- 2022 guidance and long-term earnings growth reaffirmed
- Renewable generation projects remain on target with previously
revised in-service dates
- Steady progress on regulatory agenda continues with settlement
approved in NIPSCO gas rate case and settlement discussions in
Ohio and Pennsylvania
- Fall Investor Day expected in November, focused on extending
NiSource's growth plan
- Safety, reliability, customer affordability and sustainability
remain top priorities
MERRILLVILLE, Ind., Aug. 3, 2022
/PRNewswire/ -- NiSource Inc. (NYSE: NI) today announced, on a GAAP
basis, net income available to common shareholders for the three
months ended June 30, 2022 of $53.2
million, or $0.12 diluted
earnings per share, compared to net income available to common
shareholders of $46.5 million, or
$0.11 diluted earnings per share, for
the same period of 2021. For the six months ended June 30,
2022, on a GAAP basis NiSource's net income available to common
shareholders was $466.2 million, or
$1.06 diluted earnings per share,
compared to net income available to common shareholders of
$328.2 million, or $0.80 diluted earnings per share, for the same
period of 2021.
NiSource also reported non-GAAP net operating earnings available
to common shareholders of $53.9
million, or $0.12 diluted
earnings per share, for the three months ended June 30, 2022,
compared to non-GAAP net operating earnings available to common
shareholders of $52.6
million, or $0.13 diluted
earnings per share, for the same period of 2021. For the six months
ended June 30, 2022, NiSource's non-GAAP net operating
earnings available to common shareholders was $382.6 million, or $0.87 diluted earnings per share compared to
non-GAAP net operating earnings available to common shareholders of
$357.4 million, or $0.88 diluted earnings per share, for the same
period of 2021. Schedule 1 of this press release contains a
complete reconciliation of GAAP measures to non-GAAP measures.
"The NiSource team's focus on safety and operational excellence
will continue to drive our plans for growth and sustainability,
while providing the reliable service our customers deserve," said
Lloyd Yates, president and CEO. "The
U.S. Commerce department's pause on solar panel tariffs gives us
more confidence and clarity on the revised renewable project
timelines. We expect these renewable investments and the
flexibility of our mitigation plan to provide the path to meeting
our commitment to deliver 7 - 9% compound annual growth in non-GAAP
NOEPS from 2021 through 2024. The team also continues its
advancement of our regulatory execution that drives benefits to our
stakeholders. I'm excited about our organization and our executive
team, and I look forward to extending our growth plan at an
Investor Day planned for November."
Reaffirming 2022 and long-term financial guidance
Consistent with its near and long-term growth commitments,
NiSource reaffirms its 2022 non-GAAP diluted net operating earnings
per share (NOEPS) guidance of $1.42
to $1.48.
NiSource also continues to expect non-GAAP diluted NOEPS to grow
by 7 to 9 percent, from 2021's full year results of $1.37 through 2024, on a compound annual growth
rate basis, including near-term annual growth of 5 to 7 percent
through 2023. 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.
Renewable generation transition
The company remains on track to make capital investments
totaling approximately $10 billion
during the 2021-2024 period. Capital investments for renewable
projects of approximately $2.0
billion are expected, primarily between 2022 and 2024, with
any remainder expected in 2025. In total, capital investments are
expected to drive compound annual rate base growth of 10 to 12
percent for each of the company's businesses through 2024.
NiSource expects to be coal free by 2026-2028, with renewable
generation providing reliable energy while saving customers money
over the long term. Schahfer Generating Station's remaining two
coal units are expected to retire by the end of 2025, with Michigan
City Generating Station retiring between 2026-2028.
Environmental impact targets update
The company continues to make strong progress toward its
environmental goals and is on target to reach them. They
include:
- Reduce scope 1 greenhouse gas emissions 90% (from 2005 levels)
by 2030
- Achieve 50% reduction (from 2005 levels) in methane emissions
from gas mains and services by 2025
Second quarter 2022 and recent business highlights
Electric operations
Northern Indiana Public Service Company's (NIPSCO)
Indiana Crossroads Solar and Dunns Bridge Solar I projects continue
to advance construction toward being in service in the first half
of 2023.
NiSource's first ever Green Bond issuance raised $350 million, closing on June 10, 2022. The proceeds from the issuance are
intended to be used to buy out the developer for NIPSCO's
302-megawatt Indiana Crossroads Wind project and 102-megawatt
Rosewater Wind project.
Gas distribution operations
NIPSCO received an order approving the settlement
agreement in its rate case, providing a revenue increase of
approximately $72 million annually,
with new rates effective in September
2022 and March 2023. This
balanced outcome demonstrates a positive path toward continued
investments in essential resources that will support safe
operations, upgrading aging infrastructure and enhancing the
customer experience.
Columbia Gas of Ohio has requested to reschedule
hearings in its rate case until October to facilitate continued
settlement discussions. The company has requested an increase of
$221.4 million, net of the Capital
Expenditure Program (CEP) and Infrastructure Replacement Program
(IRP) riders.
Columbia Gas of Pennsylvania is also engaging in
settlement discussions its rate case. The case requests additional
revenues of $82.2 million, which are
intended to further upgrade and replace gas lines for the long-term
safety of customers and communities. It also seeks to provide
additional energy efficiency options while balancing costs.
Columbia Gas of Virginia's rate case is
progressing. The company requests an increase in annual
revenues of approximately $40.6
million, net of the SAVE tracker, to continue safety and
modernization investments.
Columbia Gas of Maryland filed a rate case on
May 13. It seeks to further upgrade
and replace portions of the company's underground natural gas
distribution pipelines. If approved, the proposed rate adjustments
would not go into effect until the end of 2022
Additional information for the quarter ended June 30, 2022, is available on the Investors
section of www.nisource.com, including segment and financial
information and our presentation to be discussed at the company's
second quarter 2022 earnings conference call scheduled for
August 3, 2022 at 11 a.m. ET.
About NiSource
NiSource Inc. (NYSE: NI) is one of the
largest fully-regulated utility companies in the United States, serving approximately 3.2
million natural gas customers and 500,000 electric customers across
six states through its local Columbia Gas and NIPSCO brands. Based
in Merrillville, Indiana,
NiSource's approximately 7,500 employees are focused on safely
delivering reliable and affordable energy to our customers and
communities we serve. NiSource is a member of the Dow Jones
Sustainability - North America Index. Additional information about
NiSource, its investments in modern infrastructure and systems, its
commitments and its local brands can be found at www.nisource.com.
Follow us at www.facebook.com/nisource,
www.linkedin.com/company/nisource or www.twitter.com/nisourceinc.
The content of these websites is not incorporated by reference into
this document or any report or document NiSource files with the
SEC. NI-F
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"). 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 press release 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 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; 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; 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; changes in the method for determining LIBOR and the
potential replacement of the LIBOR benchmark interest rate; the
outcome of legal and regulatory proceedings, investigations,
incidents, claims and litigation; potential remaining liabilities
related to the Greater Lawrence Incident; compliance with the
agreements entered into with the U.S. Attorney's Office to settle
the U.S. Attorney's Office's investigation relating to the Greater
Lawrence Incident; compliance with or changes in applicable laws,
regulations and tariffs; compliance with environmental laws and the
costs of associated liabilities; changes in taxation; and other
matters set forth in Part I, Item 1A, "Risk Factors" of our Annual
Report on Form 10-K for the year ended December 31, 2021, and matters set forth in Part
II, Item 1A, "Risk Factors" of our Quarterly Report on Form 10-Q
for the quarter ended March 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.
Regulation G Disclosure Statement
This press release
includes financial results and guidance for NiSource with respect
to net operating earnings available to common shareholders, which
is a non-GAAP financial measure as defined by the Securities and
Exchange Commission's (SEC) Regulation G. The company includes this
measure because management believes it permits 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 this measure and its GAAP equivalent
due to various factors, including, but not limited to, fluctuations
in weather, the impact of asset sales and impairments, and other
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)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
GAAP Net Income
Available to Common Shareholders
|
$
53.2
|
|
$
46.5
|
|
$
466.2
|
|
$ 328.2
|
Adjustments to
Operating Income:
|
|
|
|
|
|
|
|
Operating
Revenues:
|
|
|
|
|
|
|
|
Weather - compared to
normal
|
(8.3)
|
|
(6.1)
|
|
(11.3)
|
|
2.9
|
FAC
adjustment(1)
|
8.0
|
|
—
|
|
8.0
|
|
—
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Greater Lawrence
Incident
|
—
|
|
1.2
|
|
—
|
|
7.0
|
Plant retirement
costs
|
—
|
|
8.6
|
|
—
|
|
8.6
|
NiSource Next
initiative(2)
|
1.2
|
|
4.6
|
|
2.7
|
|
14.3
|
Massachusetts Business
related amounts(3)
|
—
|
|
—
|
|
(105.0)
|
|
6.9
|
Total adjustments to
operating income
|
0.9
|
|
8.3
|
|
(105.6)
|
|
39.7
|
Income
Taxes:
|
|
|
|
|
|
|
|
Tax effect of above
items(4)
|
(0.2)
|
|
(2.2)
|
|
22.0
|
|
(10.5)
|
Total adjustments to
net income
|
0.7
|
|
6.1
|
|
(83.6)
|
|
29.2
|
Net Operating
Earnings Available to Common Shareholders (Non-GAAP)
|
$
53.9
|
|
$
52.6
|
|
$
382.6
|
|
$ 357.4
|
Diluted Average
Common Shares
|
440.2
|
|
422.9
|
|
440.8
|
|
408.5
|
GAAP Diluted
Earnings Per Share(5)
|
$
0.12
|
|
$
0.11
|
|
$
1.06
|
|
$
0.80
|
Adjustments to diluted
earnings (loss) per share
|
—
|
|
0.02
|
|
(0.19)
|
|
0.08
|
Non-GAAP Diluted Net
Operating Earnings Per Share(5)
|
$
0.12
|
|
$
0.13
|
|
$
0.87
|
|
$
0.88
|
|
(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. 2021 primarily represents
final net working capital adjustments to the purchase price for the
loss incurred on the sale of the Massachusetts
Business.
|
(4)Represents income tax expense
calculated using the statutory tax rates by legal
entity.
|
(5)The
Non-GAAP diluted NOEPS numerator is equal to net operating earnings
available to common shareholders adjusted for 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, 2022 and 2021 were $0.5M and $0.4M, respectively. The
add-back for the six months ended June 30, 2022 and 2021 were
$1.0M and $0.4M, respectively.
|
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SOURCE NiSource Inc.