AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Customer-choice programs preserve NiSource transportation service, and regulation supports investment recovery. These establish an incumbent delivery advantage, but absent exclusivity and duplication-cost evidence limit its demonstrated strength.
durability · 2/4 · Approved infrastructure recovery and continued transportation support persistence, while regulatory discretion and heating substitution limit confidence in long-term protection. These risks are prospective, not evidence that recovery has already failed.
customer dependency · 2/4 · Customers choosing third-party gas still use subsidiary transportation, supporting dependency on delivery infrastructure. This is indirect evidence of dependency; switching costs and longitudinal demand are not quantified.
erosion resilience · 2/4 · Infrastructure recovery approvals and cost pass-through provide defenses. However, they do not eliminate regulatory disallowance or fuel substitution, and second-quarter 2026 operating income declined despite higher revenue.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Disclosed rates pass gas-price variability through for most customers, and hedge gains and losses flow through recovery mechanisms. This supports mixed pricing effectiveness through cost recovery; no base-rate or unit-price bridge demonstrates discretionary increases.
retention · 2/4 · Customer-choice participation demonstrates that alternative supply can coexist with continued NiSource transportation. Retention is assessed indirectly from these operating arrangements, without an invented retention rate or evidence of longitudinal customer stability.
margin resilience · 2/4 · Cost pass-through and rising 2023–2025 operating income support resilience, but first-half 2026 revenue growth outpaced operating income growth and second-quarter operating income fell. Regulation provides partial protection rather than assured profitability.
contractual freedom · 1/4 · Regulators determine and approve utility rates, including investment returns, while specified hedge results must be recovered from or refunded to customers. This directly constrains unilateral pricing freedom; data-center pricing terms are unavailable.
Predictability56
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 13.37
- Positive FCF years (%)
- 0.00
- FCF margin volatility (pp)
- 3.17
Financial strength4
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 17.02
- currentRatioGrade
- 0.00
- Net debt / operating income (x)
- 8.77
- Interest coverage (x)
- 2.87
- Current ratio (x)
- 0.69
Capital allocation32
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 6.53
- 3-year average dilution (%)
- 5.16
- 3-year average SBC / revenue (%)
- 0.74
- cashConversionGrade
- 0.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual financing access supports investment, but 2025 capital expenditures exceeded operating cash flow. First-half 2026 operating cash flow also remained below investing outflows, with further borrowing, share issuance and substantial capacity commitments. These establish mixed funding discipline; project returns and commitment outcomes remain unproven.
incentive alignment · 3/4 · Approved multi-year PSU measures include adjusted EPS, relative shareholder return and operational safety. Actual grants, forfeitures and vesting, together with an adopted recoupment policy, substantiate alignment mechanisms. Non-GAAP adjustments and missing executive ownership evidence limit conclusions about effectiveness.
execution · 2/4 · Multi-year operating income and adjusted EPS growth, plus an approved infrastructure recovery program, demonstrate execution beyond management aspirations. Latest results are mixed: first-half 2026 operating income increased modestly while common-shareholder earnings and EPS declined. Financial outcomes are indirect evidence of execution, not proof of safety or service-quality performance.
governance · 3/4 · Disclosed existing arrangements include a separate chair and CEO, independent committees, annual director elections and shareholder rights. Actual audit committee meetings without management and an adopted recoupment policy support functioning oversight. These do not establish exceptional effectiveness or eliminate undisclosed weaknesses.
Evidence
Certain of our subsidiaries are involved in programs that provide our residential and commercial customers the opportunity to purchase their natural gas requirements from third parties and use our subsidiaries for transportation services.
Item 1, Business: customer-choice programs and transportation services · Filed 11/02/2026
As of December 31, 2025, 34.9% of our residential customers and 41.1% of our commercial customers participated in such programs.
Item 1, Business: customer-choice participation at December 31, 2025 · Filed 11/02/2026
Due to open access and the deregulation of natural gas supplies, our LDC customers can purchase gas directly from producers and marketers in an open, competitive market.
Item 1, Business: competitive natural gas supply · Filed 11/02/2026
We compete with (i) investor-owned, municipal, and cooperative electric utilities throughout our service areas, (ii) other regulated and unregulated natural gas intra and interstate pipelines and (iii) other alternate fuels, such as propane and fuel oil.
Item 1, Business: generic competing utilities, pipelines and fuels · Filed 11/02/2026
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (continued) REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Company’s subsidiaries’ rates are determined and approved in regulatory proceedings based on an analysis of the subsidiaries’ costs to provide utility service and a return on, and recovery of, the subsidiaries’ investment in the utility business.
Item 8, independent auditor report: regulatory determination of rates and investment recovery · Filed 11/02/2026
The respective commission’s regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital.
Item 8, independent auditor report: prudent cost recovery and reasonable returns · Filed 11/02/2026
While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the commission will not approve: (1) full recovery of the costs of providing utility service, or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.
Item 8, independent auditor report: risk of incomplete cost and investment recovery · Filed 11/02/2026
Alternative energy sources, new technologies or alternatives to natural gas space heating, including cold climate heat pumps and/or efficiency of other products, and potential competition supported by changes in laws or regulations, including potential natural gas bans or restrictions, such as the Department of Energy's furnace rule banning non-condensing gas furnaces, could reduce demand and increase customer attrition, which could impact our ability to recover on our investments in our gas distribution assets.
Item 1A, Risk Factors: heating alternatives, restrictions and potential asset recovery consequences · Filed 11/02/2026
In the event that regulation significantly changes the opportunity for us to recover our costs in the future, all or a portion of our regulated operations may no longer meet the criteria for the application of ASC Topic 980, Regulated Operations.
Item 7, Critical Accounting Estimates: potential loss of regulated accounting eligibility · Filed 11/02/2026
Construction delays, cost overruns or performance issues with the Contract Assets could reduce our returns under the ADS Contract or other future data center contracts and could require us to obtain additional financing.
Item 1A, Risk Factors: data-center construction costs, returns and financing · Filed 11/02/2026
The following table describes the most recent vintage of our regulatory programs to recover infrastructure replacement and other federally mandated compliance investments: (in millions) Company Program Capital Investment Investment Period Filing Date Costs Covered(1) Approved Columbia of Ohio CEP - 2025 $ 1,027.8 4/21-12/24 2/27/2025 Assets not included in the IRP or PHMSA IRP.
Item 2, Regulatory Capital Programs: approved Ohio infrastructure investment recovery program · Filed 05/08/2026
We purchase natural gas for sale and delivery to our retail, commercial and industrial customers, and for most customers the variability in the market price of gas is passed through in their rates.
Note on commodity price risk management: gas cost pass-through for most customers · Filed 05/08/2026
Under both programs, all gains and losses on these derivative contracts are deferred as regulatory liabilities or assets and are remitted to or collected from customers through the relevant cost recovery mechanism.
Note on commodity price risk management: regulatory recovery or refund of hedge results · Filed 05/08/2026
Condensed Statements of Consolidated Income (unaudited) Three Months Ended June 30, Six Months Ended June 30, (in millions, except per share amounts) 2026 2025 2026 2025 Operating Revenues Customer revenues $ 1,289.5 $ 1,246.5 $ 3,611.8 $ 3,396.0 Other revenues 52.9 36.5 93.7 70.2 Total Operating Revenues 1,342.4 1,283.0 3,705.5 3,466.2 Operating Expenses Cost of energy 193.6 261.8 862.8 909.3 Operation and maintenance 474.9 396.2 964.1 824.0 Depreciation and amortization 362.2 286.7 650.5 545.3 Loss on impairment of assets — 0.4 — 0.7 Loss on sale of assets, net — 0.8 — 0.8 Other taxes 83.6 74.2 180.8 163.8 Total Operating Expenses 1,114.3 1,020.1 2,658.2 2,443.9 Operating Income 228.1 262.9 1,047.3 1,022.3 Other Income (Deductions) Interest expense, net (199.2) (139.1) (390.8) (271.9) Other, net 18.2 0.5 32.6 6.3 Total Other Deductions, Net (181.0) (138.6) (358.2) (265.6) Income before Income Taxes 47.1 124.3 689.1 756.7 Income Taxes 10.2 23.8 96.0 129.5 Net Income 36.9 100.5 593.1 627.2 Net income (loss) attributable to noncontrolling interest (8.6) (1.7) 40.5 50.2 Net Income Attributable to NiSource 45.5 102.2 552.6 577.0 Preferred dividends redemption premium — — 3.6 — Net Income Available to Common Shareholders $ 45.5 $ 102.2 $ 556.2 $ 577.0 Earnings Per Share Basic Earnings Per Share $ 0.10 $ 0.22 $ 1.16 $ 1.22 Diluted Earnings Per Share $ 0.09 $ 0.22 $ 1.15 $ 1.22 Basic Average Common Shares Outstanding 479.7 471.0 479.4 470.6 Diluted Average Common Shares 481.2 472.1 481.0 472.3 The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.
Condensed Statements of Consolidated Income: second-quarter and first-half 2026 comparisons · Filed 05/08/2026
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (continued) Notes to Consolidated Financial Statements Year Ended December 31, 2025 (in millions) Total Reportable Segments Corporate and Other Eliminations Consolidated NiSource Total Operating Revenue $ 6,651.8 $ 600.1 $ (609.7) $ 6,642.2 Operating Income 1,833.2 2.1 — 1,835.3 Capital Expenditures 3,721.9 329.7 — 4,051.6 Assets 34,030.4 1,828.3 — 35,858.7 Year Ended December 31, 2024 (in millions) Total Reportable Segments Corporate and Other Eliminations Consolidated NiSource Total Operating Revenue $ 5,468.0 $ 581.9 $ (594.8) $ 5,455.1 Operating Income 1,448.5 7.0 — 1,455.5 Capital Expenditures 3,461.4 231.1 — 3,692.5 Assets 30,593.0 1,195.1 — 31,788.1 Year Ended December 31, 2023 (in millions) Total Reportable Segments Corporate and Other Eliminations Consolidated NiSource Total Operating Revenue $ 5,517.7 $ 504.6 $ (516.9) $ 5,505.4 Operating Income 1,280.0 15.5 — 1,295.5 Capital Expenditures 2,454.4 236.3 — 2,690.7 Assets 27,627.1 3,450.1 — 31,077.2 22.
Note on segment information: 2023–2025 operating income and capital expenditures · Filed 11/02/2026
Cash Flow Activities The following table summarizes our cash flow activities: Six Months Ended June 30, (in millions) 2026 2025 Change in 2026 vs 2025 Cash from (used for): Operating Activities $ 1,122.7 $ 1,181.8 $ (59.1) Investing Activities (2,106.8) (2,566.3) 459.5 Financing Activities $ 943.8 $ 1,551.5 $ (607.7) Operating Activities The year over year decrease in cash from operating activities was primarily attributable to changes in exchange gas receivables, partially offset by increases in accounts receivable and depreciation.
Item 2, Cash Flow Activities: first-half operating, investing and financing cash flows · Filed 05/08/2026
Details of our long-term debt activity are summarized below: •In May 2026, we completed the issuance and sale of $500.0 million of 4.75% senior unsecured notes maturing in 2031, and $750.0 million of 5.30% senior unsecured notes maturing in 2036.
Item 2, Liquidity and Capital Resources: completed May 2026 debt issuance · Filed 05/08/2026
Condensed Statements of Consolidated Equity (unaudited) (continued) Common Shares (in thousands) Shares Treasury Outstanding Balance as of March 31, 2026 483,328 (3,963) 479,365 Issued: Employee stock purchase plan 45 — 45 Long-term incentive plan 42 — 42 401(k) and profit sharing 46 — 46 Balance as of June 30, 2026 483,461 (3,963) 479,498 Common Shares (in thousands) Shares Treasury Outstanding Balance as of December 31, 2025 482,395 (3,963) 478,432 Issued: Employee stock purchase plan 90 — 90 Long-term incentive plan 873 — 873 401(k) and profit sharing 103 — 103 Balance as of June 30, 2026 483,461 (3,963) 479,498 Common Shares (in thousands) Shares Treasury Outstanding Balance as of March 31, 2025 474,581 (3,963) 470,618 Issued: Employee stock purchase plan 48 — 48 Long-term incentive plan 62 — 62 401(k) and profit sharing 56 — 56 Balance as of June 30, 2025 474,747 (3,963) 470,784 Common Shares (in thousands) Shares Treasury Outstanding Balance as of December 31, 2024 473,785 (3,963) 469,822 Issued: Employee stock purchase plan 94 — 94 Long-term incentive plan 744 — 744 401(k) and profit sharing 124 — 124 Balance as of June 30, 2025 474,747 (3,963) 470,784 The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.
Condensed Statements of Consolidated Equity: actual common share issuance · Filed 05/08/2026
In April 2026, GenCo entered into a capacity agreement for the period from 2028 through 2040 for approximately $1.1 billion, also to support the contracted demand load of its data center customers.
Note on commitments: GenCo capacity agreement for 2028–2040 · Filed 05/08/2026
This capacity agreement is subject to regulatory approval.
Note on commitments: regulatory approval condition on capacity agreement · Filed 05/08/2026
2025 PSU PERFORMANCE MEASURES AND GOALS Performance Measure Weight Threshold Target Stretch Three-Year Cumulative Adjusted EPS 50% $5.94 $6.04 $6.16 Three-Year RTSR 30% 30th Percentile 50th Percentile 80th Percentile Operational Excellence and Safety Annual Operational Excellence and Safety Index Scorecard: 3 Year Average 10% See performance measures outlined in the table above.
CD&A: approved 2025 PSU performance measures and weights · Filed 30/03/2026
Award Year Service Conditions Lapse date Performance Period Award Conditions Shares outstanding at 12/31/2025 (shares) Grant Date Fair Value (in millions) 2025 2/29/2028 01/01/2025- 12/31/2027 Non-GAAP Financial and Operational Measures 449,007 $ 11.5 Relative Total Shareholder Return 190,095 $ 4.7 2024 2/26/2027 01/01/2024- 12/31/2026 Non-GAAP Financial and Operational Measures 610,945 $ 15.7 Relative Total Shareholder Return 203,614 $ 6.2 2023 2/28/2026 01/01/2023- 12/31/2025 Non-GAAP Financial and Operational Measures 421,980 $ 17.1 Relative Total Shareholder Return 140,647 $ 9.3 A summary of our performance award transactions for the year ended December 31, 2025 is as follows: (shares) Performance Awards Weighted Average Grant Date Fair Value Per Unit ($) Non-vested at December 31, 2024 1,719,223 24.96 Granted 643,683 41.26 Forfeited (83,879) 31.36 Vested (334,843) 32.91 Non-vested at December 31, 2025 1,944,184 18.93 Non-employee Director Awards.
Note 17, Share-Based Compensation: granted, forfeited, vested and outstanding performance awards · Filed 11/02/2026
Our Board has also adopted a standalone executive compensation recoupment policy consistent with the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rule 10D-1 and the NYSE listing standards thereunder, which requires the Company to recover “excess” incentive compensation received by NEOs due to a financial restatement (except in certain limited cases permitted by regulation) to help ensure that incentive compensation is paid based on accurate financial and operating data, and the correct calculation of performance against incentive targets.
CD&A: adopted executive compensation recoupment policy · Filed 30/03/2026
2026 PROXY STATEMENT TABLE OF CONTENTS PROXY STATEMENT SUMMARY GOVERNANCE HIGHLIGHTS Annual election of directors Majority voting for all directors with resignation policy No supermajority voting provisions No stockholder rights plan (“poison pill”) Proxy access by-law (3% ownership / 3 years duration / up to 20 stockholders / 20% of board) Stockholder right to call special meetings Separate chair and CEO All directors independent, except CEO Board committees comprised of all independent directors Regular executive sessions of independent directors Annual Board and committee evaluation process and ongoing evaluations of individual directors Strategic and risk oversight by Board and committees Annual “Say-on-Pay” advisory votes Strong alignment between pay and performance in incentive plans Commitment to safety and customer experience Political contributions disclosure Enhanced independent registered public accounting firm disclosure Publication of annual sustainability report See “Corporate Governance” for more information on our corporate governance practices.
Proxy Statement Summary: existing governance arrangements · Filed 30/03/2026
In the performance of its responsibilities, the Audit Committee met regularly with the members of our internal audit function and Deloitte, with and without management present, to discuss, among other items, the results of its examinations, evaluations of our internal controls, the overall quality, not just the acceptability, of our financial reporting.
Audit Committee Report: actual meetings with internal audit and external auditor · Filed 30/03/2026
2026 PROXY STATEMENT TABLE OF CONTENTS Appendix A to Proxy Statement Reconciliation of Consolidated Net Income Available to Common Shareholders to Adjusted Net Income Available to Common Shareholders (Non-GAAP) and Adjusted Earnings Per Share (Non-GAAP) (Unaudited) For the Year Ended (in millions, except per share amounts) 2025 2024 2023 2022 2021 GAAP Net Income Available to Common Shareholders $929.5 $739.7 $661.7 $749.0 $529.8 Adjustments to Operating Income: Operating Revenues: Weather - compared to normal(1) (32.6) 60.4 60.6 (24.9) 1.2 FAC adjustment(2) — — — 8.0 — Operating Expenses: Greater Lawrence Incident — — — — 9.2 Plant retirement costs — — — — 14.1 NiSource Next initiative(3) — — — 3.3 24.7 Massachusetts Business related amounts(4) — — — (105.0) 6.8 Total adjustments to operating income (32.6) 60.4 60.6 (118.6) 56.0 Other Income (Deductions): Interest rate swap settlement gain — — — (10.0) — Income Taxes: Tax effect of above items(5) 8.3 (15.5) (15.8) 27.8 (14.6) Preferred Dividends: Preferred dividends redemption premium(6) — 14.0 9.8 — — Total adjustments to net income (24.3) 58.9 54.6 (100.8) 41.4 Adjusted Net Income Available to Common Shareholders $905.2 $798.6 $716.3 $648.2 $571.2 Diluted Average Common Shares 474.5 456.0 447.9 442.7 417.3 GAAP Diluted Earnings Per Share(7) $1.95 $1.62 $1.48 $1.70 $1.27 % Growth in Diluted Earnings Per Share from Prior Year(8) 20.4% 9.5% (12.9)% 33.9% Adjustments to diluted earnings per share (0.05) 0.13 0.12 (0.23) 0.10 Adjusted Earnings Per Share $1.90 $1.75 $1.60 $1.47 $1.37 % Growth in Adjusted Earnings Per Share from Prior Year(9) 8.6% 9.4% 8.8% 7.3% (1) Represents the estimated impact of actual weather during the period compared to expected normal weather.
Appendix A: 2021–2025 GAAP and adjusted earnings reconciliation · Filed 30/03/2026
Reconciliation of Net Cash Flows from Operating Activities to FFO to Debt (Adjusted) (Non-GAAP) (Unaudited) Annual FFO/Debt Reconciliation ($ in millions) 2025 Net Cash Flows from Operating Activities 2,362 - Accounts receivable (273) - Inventories (60) - Accounts payable 132 - Exchange gas receivable/payable 136 - Other accruals 68 - Prepayments and other current assets (37) - Other adjustments (36) Funds from Operations (Adjusted) 2,434 Long-term debt 15,458 + Current portion of long-term debt 20 + Short-term borrowings 736 + Other adjustments (1,110) Total Adjusted Debt 15,103 FFO to Debt (Adjusted) 16.1% A-2 NISOURCE INC.
Appendix A: 2025 operating cash flow, adjusted funds from operations and debt · Filed 30/03/2026
