NISOURCE INC. [NI-PB] Filings

10-Q 1 nix-20230331.htm 10-Q nix-20230331

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 March 31, 2023

☐ 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.

(Exact name of registrant as specified in its charter)


DE		35-2108964
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

801 East 86th Avenue
Merrillville,	IN	46410
(Address of principal executive offices)		(Zip Code)

(877) 647-5990

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	NI	NYSE
Depositary Shares, each representing a 1/1,000th ownership interest in a share of 6.50% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, liquidation preference $25,000 per share and a 1/1,000th ownership interest in a share of Series B-1 Preferred Stock, par value $0.01 per share, liquidation preference $0.01 per share	NI PR B	NYSE
Series A Corporate Units	NIMC	NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)

Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ¨ Emerging growth company ☐ Non-accelerated filer ¨ Smaller reporting company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Stock, $0.01 Par Value: 413,063,219 shares outstanding at April 25, 2023.

NISOURCE INC.

FORM 10-Q QUARTERLY REPORT

FOR THE QUARTER ENDED MARCH 31, 2023

Table of Contents


			Page

	Defined Terms		3

PART I	FINANCIAL INFORMATION

	Item 1.	Financial Statements - unaudited

		Condensed Statements of Consolidated Income (unaudited)	7

		Condensed Statements of Consolidated Comprehensive Income (unaudited)	8

		Condensed Consolidated Balance Sheets (unaudited)	9

		Condensed Statements of Consolidated Cash Flows (unaudited)	11

		Condensed Statements of Consolidated Equity (unaudited)	12

		Notes to Condensed Consolidated Financial Statements (unaudited)	14

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52

	Item 4.	Controls and Procedures	52

PART II	OTHER INFORMATION

	Item 1.	Legal Proceedings	53

	Item 1A.	Risk Factors	53

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53

	Item 3.	Defaults Upon Senior Securities	53

	Item 4.	Mine Safety Disclosures	53

	Item 5.	Other Information	53

	Item 6.	Exhibits	54

	Signature		55


DEFINED TERMS
The following is a list of frequently used abbreviations or acronyms that are found in this report:

NiSource Subsidiaries and Affiliates
Columbia of Kentucky			Columbia Gas of Kentucky, Inc.
Columbia of Maryland			Columbia Gas of Maryland, Inc.
Columbia of Massachusetts			Bay State Gas Company
Columbia of Ohio			Columbia Gas of Ohio, Inc.
Columbia of Pennsylvania			Columbia Gas of Pennsylvania, Inc.
Columbia of Virginia			Columbia Gas of Virginia, Inc.
NIPSCO			Northern Indiana Public Service Company LLC
NiSource ("we," "us" or "our")			NiSource Inc.
Rosewater			Rosewater Wind Generation LLC and its wholly owned subsidiary, Rosewater Wind Farm LLC
Indiana Crossroads Wind			Indiana Crossroads Wind Generation LLC and its wholly owned subsidiary, Indiana Crossroads Wind Farm LLC

Abbreviations and Other

AFUDC			Allowance for funds used during construction

AOCI			Accumulated Other Comprehensive Income (Loss)

ASU			Accounting Standards Update
ATM			At-the-market
BTA			Build-transfer agreement


CCRs			Coal Combustion Residuals
CEP			Capital Expenditure Program
CERCLA			Comprehensive Environmental Response Compensation and Liability Act (also known as Superfund)
Corporate Units			Series A Corporate Units
COVID-19 ("the COVID-19 pandemic" or "the pandemic")			Novel Coronavirus 2019 and its variants, including the Delta and Omicron variants, and any other variant that may emerge

DPU			Department of Public Utilities
DSIC			Distribution System Improvement Charge

EPA			United States Environmental Protection Agency
EPS			Earnings per share
Equity Units			Series A Equity Units
FAC			Fuel adjustment clause
FASB			Financial Accounting Standards Board
FERC			Federal Energy Regulatory Commission
FMCA			Federally Mandated Cost Adjustment
GAAP			Generally Accepted Accounting Principles
GCA			Gas cost adjustment
GHG			Greenhouse gases
GWh			Gigawatt hours

IRA			Inflation Reduction Act
IRP			Infrastructure Replacement Program

IURC			Indiana Utility Regulatory Commission
JV			Joint Venture


DEFINED TERMS
LIBOR			London InterBank Offered Rate
LIFO			Last In, First Out
LIHEAP			Low Income Heating Energy Assistance Programs
Massachusetts Business			All of the assets sold to, and liabilities assumed by, Eversource pursuant to the Asset Purchase Agreement
MGP			Manufactured Gas Plant
MISO			Midcontinent Independent System Operator
MMDth			Million dekatherms
MW			Megawatts
MWh			Megawatt hours

NYMEX			New York Mercantile Exchange
OPEB			Other Postemployment Benefits


PHMSA			Pipeline and Hazardous Materials Safety Administration
PPA			Power Purchase Agreement


PUCO			Public Utilities Commission of Ohio


RNG			Renewable Natural Gas

SAVE			Steps to Advance Virginia's Energy Plan
Scope 1 GHG Emissions			Direct emissions from sources owned or controlled by us (e.g., emissions from our combustion of fuel, vehicles, and process emissions and fugitive emissions)
Scope 2 GHG Emissions			Indirect emissions from sources owned or controlled by us
SEC			Securities and Exchange Commission
Section 201 Tariffs			Tariffs imposed by Executive Order from the President of the U.S. on certain imported solar cells and modules at a rate of 15%, which were recently extended to 2026
SMRP			Safety Modification and Replacement Program
SMS			Safety Management System
SOFR			Secured Overnight Financing Rate
STRIDE			Strategic Infrastructure Development Enhancement
TCJA			An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (commonly known as the Tax Cuts and Jobs Act of 2017)
TDSIC			Transmission, Distribution and Storage System Improvement Charge
U.S. Attorney's Office			U.S. Attorney's Office for the District of Massachusetts

VIE			Variable Interest Entity

Note regarding forward-looking statements

This Quarterly Report on Form 10-Q 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 realized. Any one of those factors could cause actual results to differ materially from those projected. These forward-looking statements include, but are not limited to, statements concerning our plans, strategies, objectives, expected performance, expenditures, recovery of expenditures through rates, stated on either a consolidated or segment basis, and any and all underlying assumptions and other statements that are other than statements of historical fact. Expressions of future goals and expectations and similar expressions, including "may," "will," "should," "could," "would," "aims," "seeks," "expects," "plans," "anticipates," "intends," "believes," "estimates," "predicts," "potential," "targets," "forecast," and "continue," reflecting something other than historical fact are intended to identify forward-looking statements. All forward-looking statements are based on assumptions that management believes to be reasonable; however, there can be no assurance that actual results will not differ materially.

Factors that could cause actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this Quarterly Report on Form 10-Q include, among other things, our ability to execute our business plan or growth strategy, including utility infrastructure investments; potential incidents and other operating risks associated with our business; our ability to adapt to, and manage costs related to, advances in, or failures of, technology; impacts related to our aging infrastructure; our ability to obtain sufficient insurance coverage and whether such coverage will protect us against significant losses; the success of our electric generation strategy; construction risks and natural gas costs and supply risks; fluctuations in demand from residential and commercial customers; fluctuations in the price of energy commodities and related transportation costs or an inability to obtain an adequate, reliable and cost-effective fuel supply to meet customer demands; the attraction and retention of a qualified, diverse workforce and ability to maintain good labor relations; our ability to manage new initiatives and organizational changes; the actions of activist stockholders; the performance of third-party suppliers and service providers; potential cybersecurity attacks; increased requirements and costs related to cybersecurity; any damage to our reputation; any remaining liabilities or impact related to the sale of the Massachusetts Business; the impacts of natural disasters, potential terrorist attacks or other catastrophic events; the physical impacts of climate change and the transition to a lower carbon future; our ability to manage the financial and operational risks related to achieving our carbon emission reduction goals, including our Net-Zero Goal (as defined below); our debt obligations; any changes to our credit rating or the credit rating of certain of our subsidiaries; any adverse effects related to our equity units; adverse economic and capital market conditions or increases in interest rates; inflation; recessions; economic regulation and the impact of regulatory rate reviews; our ability to obtain expected financial or regulatory outcomes; continuing and potential future impacts from the COVID-19 pandemic; economic conditions in certain industries; the reliability of customers and suppliers to fulfill their payment and contractual obligations; the ability of our subsidiaries to generate cash; pension funding obligations; potential impairments of goodwill; the outcome of legal and regulatory proceedings, investigations, incidents, claims and litigation; potential remaining liabilities related to the Greater Lawrence Incident; compliance with applicable laws, regulations and tariffs; compliance with environmental laws and the costs of associated liabilities; changes in taxation; other matters in the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, many of which risks are beyond our control. In addition, the relative contributions to profitability by each business segment, and the assumptions underlying the forward-looking statements relating thereto, may change over time.

All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events or changes to the future results over time or otherwise, except as required by law.


Index			Page
Condensed Statements of Consolidated Income (unaudited)			7
Condensed Statements of Consolidated Comprehensive Income (unaudited)			8
Condensed Consolidated Balance Sheets (unaudited)			9
Condensed Statements of Consolidated Cash Flows (unaudited)			11
Condensed Statements of Consolidated Equity (unaudited)			12
Notes to Condensed Consolidated Financial Statements (unaudited)			14
1. Basis of Accounting Presentation			14
2. Recent Accounting Pronouncements			14
3. Revenue Recognition			14
4. Earnings Per Share			16
5. Equity			18
6. Gas in Storage			19


7. Regulatory Matters			20
8. Risk Management Activities			20
9. Fair Value			22


10. Income Taxes			25
11. Pension and Other Postretirement Benefits			25
12. Variable Interest Entities			25
13. Long-Term Debt			26
14. Short-Term Borrowings			26
15. Other Commitments and Contingencies			27
16. Accumulated Other Comprehensive Loss			29
17. Other, Net			29
18. Business Segment Information			30

Table of Contents

PART I

ITEM 1. FINANCIAL STATEMENTS

NiSource Inc.

Condensed Statements of Consolidated Income (unaudited)


	Three Months Ended March 31,
(in millions, except per share amounts)	2023		2022
Operating Revenues
Customer revenues	$	1,896.1	$	1,840.3
Other revenues	69.9		33.0
Total Operating Revenues	1,966.0		1,873.3
Operating Expenses
Cost of energy	765.1		706.7
Operation and maintenance	391.2		394.3
Depreciation and amortization	206.9		192.7
Gain on sale of assets, net	—		(105.0)
Other taxes	71.8		84.3
Total Operating Expenses	1,435.0		1,273.0

Operating Income	531.0		600.3
Other Income (Deductions)
Interest expense, net	(108.9)		(83.7)
Other, net	1.5		10.9

Total Other Deductions, Net	(107.4)		(72.8)
Income before Income Taxes	423.6		527.5
Income Taxes	85.8		96.2


Net Income	337.8		431.3
Net income attributable to noncontrolling interest	4.8		4.5
Net Income Attributable to NiSource	333.0		426.8
Preferred dividends	(13.8)		(13.8)
Net Income Available to Common Shareholders	319.2		413.0
Earnings Per Share
Basic Earnings Per Share	$	0.77	$	1.02
Diluted Earnings Per Share	$	0.71	$	0.94
Basic Average Common Shares Outstanding	412.8		406.0
Diluted Average Common Shares	447.1		441.4

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Condensed Statements of Consolidated Comprehensive Income (unaudited)


	Three Months Ended March 31,
(in millions, net of taxes)	2023		2022
Net Income	$	337.8	$	431.3
Other comprehensive income:
Net unrealized gain (loss) on available-for-sale debt securities(1)	2.0		(5.7)
Reclassification adjustment for cash flow hedges(2)	0.1		47.0
Unrecognized pension and OPEB benefit(3)	0.3		0.1
Total other comprehensive income	2.4		41.4
Comprehensive Income	$	340.2	$	472.7

(1)Net unrealized gain (loss) on available-for-sale securities, net of $0.5 million tax expense and $1.5 million tax benefit in the first quarter of 2023 and 2022, respectively.

(2)Reclassification adjustment for cash flow hedges, net of $0.1 million tax benefit and $21.3 million tax expense in the first quarter of 2023 and 2022, respectively.

(3)Unrecognized pension and OPEB benefit, net of $0.1 million and zero tax expense in the first quarter of 2023 and 2022, respectively.

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Condensed Consolidated Balance Sheets (unaudited)


(in millions)	March 31, 2023		December 31, 2022
ASSETS
Property, Plant and Equipment
Plant	$	28,065.6	$	27,551.3
Accumulated depreciation and amortization	(7,838.0)		(7,708.7)


Net Property, Plant and Equipment(1)	20,227.6		19,842.6
Investments and Other Assets
Unconsolidated affiliates	2.2		1.6
Available-for-sale debt securities (amortized cost of $162.8 and $166.7, allowance for credit losses of $0.8 and $0.9, respectively)	150.4		151.6
Other investments	74.3		71.0
Total Investments and Other Assets	226.9		224.2
Current Assets
Cash and cash equivalents	106.4		40.8
Restricted cash	41.9		34.6
Accounts receivable	954.2		1,065.8
Allowance for credit losses	(31.4)		(23.9)
Accounts receivable, net	922.8		1,041.9
Gas inventory	138.8		531.7
Materials and supplies, at average cost	172.6		151.4
Electric production fuel, at average cost	64.9		68.8
Exchange gas receivable	92.1		128.1

Regulatory assets	237.6		233.2

Deposits to renewable generation asset developer	281.2		143.8
Prepayments and other	278.2		210.0
Total Current Assets(1)	2,336.5		2,584.3
Other Assets
Regulatory assets	2,319.2		2,347.6
Goodwill	1,485.9		1,485.9

Deferred charges and other	257.6		252.0
Total Other Assets	4,062.7		4,085.5
Total Assets	$	26,853.7	$	26,736.6

(1)Includes $972.7 million and $978.5 million at March 31, 2023 and December 31, 2022, respectively, of net property, plant and equipment assets and $33.8 million and $25.7 million at March 31, 2023 and December 31, 2022, respectively, of current assets of consolidated VIEs that may be used only to settle obligations of the consolidated VIEs. Refer to Note 12, "Variable Interest Entities," for additional information.

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Condensed Consolidated Balance Sheets (unaudited) (continued)


(in millions, except share amounts)	March 31, 2023		December 31, 2022
CAPITALIZATION AND LIABILITIES
Capitalization
Stockholders’ Equity
Common stock - $0.01 par value, 600,000,000 shares authorized; 412,982,639 and 412,142,602 shares outstanding, respectively	$	4.2	$	4.2
Preferred stock - $0.01 par value, 20,000,000 shares authorized; 1,302,500 and 1,302,500 shares outstanding, respectively	1,546.5		1,546.5
Treasury stock	(99.9)		(99.9)
Additional paid-in capital	7,372.9		7,375.3
Retained deficit	(1,114.8)		(1,213.6)
Accumulated other comprehensive loss	(34.7)		(37.1)
Total NiSource Stockholders’ Equity	7,674.2		7,575.4
Noncontrolling interest in consolidated subsidiaries	329.5		326.4
Total Equity	8,003.7		7,901.8
Long-term debt, excluding amounts due within one year	10,264.7		9,523.6
Total Capitalization	18,268.4		17,425.4
Current Liabilities
Current portion of long-term debt	30.3		30.0
Short-term borrowings	1,281.6		1,761.9
Accounts payable	642.2		899.5
Dividends payable - common stock	103.4		—
Dividends payable - preferred stock	19.4		—
Customer deposits and credits	225.5		324.7
Taxes accrued	268.7		246.2
Interest accrued	139.2		138.4

Exchange gas payable	19.6		147.6
Regulatory liabilities	359.1		236.8


Asset retirement obligations	48.1		35.5
Accrued compensation and employee benefits	124.5		167.5

Obligations to renewable generation asset developer	347.2		347.2
Other accruals	298.1		325.2
Total Current Liabilities(1)	3,906.9		4,660.5
Other Liabilities

Deferred income taxes	1,950.1		1,854.5


Accrued liability for postretirement and postemployment benefits	239.6		245.5
Regulatory liabilities	1,725.5		1,775.8
Asset retirement obligations	464.7		478.1
Other noncurrent liabilities and deferred credits	298.5		296.8
Total Other Liabilities(1)	4,678.4		4,650.7
Commitments and Contingencies (Refer to Note 15, "Other Commitments and Contingencies")
Total Capitalization and Liabilities	$	26,853.7	$	26,736.6

(1)Includes $135.4 million and $128.2 million at March 31, 2023 and December 31, 2022, respectively, of current liabilities and $30.7 million and $30.6 million at March 31, 2023 and December 31, 2022, respectively, of other liabilities of consolidated VIEs that creditors do not have recourse to our general credit. Refer to Note 12, "Variable Interest Entities," for additional information.

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Condensed Statements of Consolidated Cash Flows (unaudited)


Three Months Ended March 31, (in millions)	2023		2022
Operating Activities
Net Income	$	337.8	$	431.3
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:

Depreciation and amortization	206.9		192.7
Deferred income taxes and investment tax credits	75.5		87.2



Gain on sale of assets	—		(105.0)
Other adjustments	1.1		8.0
Changes in Assets and Liabilities:










Components of working capital	71.1		(42.4)
Regulatory assets/liabilities	11.0		24.9


Deferred charges and other noncurrent assets	(12.0)		(7.4)
Other noncurrent liabilities and deferred credits	(8.0)		(9.5)

Net Cash Flows from Operating Activities	683.4		579.8
Investing Activities
Capital expenditures	(557.1)		(450.1)
Insurance recoveries	—		105.0




Payment to renewable generation asset developer	(137.3)		—
Other investing activities	(33.4)		(25.3)

Net Cash Flows used for Investing Activities	(727.8)		(370.4)
Financing Activities
Proceeds from Issuance of long-term debt	744.2		—
Repayments of finance lease obligations	(8.1)		(7.3)


Change in short-term borrowings, net (maturity ≤ 90 days)	(480.4)		(40.0)
Issuance of common stock, net of issuance costs	3.0		2.8

Equity costs, grant withholdings and debt related costs	(11.8)		(8.9)
Contributions from noncontrolling interest	3.6		—
Distributions to noncontrolling interest	(5.3)		(0.6)

Dividends paid - common stock	(103.2)		(95.3)
Dividends paid - preferred stock	(8.1)		(8.1)
Contract liability payment	(16.6)		(16.5)

Net Cash Flows from (used for) Financing Activities	117.3		(173.9)
Change in cash, cash equivalents and restricted cash	72.9		35.5
Cash, cash equivalents and restricted cash at beginning of period	75.4		94.9
Cash, Cash Equivalents and Restricted Cash at End of Period	$	148.3	$	130.4

Reconciliation to Balance Sheet


Three Months Ended March 31, (in millions)			2023
Cash and cash equivalents			106.4
Restricted Cash			41.9
Total Cash, Cash Equivalents and Restricted Cash			148.3

Supplemental Disclosures of Cash Flow Information


Three Months Ended March 31, (in millions)	2023		2022
Non-cash transactions:
Capital expenditures included in current liabilities	$	261.1	$	183.4
Dividends declared but not paid	122.8		114.7

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Condensed Statements of Consolidated Equity (unaudited)


(in millions)	Common Stock		Preferred Stock(1)		Treasury Stock		Additional Paid-In Capital		Retained Deficit		Accumulated Other Comprehensive Loss		Noncontrolling Interest in Consolidated Subsidiaries		Total
Balance as of January 1, 2023	$	4.2	$	1,546.5	$	(99.9)	$	7,375.3	$	(1,213.6)	$	(37.1)	$	326.4	$	7,901.8
Comprehensive Income:
Net income	—		—		—		—		333.0		—		4.8		337.8
Other comprehensive income, net of tax	—		—		—		—		—		2.4		—		2.4
Dividends:
Common stock ($0.50 per share)	—		—		—		—		(206.7)		—		—		(206.7)
Preferred stock (See Note 5)	—		—		—		—		(27.5)		—		—		(27.5)
Contributions from noncontrolling interest	—		—		—		—		—		—		3.6		3.6
Distributions to noncontrolling interests	—		—		—		—		—		—		(5.3)		(5.3)

Stock issuances:


Employee stock purchase plan	—		—		—		1.3		—		—		—		1.3
Long-term incentive plan	—		—		—		(6.3)		—		—		—		(6.3)
401(k) and profit sharing	—		—		—		2.6		—		—		—		2.6

Balance as of March 31, 2023	$	4.2	$	1,546.5	$	(99.9)	$	7,372.9	$	(1,114.8)	$	(34.7)	$	329.5	$	8,003.7
(1)Series A, Series B, and Series C shares have an aggregate liquidation preference of $400M, $500M, and $863M, respectively. See Note 5, "Equity," for additional information.


(in millions)	Common Stock		Preferred Stock(1)		Treasury Stock		Additional Paid-In Capital		Retained Deficit		Accumulated Other Comprehensive Loss		Noncontrolling Interest in Consolidated Subsidiaries		Total
Balance as of January 1, 2022	$	4.1	$	1,546.5	$	(99.9)	$	7,204.3	$	(1,580.9)	$	(126.8)	$	325.6	$	7,272.9
Comprehensive Income:
Net income	—		—		—		—		426.8		—		4.5		431.3
Other comprehensive income, net of tax	—		—		—		—		—		41.4		—		41.4
Dividends:
Common stock ($0.47 per share)	—		—		—		—		(190.7)		—		—		(190.7)
Preferred stock (See Note 5)	—		—		—		—		(27.5)		—		—		(27.5)
Distributions to noncontrolling interest	—		—		—		—		—		—		(0.6)		(0.6)
Stock issuances:


Employee stock purchase plan	—		—		—		1.2		—		—		—		1.2
Long-term incentive plan	—		—		—		0.9		—		—		—		0.9
401(k) and profit sharing	—		—		—		2.5		—		—		—		2.5

Balance as of March 31, 2022	$	4.1	$	1,546.5	$	(99.9)	$	7,208.9	$	(1,372.3)	$	(85.4)	$	329.5	$	7,531.4
(1)Series A, Series B and Series C shares have an aggregate liquidation preference of $400M, $500M, and $863M, respectively. See Note 5, "Equity," for additional information.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Condensed Statements of Consolidated Equity (unaudited) (continued)


	Preferred	Common
Shares (in thousands)	Shares	Shares	Treasury	Outstanding
Balance as of January 1, 2023	1,303	416,106	(3,963)	412,143
Issued:


Employee stock purchase plan	—	48	—	48
Long-term incentive plan	—	695	—	695
401(k) and profit sharing	—	97	—	97

Balance as of March 31, 2023	1,303	416,946	(3,963)	412,983













	Preferred	Common
Shares (in thousands)	Shares	Shares	Treasury	Outstanding
Balance as of January 1, 2022	1,303	409,266	(3,963)	405,303
Issued:


Employee stock purchase plan	—	44	—	44
Long-term incentive plan	—	300	—	300
401(k) and profit sharing	—	87	—	87

Balance as of March 31, 2022	1,303	409,697	(3,963)	405,734

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

1. Basis of Accounting Presentation

Our accompanying Condensed Consolidated Financial Statements (unaudited) reflect all normal recurring adjustments that are necessary, in the opinion of management, to present fairly the results of operations in accordance with GAAP in the United States of America. The accompanying financial statements include the accounts of us, our majority-owned subsidiaries, and VIEs of which we are the primary beneficiary after the elimination of all intercompany accounts and transactions.

The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Income for interim periods may not be indicative of results for the calendar year due to weather variations and other factors.

The Condensed Consolidated Financial Statements (unaudited) have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made in this Quarterly Report on Form 10-Q are adequate to make the information herein not misleading.

2. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. These pronouncements provide temporary optional expedients and exceptions for applying GAAP principles to contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. These pronouncements were effective upon issuance on March 12, 2020 through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, to extend the temporary accounting rules under Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. During 2022, the company applied a practical expedient under Topic 848 which allowed for the continuation of cash flow hedge accounting for interest rate derivative contracts upon the transition from LIBOR to alternative reference rates. The application of this expedient had no impact on the Condensed Consolidated Financial Statements (unaudited).

3. Revenue Recognition

Revenue Disaggregation and Reconciliation. We disaggregate revenue from contracts with customers based upon reportable segment, as well as by customer class. The Gas Distribution Operations segment provides natural gas service and transportation for residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, and Indiana. The Electric Operations segment provides electric service in 20 counties in the northern part of Indiana.

The tables below reconcile revenue disaggregation by customer class to segment revenue, as well as to revenues reflected on the Condensed Statements of Consolidated Income (unaudited):


Three Months Ended March 31, 2023 (in millions)	Gas Distribution Operations(2)		Electric Operations		Corporate and Other		Total
Customer Revenues(1)
Residential	$	987.0	$	150.4	$	—	$	1,137.4
Commercial	360.6		150.9		—		511.5
Industrial	71.9		134.2		—		206.1
Off-system	17.2		—		—		17.2
Miscellaneous	18.4		5.5		—		23.9
Total Customer Revenues	$	1,455.1	$	441.0	$	—	$	1,896.1
Other Revenues	46.2		23.5		0.2		69.9
Total Operating Revenues	$	1,501.3	$	464.5	$	0.2	$	1,966.0

(1)Customer revenue amounts exclude intersegment revenues. See Note 18, "Business Segment Information," for discussion of intersegment revenues.

(2)Amounts included in Gas Distributions Operations Other revenues primarily relate to weather normalization adjustments driven by warmer weather in 2023 compared to 2022.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)


Three Months Ended March 31, 2022 (in millions)	Gas Distribution Operations		Electric Operations		Corporate and Other(2)		Total
Customer Revenues(1)
Residential	$	976.9	$	138.5	$	—	$	1,115.4
Commercial	356.5		134.5		—		491.0
Industrial	67.8		129.8		—		197.6
Off-system	18.7		—		—		18.7
Miscellaneous	14.0		3.6		—		17.6
Total Customer Revenues	$	1,433.9	$	406.4	$	—	$	1,840.3
Other Revenues	2.8		23.7		6.5		33.0
Total Operating Revenues	$	1,436.7	$	430.1	$	6.5	$	1,873.3

(1)Customer revenue amounts exclude intersegment revenues. See Note 18, "Business Segment Information," for discussion of intersegment revenues.

(2)Amounts associated with Corporate and Other revenues primarily relate to the Transition Services Agreement entered into in connection with the sale of the Massachusetts Business.

NISOURCE INC. [NI-PB] Filings
NISOURCE INC. [NI] Filings
10-Q	[2023-05-03]
10-K	[2023-02-22]
10-Q	[2022-11-07]
10-Q	[2022-08-03]
10-Q	[2022-05-04]
10-K	[2022-02-23]
10-Q	[2021-11-03]
10-Q	[2021-08-04]
10-Q	[2021-05-05]
10-K	[2021-02-17]
10-Q	[2020-11-02]
10-Q	[2020-08-05]
10-Q	[2020-05-06]
10-K	[2020-02-28]
10-Q	[2019-10-30]
10-Q	[2019-07-31]
10-Q	[2019-05-01]
10-K	[2019-02-20]
10-Q	[2018-11-01]
10-Q	[2018-08-01]
S-1	[2018-05-11]
10-Q	[2018-05-02]
10-K	[2018-02-20]
10-Q	[2017-11-01]
10-Q	[2017-08-02]
10-Q	[2017-05-03]
10-K	[2017-02-22]
10-Q	[2016-11-01]
10-Q	[2016-08-02]
10-Q	[2016-05-03]
10-K	[2016-02-18]
10-Q	[2015-11-03]
10-Q	[2015-08-03]
10-Q	[2015-04-30]
10-K	[2015-02-18]
10-Q	[2014-10-30]
10-Q	[2014-07-31]
10-Q	[2014-04-30]
10-K	[2014-02-18]
10-Q	[2013-10-31]
10-Q	[2013-07-31]
10-Q	[2013-04-30]
10-K	[2013-02-19]
10-Q	[2012-11-02]
10-Q	[2012-07-31]
10-Q	[2012-05-01]
10-K	[2012-02-24]

NISOURCE INC. [NI-PB] Filings

NISOURCE INC. [NI] Filings