NISOURCE INC. Q4 FY2024 earnings call

• Recapped a successful 2024 with delivery on business plan, focusing on constructive regulatory foundation, operating excellence, and financial commitments.
• Invested $6.9 billion in capex over 24 months, with regulators approving recovery of $340 million in revenue in 2024.
• Advanced operational excellence, with safety metrics improving, AI initiative reducing inefficiencies, and Apollo Continuous Improvement Program achieving $77 million in O&M savings.
• Active on regulatory front with rate case and rider filings, including NIPSCO electric rate case settlement and approvals in Pennsylvania, Kentucky, and Virginia.
• Base CapEx plan increased to $19.4 billion due to economic development projects in Indiana and Virginia, with gas utilities driving over 60% of the plan.
• Progressed data center strategies in Northern Indiana, filing declination petition with IURC for NIPSCO Genco to serve large load customers.

NiSource Inc. operates in six regulated jurisdictions. Gas utilities drive over 60% of the five-year capital expenditure (CapEx) plan. The company invested $6.9 billion in capex across six states over the last 24 months, with regulatory processes approving recovery of $340 million in revenue in 2024.

• Raised 2025 adjusted EPS guidance to $1.85 to $1.89 per share, consistent with 6%-8% growth from 2024's $1.75.
• Five-year base CapEx plan increased to $19.4 billion, driving 8%-10% rate base growth from 2025-2029 and annual adjusted EPS growth of 6%-8%.
• Upside CapEx plan increased by $400 million to $2.2 billion to reflect need for new generation capacity.
• Confident in achieving long-term growth rate with continued regulatory progress and prudent capital allocation.

Forward-looking statements subject to risks and uncertainties, including state policy and regulation impacts, evolving federal policy mandates, and market conditions affecting capital allocation and returns.

Q: Julien Dumoulin-Smith asked about Genco filing, risk-sharing considerations, and timing of commercial arrangements.

A: Michael Luhrs and Shawn Anderson discussed Genco as a regulated entity protecting existing customers, enabling speed and flexibility for new customers, maintaining financial integrity, and Shawn mentioned balance sheet strength for financing.

Q: Shar Pourreza followed up on data center timing, financing for incremental CapEx.

A: Lloyd Yates and Shawn Anderson said discussions are progressing well, with cash from operations, ATM program, and junior subordinated notes as financing avenues.

Q: Richard Sunderland asked about IURC approval for Genco filing and coal generation.

A: Michael Luhrs said IURC approval needed for Genco entity but not for announcing deals, and discussed coal generation and MISO changes.

Q: Travis Miller asked about La Porte facility status and gas system serving data centers.

A: Michael Luhrs said negotiations with counterparties progress, and gas system serves data centers with CapEx involved.

Q: Durgesh Chopra asked about returns and timing from Genco entity.

A: Lloyd Yates said Genco could provide returns above regulated, and timing is 2025 when contracts are signed.

Q: Steve Fleishman asked about IURC process for Genco filing and customer tone.

A: Michael Luhrs and Melody Birmingham said process is standard, with expected Q3 2025 ruling, and no change in customer tone regarding data centers.