Thank you for holding. My name is Jeannie and I will be your conference operator today. I would like to welcome everyone to the Q3 2024 NiSource Earnings Conference Call. All lines have been muted to avoid background noise. After the speaker's remarks, there will be a question-and-answer session. I would now like to turn the conference over to Chris Turnure, Head of Investor Relations. You may begin.

Thank you. Good morning and welcome to the NiSource third quarter 2024 investor call. Joining me today are President and Chief Executive Officer Lloyd Yates, Executive Vice President and Chief Financial Officer Shawn Anderson, Executive Vice President of Strategy and Risk and Chief Commercial Officer Michael Luhrs, and Executive Vice President and Group President NiSource Utilities, Melody Birmingham. The purpose of this presentation is to review NiSource's financial performance for the third quarter of 2024, as well as provide an update on our operations and growth drivers. Following our prepared remarks, we'll open the call to your questions. Slides for today's call are available in the Investor Relations section of our website. We would like to remind you that some of the statements made during this presentation could be forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements. Information concerning such risks and uncertainties is included in the Risk Factors and MD&A sections of our periodic SEC filings. Additionally, some of the statements made on this call relate to non-GAAP measures. Please refer to the supplemental slides, segment information, and full financial schedules for information on the most directly comparable GAAP measure and a reconciliation of these measures. I now like to turn the call over to Lloyd.

Thank you, Chris and good morning, everyone. I'll begin on slide three. The NiSource investment thesis is simple. We serve our customers by delivering safe and reliable energy at an affordable value. Affordable energy requires efficient capital deployment, safe asset operations, and constructive regulatory recovery mechanisms. These fundamentals generate competitive returns while enhancing our balance sheet position. Importantly, these are the foundation to the NiSource business plan which continues to offer compelling value to stakeholders. Driven by regulated utility operations across six highly constructive jurisdictions, offering diversification across fuel type and regulatory location, strong execution from our team, and these business fundamentals are what have driven a trailing twelve-month 9.9% earned ROE at the NiSource level, demonstrating our focus on shareholder returns despite rapidly growing deployed capital and declining financial leverage. This is a GAAP number with an adjustment made only to normalized weather. All of this informs our long-term value proposition which our teams continue to advance each quarter. But before we focus on the long-term plan refresh, let's turn to Slide four and touch on the progress our teams have made on our regulatory activity. Being a trusted energy partner and enhancing NiSource's superior regulatory and stakeholder foundation is a priority and we believe differentiates us from peer regulated utilities. We remain active in rate case and tracker filings and build our credibility through our six-state footprint by utilizing a stakeholder-focused mindset as we approach these processes. Last month an administrative law judge in Pennsylvania recommended the Commission approve our general rate case multiparty settlement as filed. In October we reached a settlement in our Kentucky General rate case. Approval of both these settlements is subject to final Commission approval. In Indiana, we received approvals for both our Solar CPCN amendments to add full ownership of solar facilities as well as a CPCN to construct a gas peaking facility, all of which helped NiSource retire its remaining coal generating stations by the end of 2028. We also received approval to advance our strategy of using technology to more efficiently serve our customers through an upgraded work and asset management system which utilizes data and analytics through AI to raise productivity and efficiency across the dispatch of our operations team. This includes deferral for one-time and ongoing expenses and capital returns for the program which went live in July for our electric operations and will go live next summer for our gas operations. This new technology is also an example of making strategic investments to better inform our culture and enhance risk management across our systems to deliver operational excellence for our customers. Our relentless focus on operational excellence enhances our risk management posture and drives protection for our customers, communities, and shareholders, through our capital allocation framework. We face many potential categories of risk which constantly evolve and risk management is central to our values. The utility industry continues to face potential challenges head-on, whether it relates to natural disasters, the interest rate environment, inflationary pressures on cost structures, or other items of uncertainty. Our teams are constantly implementing proactive solutions to add layers of protection into our plans and lead industry partners to understand and utilize best practices to de-risk our execution and deliver our commitments. We have high confidence in our ability to achieve our financial commitments which we believe are highly executable. We are reaffirming 2024 adjusted EPS guidance of $1.70 to $1.74 and we continue to expect to achieve the upper half of this range. We are initiating 2025 adjusted EPS guidance of $1.84 to $1.88 consistent with maintaining our existing 6% to 8% annual growth commitment. Today we are also announcing a refresh of our outlook across our five-year planning horizon and extend this commitment and our overall financial guidelines to 2029. Key elements of that plan include an updated five-year capital plan which is $19.3 billion or equivalent to 89% of our total current rate base. This is slightly larger than our prior plan's 87% of year-end 2023 rate base. This drives 8% to 10% rate base growth over the 2025 to 2029 period, which fuels our ability to increase our adjusted earnings per share growth rate by 6% to 8% annually. Our investments in strengthening the balance sheet support our commitment to target FFO to debt of 14% to 16% in all years of the plan. Our work does not stop at the base capital plan. We are fortunate to have a robust portfolio of valuable customer investments include and extend far beyond our five-year plan horizon, which Shawn will detail later. Our teams remain active in developing this portfolio of projects to meet our standards necessary to be included in our base plan.

Thank you, Lloyd. Good morning. We continue our disciplined and methodical approach to developing and effectuating a robust pipeline of investments to benefit stakeholders. I'll begin on Slide six with an update on our generation investments. As Lloyd mentioned, there has been substantial progress made related to generation investments that will benefit all stakeholders. With Gibson and Fairbanks having received regulatory approval for full ownership in August, we have now converted four projects to full ownership, which will materially lower costs to customers. In addition, we have progressed well in bringing our renewable assets into service. The 200-megawatt Cavalry Solar project with 45 megawatts of storage was placed in service in May, and we expect the 435-megawatt Dunns Bridge II solar project with 56 megawatts of storage to come online very early next year. Fairbanks and Gibson are expected to be in service later in 2025 with no changes to timelines since our last update. 100% of modules for Fairbanks are already on site and Gibson is expected to have all modules delivered by early Q1 2025. In continuing the work of maximizing the benefits of our assets for customers, NIPSCO filed a notification earlier this week with the IURC that an application will be filed requesting to convert the 200-megawatt Templeton Wind Energy Center in Benton County, Indiana, which was approved by the IURC of the PPA to a build transfer agreement in which NIPSCO will own the asset upon completion. If approved, it will reduce customer costs versus the PPA structure at a valuable wind property to our generation portfolio and increase shareholder investment. It is a great example of the NiSource team at work creating a win for all stakeholders. The projects on Slide six are the result of the 2018 and 2021 NIPSCO Integrated Resource Plan and corresponding RFP processes. These projects represent billions of dollars of economically driven investment in the state of Indiana, the majority of which are already delivering zero commodity cost solar and wind, driving down fuel-related charges to customers.

Thank you, Michael. Let's start on Slide nine. Third quarter adjusted EPS was $0.20 per share, an increase of $0.01 versus the same period one year ago. Higher rate base investments drove $61 million in incremental revenue and net financing benefits of approximately $26 million were also realized on a year-over-year basis. Customer count and usage also added $2.6 million across our electric and gas businesses versus last year and have grown over $28 million total for the year. Moving to Slide 10. Let's break down our CapEx plan through 2029. As Lloyd mentioned earlier, we've refreshed our 5-year plan outlook, which starts with a base capital plan of $19.3 billion. The enhanced base plan is $2.9 billion larger than our prior base plan, which is driven by a number of factors, including increased generation investments, gas compliance and system hardening projects, and investments to modernize our information technology systems. As Michael shared, the base plan now reflects the inclusion of the Templeton project, which shifted from our upside plan into our base plan after our teams reached commercial agreement on the ownership of the project. We have enhanced our disclosure on the new base plan to detail the investment themes we are seeing as necessary to deliver safe and reliable service to our customers. All of these investments have met our threshold to be included in the base plan, mainly based on socialization with stakeholders, compliance and safety requirements, and commercial structures at an affordable value.

Hey, good morning. Good to see everything playing out from the Analyst Day here. So, congrats on that. So, in your prepared remarks, you kind of talked about you're having discussions continuing with data centres. And I understand that the recent increase in CapEx was largely just on the gas side, it seems. So just can you kind of talk about what the catalysts that we should be watching for, for you to kind of layer in those opportunities. Is it getting through a NIPSCO rate case? Is it finishing those discussions on what the tariff looks like? And what would the timing of that be?

So I'll start, and I'll let Michael Luhrs provide more detail. NiSource sees the data center opportunity as just a really good incremental investment opportunity. But I think for the company and where we are now, it's primarily a 2025 activity. I think as we progress in discussions with some of the counterparties, who want to kind of get down to the detail and make sure that we do this in a disciplined and methodical way, and that's just going to take time. And if you think about what we just accomplished with the Templeton Wind project. I mean, our ability to do things in a disciplined, methodical way has been probably one of the keys to why we've been executing so well.

No, you hit it, Lloyd. We were going to work through these opportunities in a manner, as you said, disciplined and methodically, make sure we're providing the benefits to existing customers, that it's accretive for shareholders. And then as we come through those opportunities at which point they are accretive or we know that they're beneficial, we will bring them forward just as we do with the Templeton Wind project today.

Yes. Just to be clear, the $19.3 billion capital plan is fully financed through all the systems that we've shared with you today. The $1.8 billion of potential upside CapEx may require modest amounts of equity based on the cash flow profiles of those projects, when they get sequenced and how it would work through the regulatory mechanisms themselves. The incremental investment opportunities are not captured in any of those systems that I just highlighted. That's where data center investments would theoretically live. Therefore, we would have to reevaluate everything to incorporate incremental investment opportunities through our systems. But we don't need a full planned refresh to do that, we'll flow those through our systems, and you'll know those when we know those through this mechanism.

Hey, good morning, team. Very well done, truly impressive. Those are not your average LDCs, I got to say. In fact, to that end, just understand the staggering of different data points here. I mean just impressive CapEx update here, the $1.8 billion upside here. I mean, you're going to get a number of these data points over the next year, that's not something we should be looking to with 4Q. That's going to be a year out. The AI data center-related data points here, given the December IRP, that's a 4Q update presumably, correct?

Yes. Let me just step through it real quick. So, the $1.8 billion of upside CapEx, you can actually see it in the capital allocation side that we shared. But to your point, we don't see much upside CapEx in 2025, but we do see some start to emerge in 2026, 2027. And you can kind of see it layered in. We'll continue to move those around on those bars based on the profile and the development of those projects. As we know more, we'll update that CapEx allocation on where those upside opportunities might land. And then in terms of updates, the IRP, it seems we're clearly working through the preferred portfolio and what it takes to action those. Likewise, with data centres well underway and under development. I imagine both are pretty significant strategies for the company. Therefore, I imagine we'll discuss those on the 4Q call, but I don't know yet what the outlook will be and how those will be incorporated. Again, we'll need to do the commercial development and understand the value creation for all stakeholders. Once we understand that and roll that through the systems, we'll post it here on the call.

Hey, good morning and thank you for the time today. Maybe I'll just pick up on what Julien was asking on just now again, the 2.6 gigawatts in the load scenarios and the IRP, I think that's really clear. But as you've showed with Templeton, you've also done a lot of work on generation that's outside of this kind of data center load opportunity that we're all focused on. I'm curious what type of generation you might need in the IRP regardless of said data center load shows up or not? And maybe just the sort of generation needs overall, given you've done a lot of this work to convert PPA projects into company-owned projects? Kind of how do you think about that bucket broadly going forward?

Yes. I'd be happy to talk about that more. So, when you look at what we've done, just hitting on one of the points you made. We have done a lot of work associated with the generation assets, which are very beneficial relative to customers and all stakeholders and shareholders associated with it. We will continue to do work like that to make sure we're maximizing the opportunities and the benefits to all parties. And so, we're excited about the opportunity associated with Templeton should it be approved by the commission. When you look at the IRP and the elements going forward, in pretty much all cases especially given the DLOL rules for MISO, you need storage and you need between 500 megawatts and a gigawatt of storage associated with it. And that's to help address those different accreditation methodology for MISO and the impacts of them. At the same time, to statable resources, we've all known that statable resources will be necessary, batteries help with that. But at the same time, you also are going to need additional spinning assets such as gas turbines or peakers. You see that when you look at those scenarios, regardless of data centres, you need more dispatchable resources, that will show up in most likely the form of cash generation.

Hello everyone. Thank you. Good figure, another data center question, and perhaps this is just a clarification and the clarification of all the clarifications you've given. But do you technically need to build anything, put infrastructure in the ground to allow power to flow to that Microsoft center initially and then maybe one or two others? That's more of a technical question, right? Do you actually need to build anything in the short term to get these first couple of data centres online?

Yes, we would need to build to facilitate the kind of load demand we're talking about, whether it's Microsoft or any other counterparty.

Hey, good morning, everyone. Just following up on the last question around gas. Can you just maybe give a little more color on the step change within Columbia CapEx? Are you accelerating work here? Is it costing more? Are there any discrete projects at various jurisdictions you point to? And then sort of as a second part to that, can you just talk about to what extent any changes in the gas forward curve, which has come down since the last five-year plan may or may not have played into the CapEx increase as well as the ability to keep customer bills 5% or lower?

Yes. You bet, Gabe. I appreciate the question. So the gas system hardening work that we're seeing. I don't know if I'd necessarily call it a step change so much as a glide into what the requirements will be for the completion of the Bersteel replacement programs. Some new first-generation plastic replacement programs are starting to pop up as well. We do have some gas AMI investment, which we've been focused on, and we would like to continue. We think that drives great efficiency and better service for our customers. So, there is some of that included as well. But IOI in-line inspection work continues as well as some transmission compliance. We expect that some PHMSA of rulemaking as well in the new year could give better indications on timelines associated with the compliance requirements for linked detection rules. So, there's a whole host of things for us to do to help harden the gas system, and that's what you're seeing in the capital allocation itself.

Good morning. Are there any steps that have been taken for NiSource or NIPSCO to enter a Q for critical gas generation infrastructure that could help accelerate the time to market for your customers?

I won't go into specific details about our activities as we are currently engaged in commercial discussions. However, I can say that we have been planning appropriately regarding the necessary infrastructure. All these facilities require some infrastructure, such as substations, transmission, and generation. We are aware of this and have been preparing and positioning ourselves effectively.

One of the advantages of NIPSCO is our proximity to the gas supplies to the Utica and Marcellus shales. As you consider these opportunities, it is important to note that our strong electric transmission system near gas supply is a critical advantage for the company.

Hey team, good morning. Thanks for giving me time. Just first quick clarification is Templeton Wind. I just want to be clear on this. That's in the base plan. Is that correct?

Yes. We just moved the upside to the base plan.

Morning, Lloyd. Morning, Michael. Morning, Shawn, how are you? So, you mentioned sort of MISO capacity in the prepared remarks. So, I just wanted to dig into that a little bit. Clearly, they've adopted some of the constructs for the next auction that PJM also has. And so, we saw what happened in PJM with higher capacity prices we saw sort of what the feedback there has been. I guess a couple of questions related to that. Do you feel like the IRP and the rate case and sort of the vertically integrated model in Indiana allow you to get that conversation going with the regulator get in front of what we might see for an auction result next spring.

My response would be that one of the reasons the vertically integrated model has proven to be so advantageous is because we have specific requirements to meet the reserve margin, as well as addressing the accreditation reduction. Essentially, we are actively working to maintain a balance between supply and demand, which is reflected in our considerations for necessary resource additions. This is why we referenced the scenario with 2,600 megawatts of potential large loads like data centers and the associated upside. While we are always mindful of the impacts on our customers, I believe that our vertically integrated model significantly reduces a lot of that risk.

Thank you for your interest, and thanks for your questions today. Thank you for your interest in NiSource. And we look forward to seeing all of you at the EEI financial conference in a couple of weeks.

This concludes today's call. Thank you for joining. You may now disconnect.