- 2023 EPS guidance raised to upper half of range, long-term
growth commitments reaffirmed
- Leading regulatory execution continues in both electric and gas
businesses
- NIPSCO minority sale agreement with Blackstone Infrastructure
Partners announced, expected to close by year-end
MERRILLVILLE, Ind., Aug. 2, 2023
/PRNewswire/ -- NiSource Inc. (NYSE: NI) today announced, on a GAAP
basis, net income available to common shareholders for the three
months ended June 30, 2023, of
$39.9 million, or $0.09 diluted earnings per share, compared to net
income available to common shareholders of $53.2 million, or $0.12 diluted earnings per share, for the same
period of 2022. For the six months ended June 30, 2023, on a GAAP basis NiSource's
net income available to common shareholders was $359.1 million, or $0.80 diluted earnings per share, compared to net
income available to common shareholders of $466.2 million, or $1.06 diluted earnings per share, for the same
period of 2022.
NiSource also reported non-GAAP net operating earnings available
to common shareholders of $50.3
million, or $0.11 diluted
earnings per share, for the three months ended June 30, 2023,
compared to non-GAAP net operating earnings available to common
shareholders of $53.9 million, or
$0.12 diluted earnings per share, for
the same period of 2022. For the six months ended June 30,
2023, NiSource's non-GAAP net operating earnings available to
common shareholders was $393.3
million, or $0.88 diluted
earnings per share, compared to non-GAAP net operating earnings
available to common shareholders of $382.6
million, or $0.87 diluted
earnings per share, for the same period of 2022. Schedule 1 of this
press release contains a complete reconciliation of GAAP measures
to non-GAAP measures.
2023 EPS guidance raised to upper half of range
NiSource is raising 2023 non-GAAP NOEPS guidance to the upper
half of $1.54 to $1.60. Annual non-GAAP NOEPS growth of 6-8%
through 2027 is reaffirmed. Annual rate base growth of 8-10% is
driven by $15 billion of capital
expenditures anticipated during the 2023-27 period.
"The increased 2023 earnings expectations underscore our focus
and ability to deliver on our financial commitments while
supporting the growth and reliability of our energy systems." said
NiSource President and CEO, Lloyd
Yates. "Our recently announced partnership with Blackstone
Infrastructure Partners marks yet another example of NiSource's
steadfast execution. This transaction enables us to support ongoing
investments in the state of Indiana and strengthens our balance sheet and
financial flexibility. These achievements would not be possible
without our dedicated employees and their commitment to our
customers, communities and all NiSource stakeholders."
Second quarter 2023 and recent business highlights
Electric business
The record is closed and proposed settlement is on file for the
Northern Indiana Public Service Company's (NIPSCO) electric
rate case. A final order is anticipated this month from the Indiana
Utility Regulatory Commission (IURC) with rates anticipated to be
effective in steps beginning in September
2023 and March 2024.
Construction on the Crossroads and Dunns Bridge I solar projects
was recently completed. NiSource has now placed four
utility-owned renewable investments into service from the 2018
Integrated Resource Plan process including the 2020 Rosewater and
2021 Indiana Crossroads Wind projects. This represents an
approximately $800 million investment
in 870 megawatts of economic, sustainable, zero fuel cost new
generation for NIPSCO's northern Indiana customers. The Dunns Bridge II,
Cavalry and Fairbanks Solar projects are under construction and
results from the 2022 RFPs process continue to be evaluated.
Gas distribution business
In May, Columbia Gas of Maryland filed a request with the Maryland
Public Service Commission (PSC) seeking approval to adjust base
rates for distribution. The request seeks to recover approximately
$40 million in capital invested in
improving system safety and reliability through the 12-months ended
July 2023.
Also in May, the Virginia State Corporation Commission (SCC)
approved a settlement among Columbia Gas of Virginia and the parties in its base rate case
originally filed in April 2022. The
base rate adjustment approval authorizes recovery of approximately
$390 million of capital invested
during the 2021 through 2023 period.
Columbia Gas of Ohio's
Infrastructure Replacement Program (IRP) rider rates went into
effect in May, initiating the recovery of $316 million of capital investment targeting
safety and reliability enhancements made during 2022.
These developments advance a growing track record of leading
regulatory execution and highlight the benefits of jurisdictional
diversity. In the last four quarters alone, NiSource has completed
general rate cases in Indiana,
Ohio, Pennsylvania, Virginia and Maryland with balanced outcomes for
stakeholders. NiSource's scale has minimized bill impacts
during a period of elevated commodity prices and general inflation,
while enabling billions of dollars of investments on behalf of our
customers and communities.
Columbia Gas of Ohio has been
awarded the Most Trusted Utility Brand Award for 2023 by Escalent
for the second consecutive year. The award was given to only 42
brands across the country, and our Ohio business had the second highest score for
a natural gas utility in the Midwest region.
NiSource reminds investors that it does not provide a GAAP
equivalent of its earnings guidance due to the impact of
unpredictable factors such as fluctuations in weather and other
unusual and infrequent items included in GAAP results.
Additional information for the quarter ended June 30,
2023, is available on the Investors section of www.nisource.com,
including segment and financial information and a
presentation.
About NiSource
NiSource Inc. (NYSE: NI) is one of the largest fully-regulated
utility companies in the United
States, serving approximately 3.3 million natural gas
customers and 500,000 electric customers across six states through
its local Columbia Gas and NIPSCO brands. The mission of our
approximately 7,200 employees is to deliver safe, reliable energy
that drives value to our customers. NiSource is a member of the Dow
Jones Sustainability - North America Index and is on Forbes lists
of America's Best Employers for Women and Diversity. Learn more
about NiSource's record of leadership in sustainability,
investments in the communities it serves and how we live our vision
to be an innovative and trusted energy partner at www.NiSource.com.
NI-F
The content of our website is not incorporated by reference into
this document or any other report or document NiSource files with
the Securities and Exchange Commission ("SEC").
Forward-Looking Statements
This press release 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").
Forward-looking statements in this press release include, but are
not limited to, statements regarding the purchase and sale
agreement that NiSource's wholly-owned subsidiary, NIPSCO Holdings
II LLC, entered into with BIP BLUE BUYER L.L.C., an affiliate of
Blackstone Infrastructure Partners (the "Investor") on June 17, 2023 whereby Investor will acquire newly
issued membership interests of NIPSCO Holdings II LLC which will
represent a 19.9% ownership in NIPSCO Holdings II LLC at closing
(the "NIPSCO Minority Equity Interest Sale"); statements concerning
the ability to complete the NIPSCO Minority Equity Interest Sale on
the anticipated timeline or at all; statements concerning the
anticipated benefits of the NIPSCO Minority Equity Interest Sale if
completed; statements concerning the projected impact of the NIPSCO
Minority Equity Interest Sales on our performance or opportunities;
any statements regarding our expectations, beliefs, plans,
objectives or prospects or future performance or financial
condition as a result of or in connection with the NIPSCO Minority
Equity Interest Sale; 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.
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.
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 release include, but are not limited to, risks
and uncertainties relating to the timing and certainty of closing
the NIPSCO Minority Equity Interest Sale; the ability to satisfy
the conditions to closing the NIPSCO Minority Equity Interest Sale,
including the ability to obtain Federal Energy Regulatory
Commission approval necessary to complete the NIPSCO Minority
Equity Interest Sale; the ability to achieve the anticipated
benefits of the NIPSCO Minority Equity Interest Sale; the effect of
this communication on NiSource's stock price; the effects of
transaction costs; the effects of the NIPSCO Minority Equity
Interest Sale on industry, market, economic, political or
regulatory conditions outside of NiSource's control; any disruption
to NiSource's business from the NIPSCO Minority Equity Interest
Sale, including the diversion of management time on NIPSCO Minority
Equity Interest Sale-related issues; 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; 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; and other
matters set forth in Item 1, "Business," Item 1A, "Risk Factors"
and Part II, Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2022, and matters set forth in our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, some 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.
Regulation G Disclosure Statement
This press release includes financial results and guidance for
NiSource with respect to net operating earnings available to common
shareholders and diluted earnings per share, which are non-GAAP
financial measures as defined by the SEC's Regulation G. The
company includes these measures because management believes they
permit investors to view the company's performance using the same
tools that management uses and to better evaluate the company's
ongoing business performance. With respect to such guidance, it
should be noted that there will likely be a difference between
these measures and their GAAP equivalents due to various factors,
including, but not limited to, fluctuations in weather, the impact
of asset sales and impairments, and other unusual or infrequent
items included in GAAP results. The company is not able to estimate
the impact of such factors on GAAP earnings and, as such, is not
providing earnings guidance on a GAAP basis. In addition, the
company is not able to provide a reconciliation of its non-GAAP net
operating earnings guidance to its GAAP equivalent without
unreasonable efforts.
Schedule 1 -
Reconciliation of Consolidated Net Income Available to Common
Shareholders to
Net Operating Earnings Available to Common Shareholders (Non-GAAP)
(unaudited)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
(in millions, except
per share amounts)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP Net Income
Available to Common Shareholders
|
$
39.9
|
|
$
53.2
|
|
$
359.1
|
|
$
466.2
|
Adjustments to
Operating Income:
|
|
|
|
|
|
|
|
Operating
Revenues:
|
|
|
|
|
|
|
|
Weather - compared to
normal
|
5.9
|
|
(8.3)
|
|
38.2
|
|
(11.3)
|
FAC
adjustment(1)
|
—
|
|
8.0
|
|
—
|
|
8.0
|
Operating
Expenses:
|
|
|
|
|
|
|
|
NiSource Next
initiative(2)
|
—
|
|
1.2
|
|
—
|
|
2.7
|
Massachusetts Business
related amounts(3)
|
—
|
|
—
|
|
—
|
|
$
(105.0)
|
Total adjustments to
operating income
|
5.9
|
|
0.9
|
|
38.2
|
|
(105.6)
|
Income
Taxes:
|
|
|
|
|
|
|
|
Tax effect of above
items(4)
|
(1.7)
|
|
(0.2)
|
|
(10.2)
|
|
22.0
|
Preferred
Dividends:
|
|
|
|
|
|
|
|
Preferred dividends
redemption premium(5)
|
6.2
|
|
|
|
6.2
|
|
|
Total adjustments to
net income
|
10.4
|
|
0.7
|
|
34.2
|
|
(83.6)
|
Net Operating
Earnings Available to Common Shareholders (Non-
GAAP)
|
$
50.3
|
|
$
53.9
|
|
$
393.3
|
|
$
382.6
|
Diluted Average
Common Shares
|
446.8
|
|
440.2
|
|
446.9
|
|
440.8
|
GAAP Diluted
Earnings Per Share
|
$
0.09
|
|
$
0.12
|
|
$
0.80
|
|
$
1.06
|
Adjustments to diluted
earnings per share
|
0.02
|
|
—
|
|
0.08
|
|
(0.19)
|
Non-GAAP Diluted Net
Operating Earnings Per Share(6)
|
$
0.11
|
|
$
0.12
|
|
$
0.88
|
|
$
0.87
|
|
(1)Represents fuel costs deemed
over-collected from customers through the FAC mechanism and ordered
to be refunded to customers.
|
(2)Represents incremental severance and
third-party consulting costs incurred in connection with the
NiSource Next initiative.
|
(3)2022
represents proceeds from a property insurance settlement related to
the Greater Lawrence Incident.
|
(4)Represents income tax expense
calculated using the statutory tax rates by legal
entity.
|
(5)Represents the premium from our Series
A Preferred Stock redemption calculated as the difference between
the carrying value of the Series A Preferred Stock and the total
amount of consideration paid to redeem.
|
(6)The
Non-GAAP diluted NOEPS numerator is equal to net operating earnings
available to common shareholders adjusted for income allocated to
participating securities and add-backs for interest expense
incurred, net of tax, related to Series A Equity Unit purchase
contracts. The add-backs for the three months ended June 30,
2023 and 2022 were $0.4M and $0.5M, respectively. The
adjustment for the income allocated to participating securities for
the six months ended June 30, 2023 and 2022 were $(0.2)M and
zero, respectively.
|
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SOURCE NiSource Inc.