market - There has been a shift back to natural gas engine-driven compressors, with less focus on electric drive opportunities [40] Question: Capital allocation and distribution - The company aims to maintain its distribution while reducing leverage, with plans to refinance its ABL and potentially increase cash for business growth [41][42] Question: CapEx and new horsepower costs - The cost to acquire new horsepower has increased, but the company is still able to achieve necessary margins for new equipment [46][47]

Financial Data and Key Metrics Changes - The company reported a net income of $411 million and adjusted EBITDA of $566 million for Q2 2025, compared to a net loss of $162 million and adjusted EBITDA of $584 million in the same quarter of 2024 [7][25]. - The dollar's depreciation against other currencies contributed positively, reversing previous foreign exchange effects by $220 million [25]. - The company expects earnings growth to accelerate in the remainder of 2025 due to strong market conditions and cost reduction efforts [6][15]. Business Line Data and Key Metrics Changes - Phosphate production guidance for the third quarter is set at 1.8 million to 2 million tons, with annual guidance now at 6.9 million to 7.2 million tons [11]. - Potash production guidance has been increased to 9.3 million to 9.5 million tons due to strong global demand and completed maintenance activities [12]. - The Mosaic Fertilizantes segment is expected to see EBITDA growth driven by cost reductions and higher realized prices, despite facing credit issues [13][31]. Market Data and Key Metrics Changes - The global phosphate market remains tight, with robust farmer demand, particularly from India, which is addressing two years of pent-up demand [9][20]. - Potash prices are expected to hold steady due to strong demand and limited supply, with U.S. customers indicating normal demand despite higher prices [21][23]. - Brazilian fertilizer shipments are anticipated to reach record levels, supported by increased input demand in the first half of the year [20]. Company Strategy and Development Direction - The company is focusing on improving operating performance and enhancing reliability in its phosphate production business, with significant maintenance work now completed [5][10]. - The new Pomeranci facility adds 1 million tons of distribution capacity, reinforcing the company's market presence in Brazil [13]. - The company aims to achieve $250 million in cost reductions by 2026 through further operational efficiencies and automation [34]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong market fundamentals for fertilizers, despite some macroeconomic pressures affecting agriculture [16][17]. - The company does not foresee a significant price reset in the phosphate market in the near term, expecting tight supply dynamics to persist into 2026 [8][20]. - Management highlighted the importance of market access as a competitive advantage, allowing the company to respond to demand fluctuations effectively [6][15]. Other Important Information - The company is making progress on capital allocation, with expectations for stronger free cash flow in the second half of the year, which will facilitate debt repayment and shareholder returns [15]. - The Biosciences segment has seen revenues more than double compared to the previous year, with expectations for positive EBITDA contributions starting in Q4 [14]. Q&A Session Summary Question: Share price performance and changes since Investor Day - Management acknowledged the market's negative reaction and clarified that while there were extraordinary expenses, the underlying performance remains strong [38][40]. Question: Run rate and production trends - Management indicated that July's run rate was not as expected due to delays but expressed optimism for August and September based on encouraging production numbers [46][52]. Question: Idle and turnaround costs - Management provided insights on the expected ramp-down of extraordinary costs, emphasizing the variability in turnaround expenses and historical averages [54][56]. Question: Hurricane season preparations - The company has implemented measures to harden assets against potential weather disruptions and has completed crisis planning for the hurricane season [61][63]. Question: Tariff impacts on phosphate imports - Management discussed the current tariff situation, noting a 10% tariff on phosphate imports and its indirect effects on the market [70][72]. Question: Specialty phosphate pricing and market conditions in Brazil - Management addressed concerns about pricing in the phosphate division and the impact of government financing support for farmers, highlighting a slower market in Brazil [91][96].

Financial Data and Key Metrics Changes - The company reported siding revenue growth of 11% year-over-year, resulting in $755 million in sales and $142 million in EBITDA for the quarter [6][10][15] - Adjusted earnings per share for the quarter were $0.99, despite a negative impact of $102 million from lower OSB prices [6][10] - Operating cash flow was $162 million, supported by $142 million of EBITDA and seasonal reductions in working capital [15] Business Segment Data and Key Metrics Changes - The Siding segment achieved record volume, revenue, and EBITDA, with an EBITDA margin of 27% [6][12] - OSB segment EBITDA was $19 million, outperforming guidance due to exceptional cost control measures [14][15] - Siding OEE reached 78%, while OSB OEE hit 79%, indicating improved operational efficiency [6][10] Market Data and Key Metrics Changes - U.S. housing starts remain below long-term average demand levels, contributing to falling commodity OSB prices [5][14] - The demand environment for OSB is described as unusually difficult, with prices at multiyear lows [17][18] - The company anticipates a flat volume for Siding in Q3 compared to the previous year, with a slight price increase expected [17] Company Strategy and Development Direction - The company aims to capture market share through its SmartSide product, which is expected to outperform other siding substrates [7][19] - Continued investment in sales and marketing is planned to drive growth, particularly in the Siding segment [76][78] - The company is focused on cost containment and operational efficiency in the OSB segment to navigate the current market challenges [14][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the Siding segment despite current market challenges [7][19] - The company is prepared to manage capacity and costs in response to fluctuating demand and pricing in the OSB market [14][18] - Management noted that while the demand environment is weakening, the Siding segment's growth driven by material conversion and product innovation remains strong [19] Other Important Information - The company was recognized as the safest company in 2024 by APA, marking the third consecutive year of this honor [8][9] - The company has $1.1 billion in liquidity, including $333 million in cash, positioning it well for future investments [15] Q&A Session Summary Question: Insights on Siding margin decrement in Q3 - Management indicated that Q3 might not reach the peak of Q2, suggesting a balanced approach to revenue and a cautious outlook on EBITDA [24][26] Question: Early trends in Q3 and CapEx implications - Management noted a strong carryover from Q1 into Q2 but observed some weakening in the order file as the quarter progressed [30] Question: Cost control measures in OSB - Management highlighted outstanding operational efficiency and aggressive cost containment as key drivers for better-than-expected EBITDA in OSB [38][39] Question: Impact of shrinking home sizes on Siding - Management acknowledged that while shrinking home sizes present a slight headwind, the overall market share opportunities in repair and remodel will outweigh this factor [40][41] Question: Siding guidance for the back half of the year - Management expects healthy volume growth in Q4, with a seasonal pattern indicating a shift between Q2 and Q3 [44] Question: OSB operating rates and production strategy - Management reported mid-eighty percent operating rates for OSB and emphasized matching production with demand to avoid inventory buildup [45][47] Question: Siding sell-through and channel inventories - Management expressed confidence in good sell-through in Q2 and reasonable channel inventories, supporting growth expectations for the fourth quarter [51][52] Question: Competitive dynamics in new residential market - Management noted opportunities for market share gains among smaller and medium-sized builders, despite exclusivity agreements with larger peers [100][102]

Financial Data and Key Metrics Changes - Overall net sales for Q2 2025 were $58.2 million, down 9% from $63.9 million in Q2 2024 [5] - Consolidated gross earnings were 43.3% of net sales compared to 43.9% in the previous year [5] - Earnings from operations were $3.9 million, down 42% from $6.7 million in Q2 2024 [6] - Net earnings totaled $2.3 million, down 60% from $5.6 million last year [6] - Diluted earnings per share were $0.24 in Q2 2025, compared to $0.59 in Q2 2024 [6] Business Line Data and Key Metrics Changes - North American wholesale segment net sales were $45.6 million, down 9% from $50.3 million last year [6] - Retail segment net sales were $6.8 million, down 11% from $7.6 million in 2024 [12] - Florsheim Australia net sales were $5.8 million, down 4% from $6.1 million in 2024 [14] - Retail gross earnings as a percentage of net sales were 66.6% in 2025 compared to 67.5% in 2024 [12] Market Data and Key Metrics Changes - The overall men's dress, dress casual, and basic casual markets are under pressure, with the traditional men's business being one of the first categories impacted in a slowing footwear market [20] - BOGS brand sales were down 14% compared to 2024 due to sluggish consumer demand in the outdoor category [21] - Retailer inventories for outdoor footwear are now very clean, indicating cautious inventory management [22] Company Strategy and Development Direction - The company is actively working to diversify its supply chain away from reliance on China, which previously accounted for 75% of its factory base [18] - The focus is on maintaining quality and value across all brands while adapting to the evolving tariff environment [19] - The company aims to grow its wholesale business in Australia and South Africa while managing retail operations carefully [54][58] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer sentiment is cautious due to affordability issues and uncertainty around tariffs, leading to reduced discretionary spending [17] - The expectation is that the challenging environment will persist through the second half of the year [21] - The company is optimistic about new product introductions and expanding its product line to be less dependent on cold weather demand [21] Other Important Information - The consolidated effective tax rate was 51.1% for the quarter, up from 25.1% in the previous year due to a valuation allowance on deferred tax assets [15] - Cash and marketable securities totaled $83.8 million with no debt outstanding on the revolving line of credit [15] - The Board of Directors declared a cash dividend of $0.27 per share, payable on September 30, 2025 [16] Q&A Session Summary Question: Can you quantify the change in inventory due to pre-purchasing? - Management indicated that inventory levels are returning to normal, expected to be in the $70 to $75 million range, but the dollar value may increase due to tariffs [31][32] Question: What is the approach if warning flags arise regarding wholesale customers' creditworthiness? - Management stated they monitor the situation closely and aim to work with retailers while being realistic about market changes [50] Question: What is the strategic importance of Florsheim Australia? - Management emphasized the long-standing presence in Australia, the dominance in the market, and the potential for profitability through careful management of retail and wholesale operations [52][54]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported core earnings of $0.84 per share, EBITDAX of $1.8 billion, and operating cash flow of $1.5 billion, with free cash flow of $589 million generated after funding capital requirements [15][16] - The net debt to EBITDAX ratio improved to 0.9 times, reflecting ongoing efforts to maintain a strong balance sheet [17] - The company exited the quarter with total liquidity of $4.8 billion, including $1.8 billion in cash [16] Business Line Data and Key Metrics Changes - Production in the Delaware Basin drove performance, with capital spending coming in 7% below guidance, resulting in significant free cash flow [8][15] - Operational efficiencies led to a 12% year-over-year improvement in drilling costs and a 15% improvement in completion costs [10][11] - The company achieved $1 million in savings per well in the Williston Basin since the Grayson Mill acquisition [11] Market Data and Key Metrics Changes - The company raised its full-year oil production outlook to a range of 384,000 to 390,000 barrels per day, while reducing total capital guidance by $100 million to a range of $3.6 billion to $3.8 billion [22] - The breakeven funding level remains competitive at less than $45 WTI, positioning the company to generate approximately $3 billion in free cash flow for the year [22] Company Strategy and Development Direction - The company is focused on operational excellence, financial strength, and delivering value to shareholders, with a business optimization plan aimed at generating an additional $1 billion in annual free cash flow by the end of next year [5][6] - Recent transactions, including the sale of the Matterhorn pipeline and acquisition of Cottondraw Midstream, are intended to enhance asset portfolio and support future growth [6][19] - The company is pursuing additional opportunities in the midstream space and maximizing gas production realizations through new marketing agreements [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the $1 billion free cash flow target on time, emphasizing a culture of continuous improvement and technology-driven operational enhancements [6][15] - The company anticipates stable production of 387,000 barrels of oil per day in Q3, with lower capital costs expected compared to the first two quarters [24] - Management highlighted the positive impact of recent federal legislation on tax benefits, projecting a current tax rate of around 10% for 2025, down from 15% [23] Other Important Information - The company is committed to a capital allocation framework that balances high-return investments with substantial cash returns to shareholders, including dividends and share repurchases [16][22] - The business optimization plan is on track, with 40% of the $1 billion goal achieved within four months [25][40] Q&A Session Summary Question: Non-oil realizations and marketing agreements - Management acknowledged the challenges with NGLs and local gas prices, emphasizing efforts to move gas production away from Waha to Gulf Coast demand centers [32][34] Question: Business optimization progress - Management expressed encouragement with the 40% achievement in the business optimization plan, highlighting the role of technology and AI in driving efficiencies [38][39] Question: Production maintenance levels for 2026 - Management indicated that while production output is improving, they are not resetting maintenance levels but rather seeking to balance production and capital investment [45][46] Question: Bakken and Eagle Ford production outlook - Management confirmed that well productivity in the Bakken is consistent with expectations, while in the Eagle Ford, they are focused on growing production back to pre-split levels [64][66] Question: Allocation of incremental cash flow from tax benefits - Management stated that the priority remains on sustaining dividends and debt reduction, with no immediate changes to the shareholder return framework [71][89]

Financial Data and Key Metrics Changes - NiSource reported second quarter adjusted EPS of $0.22, bringing the year-to-date total to $1.19, which is an increase of $0.13 from the same period last year [6][24] - The company narrowed its 2025 adjusted EPS guidance to the upper half of the previously stated range of $1.85 to $1.89 [7][25] - The company reaffirmed long-term financial commitments, projecting 6% to 8% annual adjusted EPS growth and 8% to 10% rate base growth through 2029 [25][30] Business Line Data and Key Metrics Changes - Strong performance was noted in both the NIPSCO and Columbia segments, which continue to outperform expectations [24] - The operational excellence initiatives, including Project Apollo and WAM, have enabled consistent and high-quality results across the business [25] Market Data and Key Metrics Changes - Customer growth was observed at nearly 1% in the electric business and 0.6% in the gas business, both surpassing forecasts [26] - Metro growth in Columbus, Ohio was reported to be 38% higher than the national average last year, indicating strong economic tailwinds [26] Company Strategy and Development Direction - NiSource's strategy focuses on disciplined capital deployment, operational excellence, and fostering constructive regulatory relationships [5][6] - The company is advancing its internal AI capabilities to enhance operational efficiency and create a sustainable competitive edge [7][8] - Regulatory achievements include a $40.7 million revenue increase in Virginia and a $257 million revenue uplift in Indiana, reinforcing stakeholder relationships [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for data centers in Northern Indiana and emphasized a disciplined approach to executing this opportunity [34][35] - The company remains focused on maximizing opportunities for stakeholders, including existing customers and communities, while maintaining financial integrity [35][16] Other Important Information - NiSource's five-year capital plan is valued at $19.4 billion, with 48% allocated to gas system hardening [22] - The company is actively engaging in commercial development of over $2 billion in identified upside projects [23] Q&A Session Summary Question: How is NiSource thinking about the data center opportunity in NIPSCO territory? - Management highlighted strong demand for data centers and emphasized a disciplined approach to execution, ensuring existing customers are protected while serving new ones [34][35] Question: How do the Genco application and counterparty negotiations relate to each other? - Management clarified that the Genco declination process and counterparty negotiations are separate but ongoing, with confidence in achieving a positive outcome [39][40] Question: What is the status of coal plant retirements and their impact on supply? - Management confirmed plans to retire the Schaeffer plant by the end of the year while working closely with state officials to align on capacity needs [58][59] Question: How does the financing strategy relate to the Genco structure? - Management indicated flexibility in financing strategies and emphasized the importance of strengthening the balance sheet to support future operations [62][64] Question: What is the timeline for the Genco declination process? - Management confirmed that all final filings are due soon, with an order expected by the end of the third quarter [78]

Financial Data and Key Metrics Changes - The company reported total revenue of $286 million, slightly down from $288 million in the same period last year, with net income of $48 million or $3.96 per diluted share, a 4% increase year-over-year [17][22]. - Gross profit increased by $6 million to $88 million, with a gross margin of 30.7%, which is 230 basis points higher than the prior year [20][22]. - The book-to-bill ratio was 1.3 times, with a backlog growth of 7% to a total of $1.4 billion [7][18]. Business Line Data and Key Metrics Changes - Revenue from the electric utility market increased by 31%, while revenues from the commercial and other industrial market and the traction market increased by 1861% [19]. - Domestic revenues decreased by 8% to $225 million, while international revenues rose by 30% to $62 million, driven by increased project volume in Canada and the Middle East [19]. Market Data and Key Metrics Changes - The oil and gas and petrochemical markets saw revenue declines of 368% and 30% respectively, attributed to challenging prior year comparisons [20]. - The company noted strong demand in the electric utility market, supported by electrification trends in the US, Canada, and the UK [16][27]. Company Strategy and Development Direction - The company announced an agreement to acquire REMSAK Limited, enhancing its electrical automation platform and allowing for a 100% Powell-built solution for the utility market [11][12]. - The focus remains on diversifying the business and expanding the product portfolio, with new product initiatives aimed at improving the mix of product versus project-based revenues [14][16]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand across all markets and the ability to deliver value to customers and stakeholders [16][23]. - The fundamentals of the US natural gas market and the ongoing momentum in data center capacity growth were highlighted as positive indicators for future order strength [15][16]. Other Important Information - Selling, general, and administrative expenses increased by $3 million to $25 million, driven by higher compensation and acquisition-related expenses [21][22]. - The company reported cash and short-term investments of $433 million, with no debt [22]. Q&A Session Summary Question: What does the opportunity pipeline look like now? - Management indicated a strong pipeline in the utility market and ongoing activity in the oil and gas segment, with significant opportunities ahead [25][26]. Question: How far does the revenue visibility extend? - The backlog is transparent, with 65% expected to convert to revenue over the next twelve months, providing good visibility into future earnings [28][29]. Question: What contributed to the improvement in gross margin? - Approximately 150 basis points of the gross margin improvement was attributed to project closeouts, with the remainder from productivity and volume leverage [30][31]. Question: Any unusual items affecting SG&A expenses? - Higher variable compensation and acquisition-related expenses were noted, but nothing unusual beyond that [32]. Question: What is the visibility in the electric utility market? - Management expressed optimism about the electric utility market, driven by electrification and data center demand [36][40]. Question: How does the acquisition of REMSAK fit into the strategy? - The acquisition is seen as a key building block for enhancing electrical automation capabilities and expanding into the North American utility market [41][44]. Question: What is the outlook for pricing in the market? - While pricing is stable, management noted that it may not improve significantly in the near term due to competitive dynamics [58][60].