NiSource 10-Q 2023-09-30

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 September 30, 2023

or

☐ 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: 413,415,441 shares outstanding at October 24, 2023.

NISOURCE INC.

FORM 10-Q QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 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)			13
						Notes to Condensed Consolidated Financial Statements (unaudited)			16
			Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			36
			Item 3.			Quantitative and Qualitative Disclosures About Market Risk			58
			Item 4.			Controls and Procedures			58
PART II			OTHER INFORMATION
			Item 1.			Legal Proceedings			59
			Item 1A.			Risk Factors			59
			Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			59
			Item 3.			Defaults Upon Senior Securities			59
			Item 4.			Mine Safety Disclosures			59
			Item 5.			Other Information			59
			Item 6.			Exhibits			60
			Signature						61

DEFINED TERMS
The following is a list of frequently used abbreviations or acronyms that are found in this report:
NiSource Subsidiaries and Affiliates (not exhaustive)
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
NIPSCO Holdings I			NIPSCO Holdings I LLC
NIPSCO Holdings II			NIPSCO Holdings II 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
Indiana Crossroads Solar			Indiana Crossroads Solar Generation LLC and its wholly owned subsidiary, Meadow Lake Solar Park LLC
Dunns Bridge I			Dunns Bridge I Solar Generation LLC and its wholly owned subsidiary, Dunns Bridge Solar Center, LLC
Dunns Bridge II			Dunns Bridge II Solar Generation LLC
Fairbanks			Fairbanks Solar Generation LLC
Cavalry			Cavalry Solar Generation LLC
Abbreviations and Other
AFUDC			Allowance for funds used during construction
AOCI			Accumulated Other Comprehensive Income (Loss)
ASC			Accounting Standards Codification
ASU			Accounting Standards Update
ATM			At-the-market
BIP			Blackstone Infrastructure Partners L.P
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
EGUs			Electric Utility Generating Units
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

DEFINED TERMS
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 of 2022
IRP			Infrastructure Replacement Program
IURC			Indiana Utility Regulatory Commission
JV			Joint Venture
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
ROU			Right of use
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
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"). Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to,

statements regarding the ability to complete the NIPSCO Minority Equity Interest Sale (as defined below) on the anticipated timeline or at all; statements regarding the anticipated benefits of the NIPSCO Minority Equity Interest Sale if completed; statements regarding 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 Quarterly Report on Form 10-Q 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; the ability to achieve the anticipated benefits of the NIPSCO Minority Equity Interest Sale; 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 (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 and our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023, 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)			13
Notes to Condensed Consolidated Financial Statements (unaudited)			16
1. Basis of Accounting Presentation			16
2. Recent Accounting Pronouncements			16
3. Revenue Recognition			16
4. Earnings Per Share			19
5. Equity			21
6. Regulatory Matters			23
7. Risk Management Activities			23
8. Fair Value			25
9. Income Taxes			28
10. Pension and Other Postretirement Benefits			28
11. Variable Interest Entities			29
12. Long-Term Debt			30
13. Short-Term Borrowings			30
14. Other Commitments and Contingencies			31
15. Accumulated Other Comprehensive Loss			34
16. Other, Net			35
17. Business Segment Information			35

Table of Contents

PART I

ITEM 1. FINANCIAL STATEMENTS

NiSource Inc.

Condensed Statements of Consolidated Income (unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions, except per share amounts)			2023						2022						2023						2022
Operating Revenues
Customer revenues			$	1,002.6					$	1,058.2					$	3,965.9					$	4,055.0
Other revenues			24.8						31.3						117.5						91.0
Total Operating Revenues			1,027.4						1,089.5						4,083.4						4,146.0
Operating Expenses
Cost of energy			181.3						330.8						1,198.3						1,421.2
Operation and maintenance			341.2						347.9						1,101.9						1,124.1
Depreciation and amortization			210.9						203.2						650.9						604.6
Gain on sale of assets, net			(0.2)						(0.3)						(0.5)						(105.3)
Other taxes			61.2						51.2						199.9						201.1
Total Operating Expenses			794.4						932.8						3,150.5						3,245.7
Operating Income			233.0						156.7						932.9						900.3
Other Income (Deductions)
Interest expense, net			(129.2)						(91.6)						(348.6)						(259.8)
Other, net			(1.6)						10.1						1.9						30.0
Total Other Deductions, Net			(130.8)						(81.5)						(346.7)						(229.8)
Income before Income Taxes			102.2						75.2						586.2						670.5
Income Taxes			3.8						11.7						103.7						119.9
Net Income			98.4						63.5						482.5						550.6
Net income (loss) attributable to noncontrolling interest			13.3						(2.3)						5.6						(9.0)
Net Income Attributable to NiSource			85.1						65.8						476.9						559.6
Preferred dividends			(8.1)						(13.8)						(34.6)						(41.4)
Preferred redemption premium			—						—						(6.2)						—
Net Income Available to Common Shareholders			77.0						52.0						436.1						518.2
Earnings Per Share
Basic Earnings Per Share (1)			$	0.19					$	0.13					1.05						$	1.28
Diluted Earnings Per Share			$	0.17					$	0.12					$	0.98					$	1.18
Basic Average Common Shares Outstanding			413.5						406.5						413.2						406.3
Diluted Average Common Shares			448.3						443.4						447.4						441.7

(1) Basic Earnings Per Share includes the incremental impact of participating securities under the Two-Class Method. See Note 4, "Earnings Per Share," 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 Comprehensive Income (unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions, net of taxes)			2023						2022						2023						2022
Net Income			$	98.4					$	63.5					$	482.5					$	550.6
Other comprehensive income:
Net unrealized loss on available-for-sale debt securities(1)			(1.7)						(4.5)						(0.9)						(14.1)
Reclassification adjustment for cash flow hedges(2)			(0.1)						16.2						(0.2)						119.2
Unrecognized pension and OPEB benefit (costs)(3)			0.7						0.6						1.3						(1.8)
Total other comprehensive income (loss)			(1.1)						12.3						0.2						103.3
Comprehensive Income			$	97.3					$	75.8					$	482.7					$	653.9

(1)Net unrealized loss on available-for-sale debt securities, net of $0.4 million tax benefit and $1.1 million tax benefit in the third quarter of 2023 and 2022, respectively, and $0.2 million of tax benefit and $3.7 million tax benefit for the nine months ended 2023 and 2022, respectively.

(2)Reclassification adjustment for cash flow hedges, net of $0.0 million tax expense and $5.3 million tax expense in the third quarter of 2023 and 2022, respectively , and $0.1 million of tax benefit and $39.4 million tax expense for the nine months ended 2023 and 2022, respectively.

(3)Unrecognized pension and OPEB benefit (costs), net of $0.3 million of tax expense and $0.2 million tax expense in the third quarter of 2023 and 2022, respectively, and $0.5 million of tax expense and $0.6 million tax benefit for the nine months ended 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)			September 30, 2023						December 31, 2022
ASSETS
Property, Plant and Equipment
Plant			$	29,816.1					$	27,551.3
Accumulated depreciation and amortization			(8,104.1)						(7,708.7)
Net Property, Plant and Equipment(1)			21,712.0						19,842.6
Investments and Other Assets
Unconsolidated affiliates			5.2						1.6
Available-for-sale debt securities (amortized cost of $178.2 and $166.7, allowance for credit losses of $0.9 and $0.9, respectively)			161.9						151.6
Other investments			76.4						71.0
Total Investments and Other Assets			243.5						224.2
Current Assets
Cash and cash equivalents			56.0						40.8
Restricted cash			50.6						34.6
Accounts receivable			585.1						1,065.8
Allowance for credit losses			(15.5)						(23.9)
Accounts receivable, net			569.6						1,041.9
Gas inventory			297.8						531.7
Materials and supplies, at average cost			183.7						151.4
Electric production fuel, at average cost			60.0						68.8
Exchange gas receivable			37.8						128.1
Regulatory assets			217.8						233.2
Deposits to renewable generation asset developer			179.5						143.8
Prepayments and other			162.6						210.0
Total Current Assets(1)			1,815.4						2,584.3
Other Assets
Regulatory assets			2,277.5						2,347.6
Goodwill			1,485.9						1,485.9
Deferred charges and other			293.9						252.0
Total Other Assets			4,057.3						4,085.5
Total Assets			$	27,828.2					$	26,736.6

(1)Includes $1,338.6 million and $978.5 million at September 30, 2023 and December 31, 2022, respectively, of net property, plant and equipment assets and $65.5 million and $25.7 million at September 30, 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 11, "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)			September 30, 2023						December 31, 2022
CAPITALIZATION AND LIABILITIES
Capitalization
Stockholders’ Equity
Common stock - $0.01 par value, 600,000,000 shares authorized; 413,324,607 and 412,142,602 shares outstanding, respectively			$	4.2					$	4.2
Preferred stock - $0.01 par value, 20,000,000 shares authorized; 902,500 and 1,302,500 shares outstanding, respectively			1,152.6						1,546.5
Treasury stock			(99.9)						(99.9)
Additional paid-in capital			7,393.0						7,375.3
Retained deficit			(1,200.6)						(1,213.6)
Accumulated other comprehensive loss			(36.9)						(37.1)
Total NiSource Stockholders’ Equity			7,212.4						7,575.4
Noncontrolling interest in consolidated subsidiaries			556.9						326.4
Total Equity			7,769.3						7,901.8
Long-term debt, excluding amounts due within one year			11,011.3						9,523.6
Total Capitalization			18,780.6						17,425.4
Current Liabilities
Current portion of long-term debt			26.8						30.0
Short-term borrowings			2,219.9						1,761.9
Accounts payable			648.2						899.5
Dividends payable - common stock			103.8						—
Dividends payable - preferred stock			8.1						—
Customer deposits and credits			286.6						324.7
Taxes accrued			176.1						246.2
Interest accrued			150.4						138.4
Exchange gas payable			44.1						147.6
Regulatory liabilities			320.2						236.8
Asset retirement obligations			57.1						35.5
Accrued compensation and employee benefits			183.3						167.5
Obligations to renewable generation asset developer			—						347.2
Other accruals			170.8						325.2
Total Current Liabilities(1)			4,395.4						4,660.5
Other Liabilities
Deferred income taxes			2,011.4						1,854.5
Accrued liability for postretirement and postemployment benefits			236.0						245.5
Regulatory liabilities			1,643.5						1,775.8
Asset retirement obligations			469.8						478.1
Other noncurrent liabilities and deferred credits			291.5						296.8
Total Other Liabilities(1)			4,652.2						4,650.7
Commitments and Contingencies (Refer to Note 14, "Other Commitments and Contingencies")
Total Capitalization and Liabilities			$	27,828.2					$	26,736.6

(1)Includes $41.0 million and $128.2 million at September 30, 2023 and December 31, 2022, respectively, of current liabilities and $55.0 million and $30.6 million at September 30, 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 11, "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)

Nine Months Ended September 30, (in millions)			2023						2022
Operating Activities
Net Income			$	482.5					$	550.6
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Depreciation and amortization			650.9						604.6
Deferred income taxes and investment tax credits			102.1						118.3
Gain on sale of assets			(0.5)						(105.3)
Other adjustments			12.0						27.7
Changes in Assets and Liabilities:
Components of working capital			323.6						(115.2)
Regulatory assets/liabilities			15.1						(17.4)
Deferred charges and other noncurrent assets			(11.8)						(16.8)
Other noncurrent liabilities and deferred credits			(38.0)						(10.3)
Net Cash Flows from Operating Activities			1,535.9						1,036.2
Investing Activities
Capital expenditures			(1,885.6)						(1,523.0)
Insurance recoveries			—						105.0
Cost of removal			(118.7)						(108.6)
Payment to renewable generation asset developer			(486.7)						(150.9)
Other investing activities			(12.3)						(5.2)
Net Cash Flows used for Investing Activities			(2,503.3)						(1,682.7)
Financing Activities
Proceeds from Issuance of long-term debt			1,488.7						345.6
Repayments of long-term debt and finance lease obligations			(24.1)						(52.5)
Change in short-term borrowings, net (maturity ≤ 90 days)			457.8						714.2
Issuance of common stock, net of issuance costs			9.6						9.1
Redemption of preferred stock			(393.9)						—
Preferred stock redemption premium			(6.2)						—
Equity costs, grant withholdings, and debt related costs			(19.3)						(10.1)
Contributions from noncontrolling interest			240.9						—
Distributions to noncontrolling interest			(12.0)						(4.8)
Dividends paid - common stock			(310.1)						(286.0)
Dividends paid - preferred stock			(35.7)						(35.7)
Contract liability payment			(49.9)						(49.6)
Payment of financing obligation to renewable generation asset developer			(347.2)						—
Net Cash Flows from Financing Activities			998.6						630.2
Change in cash, cash equivalents and restricted cash			31.2						(16.3)
Cash, cash equivalents and restricted cash at beginning of period			75.4						94.9
Cash, Cash Equivalents and Restricted Cash at End of Period			$	106.6					$	78.6

Reconciliation to Balance Sheet

Nine Months Ended September 30, (in millions)			2023
Cash and cash equivalents			56.0
Restricted Cash			50.6
Total Cash, Cash Equivalents and Restricted Cash			106.6

Table of Contents

ITEM 1. FINANCIAL STATEMENTS (continued)

Supplemental Disclosures of Cash Flow Information

Nine Months Ended September 30, (in millions)			2023						2022
Non-cash transactions:
Capital expenditures included in current liabilities			$	389.0					$	280.4
Dividends declared but not paid			111.9						115.0
Purchase contract liability(1)			16.4						81.1

(1) Refer to Note 5, "Equity," for additional information

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

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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 July 1, 2023			$	4.2					$	1,152.6					$	(99.9)					$	7,383.1					$	(1,173.8)					$	(35.8)					$	341.0					$	7,571.4
Comprehensive Income:
Net income			—						—						—						—						85.1						—						13.3						98.4
Other comprehensive loss, net of tax			—						—						—						—						—						(1.1)						—						(1.1)
Dividends:
Common stock ($0.25 per share)			—						—						—						—						(103.8)						—						—						(103.8)
Preferred stock (See Note 5)			—						—						—						—						(8.1)						—						—						(8.1)
Contributions from noncontrolling interest(2)			—						—						—						—						—						—						204.6						204.6
Distributions to noncontrolling interests			—						—						—						—						—						—						(2.0)						(2.0)
Stock issuances:
Employee stock purchase plan			—						—						—						1.5						—						—						—						1.5
Long-term incentive plan			—						—						—						6.0						—						—						—						6.0
401(k) and profit sharing			—						—						—						2.4						—						—						—						2.4
Balance as of September 30, 2023			$	4.2					$	1,152.6					$	(99.9)					$	7,393.0					$	(1,200.6)					$	(36.9)					$	556.9					$	7,769.3
(1) See Note 5, "Equity," for additional information. (2) Contributions from noncontrolling interest is net of commitment and consulting fees and other legal costs related to the substantial completion closing of Dunns Bridge I of $0.2 million and Indiana Crossroads Solar of $1.1 million.
(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			—						—						—						—						476.9						—						5.6						482.5
Other comprehensive income, net of tax			—						—						—						—						—						0.2						—						0.2
Dividends:
Common stock ($1.00 per share)			—						—						—						—						(413.9)						—						—						(413.9)
Preferred stock (See Note 5)			—						—						—						—						(43.8)						—						—						(43.8)
Preferred stock redemption			—						(393.9)						—						—						—						—						—						(393.9)
Preferred stock redemption premium			—						—						—						—						(6.2)						—						—						(6.2)
Contributions from noncontrolling interest(2)			—						—						—						—						—						—						236.9						236.9
Distributions to noncontrolling interests			—						—						—						—						—						—						(12.0)						(12.0)

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NiSource Inc.

Electric Operations

Financial and operational data for the Electric Operations segment for the three and nine months ended September 30, 2023 and 2022 are presented below.

			Three Months Ended September 30,																		Nine Months Ended September 30,
(in millions)			2023						2022						Favorable (Unfavorable)						2023						2022						Favorable (Unfavorable)
Operating Revenues			$	499.1					$	516.5					$	(17.4)					$	1,360.9					$	1,384.1					$	(23.2)
Operating Expenses
Cost of energy			109.2						172.8						63.6						375.3						420.8						45.5
Operation and maintenance			122.2						126.5						4.3						374.7						367.3						(7.4)
Depreciation and amortization			82.3						88.1						5.8						275.0						267.0						(8.0)
Gain on sale of assets			—						—						—						(0.1)						—						0.1
Other taxes			9.6						5.8						(3.8)						28.7						33.9						5.2
Total Operating Expenses			323.3						393.2						69.9						1,053.6						1,089.0						35.4
Operating Income			$	175.8					$	123.3					$	52.5					$	307.3					$	295.1					$	12.2
Revenues
Residential			$	176.0					$	178.7					$	(2.7)					$	449.2					$	454.3					$	(5.1)
Commercial			156.6						158.9						(2.3)						437.6						428.1						9.5
Industrial			116.0						152.1						(36.1)						363.3						421.0						(57.7)
Wholesale			15.4						4.1						11.3						25.5						10.6						14.9
Other			35.1						22.7						12.4						85.3						70.1						15.2
Total			$	499.1					$	516.5					$	(17.4)					$	1,360.9					$	1,384.1					$	(23.2)
Sales (GWh)
Residential			1,034.6						1,080.6						(46.0)						2,540.5						2,745.2						(204.7)
Commercial			1,011.0						1,044.7						(33.7)						2,743.7						2,845.3						(101.6)
Industrial			2,023.7						2,076.3						(52.6)						5,955.3						6,078.8						(123.5)
Wholesale			0.2						4.9						(4.7)						0.9						37.0						(36.1)
Other			17.6						17.9						(0.3)						58.2						67.5						(9.3)
Total			4,087.1						4,224.4						(137.3)						11,298.6						11,773.8						(475.2)
Cooling Degree Days			475						592						(117)						681						934						(253)
Normal Cooling Degree Days			573						573						—						820						820						—
% (Colder) Warmer than Normal			(17)		%				3		%										(17)		%				14		%
% (Colder) than prior year			(20)		%																(27)		%
Electric Customers
Residential																					426,054						423,764						2,290
Commercial																					58,556						58,196						360
Industrial																					2,126						2,133						(7)
Wholesale																					708						711						(3)
Other																					3						3						—
Total																					487,447						484,807						2,640

Comparability of operation and maintenance expenses and depreciation and amortization may be impacted by regulatory and depreciation trackers that allow for the recovery in rates of certain costs.

The underlying reasons for changes in our operating revenues for the three and nine months ended September 30, 2023 compared to the same periods in 2022 are presented below.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

NiSource Inc.

Electric Operations

			Favorable (Unfavorable)
Changes in Operating Revenues (in millions)			Three Months Ended September 30, 2023 vs 2022						Nine Months Ended September 30, 2023 vs 2022
New rates from regulatory capital and DSM programs			45.5						51.0
Increased (Decreased) customer usage			6.4						(9.7)
FAC over earnings reserve			5.2						5.2
Renewable Joint Venture revenue, fully offset

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