

~~Standard~~	~~Description~~	~~Effective Date~~	~~Effect on the financial statements or other significant matters~~
~~ASU 2017-07,~~ ~~Compensation -~~ ~~Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~	The pronouncement changes how defined benefit pension and other postretirement benefit plans present net periodic benefit cost. The service cost component of net periodic benefit cost will be included with other employee compensation costs whereas other components of the net periodic benefit cost will be disclosed separately outside of income from operations in the income statement. Additionally, only the service cost component of net periodic benefit cost will be eligible for capitalization.	~~Annual periods beginning after December 15, 2017, including interim periods therein. Early adoption is permitted.~~	NiSource plans to adopt the standard effective January 1, 2018. Upon adoption, NiSource will continue to present the service cost component of net periodic benefit cost within "Operation and maintenance"; however, other components of the net periodic benefit cost will be presented separately below "Operating Income" in the income statement. This change in income statement presentation will be implemented on a retrospective basis. Additionally, beginning prospectively on the date of adoption, only the service cost component of NiSource's net periodic benefit cost component will be eligible for capitalization as "Property, Plant and Equipment" on the balance sheet. NiSource is currently evaluating the impact of adoption on the Condensed Consolidated Financial Statements (unaudited) and Notes to Condensed Consolidated Financial Statements (unaudited).

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)


Three months ended March 31, 2024 (in millions)	Columbia Operations		NIPSCO Operations		Corporate and Other		Total
Gas Distribution
Residential	$	628.0	$	212.1	$	—	$	840.1
Commercial	220.4		74.7		—		295.1
Industrial	40.1		23.8		—		63.9
Off-system	12.8		—		—		12.8
Wholesale	0.8		—		—		0.8

Miscellaneous(1)	8.2		7.9		—		16.1
Subtotal	$	910.3	$	318.5	$	—	$	1,228.8
Electric Generation and Power Delivery
Residential	$	—	$	143.8	$	—	$	143.8
Commercial	—		142.9		—		142.9
Industrial	—		115.9		—		115.9
Wholesale	—		6.3		—		6.3
Public Authority	—		2.1		—		2.1
Miscellaneous(1)	—		3.2		—		3.2

Subtotal	$	—	$	414.2	$	—	$	414.2
Total Customer Revenues(2)	910.3		732.7		—		1,643.0
Other Revenues(3)	43.4		19.7		0.2		63.3
Total Operating Revenues	$	953.7	$	752.4	$	0.2	$	1,706.3
(1)Amounts included in Columbia Operations are primarily related to earnings share mechanisms and late fees. Amounts included in NIPSCO Operations are primarily related to revenue refunds, public repairs and property rentals. (2)Customer revenue amounts exclude intersegment revenues. See Note 17, "Business Segment Information," for discussion of intersegment revenues. (3)Amounts included in Columbia Operations primarily relate to weather normalization adjustment mechanisms. Amounts included in NIPSCO Operations primarily relate to MISO multi-value projects and revenue from non-jurisdictional transmission assets.

Three months ended March 31, 2023 (in millions)	Columbia Operations		NIPSCO Operations		Corporate and Other		Total
Gas Distribution
Residential	$	684.6	$	302.4	$	—	$	987.0
Commercial	248.0		112.6		—		360.6
Industrial	40.4		31.5		—		71.9
Off-system	17.2		—		—		17.2
Wholesale	1.0		—		—		1.0

Miscellaneous(1)	11.8		5.6		—		17.4
Subtotal	$	1,003.0	$	452.1	$	—	$	1,455.1
Electric Generation and Power Delivery
Residential	$	—	$	150.4	$	—	$	150.4
Commercial	—		150.9		—		150.9
Industrial	—		134.2		—		134.2

Wholesale	—		2.6		—		2.6
Public Authority	—		2.1		—		2.1
Miscellaneous(1)	—		0.8		—		0.8
Subtotal	$	—	$	441.0	$	—	$	441.0
Total Customer Revenues(2)	1,003.0		893.1		—		1,896.1
Other Revenues(3)	45.9		23.8		0.2		69.9
Total Operating Revenues	$	1,048.9	$	916.9	$	0.2	$	1,966.0
(1)Amounts included in Columbia Operations are primarily related to earnings share mechanisms and late fees. Amounts included in NIPSCO Operations, are primarily related to revenue refunds, public repairs and property rentals. (2)Customer revenue amounts exclude intersegment revenues. See Note 17, "Business Segment Information," for discussion of intersegment revenues. (3)Amounts included in Columbia Operations are primarily relate to weather normalization adjustment mechanisms. Amounts included in NIPSCO Operations primarily relate to MISO multi-value projects and revenue from non-jurisdictional transmission assets.



~~Standard~~	~~Description~~	~~Effective Date~~	~~Effect on the financial statements or other significant matters~~
~~ASU 2016-12,~~ ~~Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients~~	~~The pronouncement clarifies implementation guidance in ASU 2014-09 on assessing collectability, noncash consideration and the presentation of sales and other similar taxes collected from customers.~~	~~Annual periods beginning after December 15, 2017, including interim periods therein. Early adoption is permitted for annual or interim periods beginning after December 15, 2016.~~	NiSource has formed an internal stakeholder group to promote information sharing and communication of the new requirements. Additionally, NiSource participates in an informal forum of industry peers where questions can be asked and interpretations of the new standard can be shared. Involvement in this group has resulted in additional clarity on industry-specific issues such as treatment of CIAC, scoping of tariff arrangements and presentation of alternative revenue programs. This clarity has furthered NiSource's adoption efforts. NiSource has separated its various revenue streams into high-level categories, which serve as the basis for accounting analysis and documentation as it relates to the pronouncement's impact on NiSource's revenues. Substantially all of NiSource’s revenues are tariff based, which NiSource concluded will be in scope of ASC 606. Based on evaluation performed to date, NiSource generally expects that the revenue from tariff based sales will continue to be equivalent to the natural gas or electricity supplied and billed each period (including unbilled revenues) and the adoption of the new guidance will not result in a material shift in the amount or timing of revenue recognition for such sales. NiSource has also undertaken efforts to outline mock footnote disclosures intended to satisfy ASC 606's disclosure requirements and expects to enhance its disclosures on revenue recognition policies and elections. Certain disclosure options continue to be evaluated at NiSource, including method and level of revenue disaggregation. NiSource intends to adopt this ASU effective January 1, 2018 and plans to use the modified retrospective method of adoption. If applicable, this method requires a cumulative effect adjustment to be recorded on the balance sheet as of January 1, 2018 and disclosures reconciling results under the new revenue recognition guidance to results under previous guidance. In its evaluation, NiSource continues to monitor industry implementation issues which could impact accounting policies and revenue recognition, including NiSource's preliminary conclusions described above.
~~ASU 2016-08,~~ ~~Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations~~	The pronouncement clarifies the principal versus agent guidance in ASU 2014-09. The amendment clarifies how an entity should identify the unit of accounting for the principal versus agent evaluation, and how it should apply the control principle to certain types of arrangements.
~~ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~	The pronouncement outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Customer Accounts Receivable. Accounts receivable on our Condensed Consolidated Balance Sheets (unaudited) includes both billed and unbilled amounts, as well as certain amounts that are not related to customer revenues. Unbilled amounts of accounts receivable relate to a portion of a customer’s consumption of gas or electricity from the date of the last cycle billing through the last day of the month (balance sheet date). Factors taken into consideration when estimating unbilled revenue include historical usage, customer rates, and weather. A significant portion of our operations are subject to seasonal fluctuations in sales. During the heating season, primarily from November through March, revenues and receivables from gas sales are more significant than in other months. The opening and closing balances of customer receivables for the three months ended March 31, 2024 are presented in the table below. We had no significant contract assets or liabilities during the period. Additionally, we have not incurred any significant costs to obtain or fulfill contracts.


(in millions)	Customer Accounts Receivable, Billed (less reserve)		Customer Accounts Receivable, Unbilled (less reserve)
Balance as of December 31, 2023	$	479.4	$	337.6
Balance as of March 31, 2024	552.1		263.6

Utility revenues are billed to customers monthly on a cycle basis. We expect that substantially all customer accounts receivable will be collected following customer billing, as this revenue consists primarily of periodic, tariff-based billings for service and usage. We maintain common utility credit risk mitigation practices, including requiring deposits and actively pursuing collection of past due amounts. Our regulated operations also utilize certain regulatory mechanisms that facilitate recovery of bad debt costs within tariff-based rates, which provides further evidence of collectibility. It is probable that substantially all of the consideration to which we are entitled from customers will be collected upon satisfaction of performance obligations.

Allowance for Credit Losses. To evaluate for expected credit losses, customer account receivables are pooled based on similar risk characteristics, such as customer type, geography, payment terms, and related macro-economic risks. Expected credit losses are established using a model that considers historical collections experience, current information, and reasonable and supportable forecasts. Internal and external inputs are used in our credit model including, but not limited to, energy consumption trends, revenue projections, actual charge-offs data, recoveries data, shut-offs, customer delinquencies, final bill data, and inflation. We continuously evaluate available information relevant to assessing collectability of current and future receivables. We evaluate creditworthiness of specific customers periodically or following changes in facts and circumstances. When we become aware of a specific commercial or industrial customer's inability to pay, an allowance for expected credit losses is recorded for the relevant amount. We also monitor other circumstances that could affect our overall expected credit losses including, but not limited to, creditworthiness of overall population in service territories, adverse conditions impacting an industry sector, and current economic conditions.



~~Standard~~	~~Description~~	~~Effective Date~~	~~Effect on the financial statements or other significant matters~~
~~ASU 2016-02,~~ ~~Leases (Topic 842)~~	The pronouncement introduces a lessee model that brings most leases on the balance sheet. The standard requires that lessees recognize the following for all leases (with the exception of short-term leases, as that term is defined in the standard) at the lease commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.	~~Annual periods beginning after December 15, 2018, including interim periods therein. Early adoption is permitted.~~	NiSource has formed an internal stakeholder group that meets periodically to share information and gather data related to leasing activity at NiSource. This includes compiling a list of all contracts that could meet the definition of a lease under the new standard and evaluating the accounting for these contracts under the new standard to determine the ultimate impact the new standard will have on NiSource’s financial statements. Also, this procedure has identified process improvements to ensure data from newly initiated leases is captured to comply with the new standard. This work included the assistance of a third-party advisory firm. NiSource plans to adopt this standard effective January 1, 2019.

~~Recently Adopted Accounting Pronouncements~~



~~Standard~~	~~Adoption~~
~~ASU 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)~~	NiSource elected to adopt this ASU effective October 1, 2017. Upon adoption, restricted cash on the Statements of Consolidated Cash Flows will no longer be presented as an investing activity and will instead be included as a component of beginning and ending cash balances. The adoption of this standard will be reflected in the Statements of Consolidated Cash Flows beginning with NiSource's Annual Report on Form 10-K for the year ending December 31, 2017 (including all prior periods presented).
~~ASU 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to accounting for Hedging Activities~~	NiSource elected to adopt this ASU effective September 30, 2017. Upon adoption, NiSource is no longer required to separately measure and report hedge ineffectiveness. The guidance also eases the requirements related to ongoing hedge effectiveness assessments at NiSource. The adoption of this standard did not have a material impact on the Condensed Consolidated Financial Statements (unaudited) or Notes to Condensed Consolidated Financial Statements (unaudited).
~~ASU 2017-09,~~ ~~Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting~~	NiSource elected to adopt this ASU effective July 1, 2017. The adoption of this standard did not have a material impact on the Condensed Consolidated Financial Statements (unaudited) or Notes to Condensed Consolidated Financial Statements (unaudited).
~~ASU 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~	NiSource elected to adopt this ASU effective January 1, 2017. The adoption of this standard did not have a material impact on the Condensed Consolidated Financial Statements (unaudited) or Notes to Condensed Consolidated Financial Statements (unaudited).

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

At each reporting period, we record expected credit losses to an allowance for credit losses account. When deemed to be uncollectible, customer accounts are written-off. A rollforward of our allowance for credit losses as of March 31, 2024 and December 31, 2023 are presented in the table below:


(in millions)	Columbia Operations		NIPSCO Operations		Corporate and Other		Total
Balance as of January 1, 2024	$	10.2	$	11.9	$	0.8	$	22.9
Current period provisions	11.0		3.6		—		14.6
Write-offs charged against allowance	(7.3)		(2.1)		(0.8)		(10.2)
Recoveries of amounts previously written off	4.1		0.2		—		4.3
Balance as of March 31, 2024	$	18.0	$	13.6	$	—	$	31.6


(in millions)	Columbia Operations		NIPSCO Operations		Corporate and Other		Total
Balance as of January 1, 2023	$	11.1	$	12.0	$	0.8	$	23.9
Current period provisions	28.3		11.5		—		39.8
Write-offs charged against allowance	(49.2)		(12.4)		—		(61.6)
Recoveries of amounts previously written off	20.0		0.8		—		20.8
Balance as of December 31, 2023	$	10.2	$	11.9	$	0.8	$	22.9

4. Noncontrolling Interests

Variable Interest Entities. A VIE is an entity in which the controlling interest is determined through means other than a majority voting interest. NIPSCO is a member of joint ventures that own and operate two wind facilities, Rosewater and Indiana Crossroads Wind, which have 102 MW and 302 MW of nameplate capacity, respectively. NIPSCO is also a member of joint ventures that own two solar facilities, Indiana Crossroads Solar and Dunns Bridge I, which have a combined 465 MW of nameplate capacity. We have determined that these joint ventures are VIEs. We control decisions that are significant to these entities' ongoing operations and economic results. Therefore, we have concluded that NIPSCO is the primary beneficiary and have consolidated all four entities.

Members of each respective JV include NIPSCO (who is the managing member) and a tax equity partner. Earnings, ~~Per Share~~

~~Basic EPS is computed~~tax attributes and cash flows are allocated to both NIPSCO and the tax equity partner in varying percentages by ~~dividing net income by~~category and over the ~~weighted-average number of shares of common stock outstanding for the period. The weighted-average shares outstanding for diluted EPS includes the incremental effects~~life of the ~~various long-term incentive compensation plans. The computation~~partnership. NIPSCO and each tax equity partner contributed cash to each JV. Once the tax equity partner has earned their negotiated rate of ~~diluted average common shares is as follows:~~

Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands) 2017 2016 2017 2016
Denominator
Basic average common shares outstanding 331,139
322,318
326,662
321,445
Dilutive potential common shares:
Shares contingently issuable under employee stock plans 604
228
503
146
Shares restricted under employee stock plans 653
1,372
866
1,606
Diluted Average Common Shares 332,396
323,918
328,031
323,197

~~4. Common Stock~~

~~ATM Program.~~ ~~On May 3, 2017, NiSource entered into four separate equity distribution agreements, pursuant~~return and have reached a stated contractual date, NIPSCO has the option to which NiSource may sell, from time to time, up to an aggregate of $500.0 million of its common stock. As of September 30, 2017, approximately $182.8 million of equity remained available for issuance underpurchase the ATM program. The program expires on December 31, 2018. Shares of common stock are offered pursuant to NiSource's shelf registration statement filed with the SEC. The following table summarizes NiSource's activity under the ATM program:

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Number of shares issued 10,612,915
—
11,931,376
—
Average price per share $ 26.67
$ —
$ 26.58
$ —
Proceeds, net of fees (in millions)
$ 281.0
$ —
$ 314.7
$ —

~~5. Regulatory Matters~~

~~Gas Distribution Operations Regulatory Matters~~

~~Cost Recovery and Trackers~~. Comparability of Gas Distribution Operations line item operating results is impacted by regulatory trackers that allow for the recovery in rates of certain costs such as those described below. Increasesremaining interest in the ~~expenses that are~~respective JV, at fair market value from the ~~subject of trackers result in a corresponding increase in net revenues and therefore have essentially no impact on total operating income results.~~

~~Certain operating costs~~tax equity partner. NIPSCO has an obligation to purchase 100% of the ~~NiSource distribution companies are significant, recurring in nature, and generally outside~~electricity generated by our commercially operational JVs.

We did not provide any financial or other support during the ~~control of the distribution companies. Some states allow the recovery of~~quarter that was not previously contractually required, nor do we expect to provide such costs through cost tracking mechanisms. Such tracking mechanisms allow for abbreviated regulatory proceedings in order for the distribution companies to implement charges and recover appropriate costs. Tracking mechanisms allow for more timely recovery of such costs as compared with more traditional cost recovery mechanisms. Examples of such mechanisms include GCR adjustment mechanisms, tax riders, and bad debt recovery mechanisms.

A portion of the distribution companies' revenue is related to the recovery of gas costs, the review and recovery of which occurs through standard regulatory proceedings. All states in NiSource's operating area require periodic review of actual gas procurement activity to determine prudence and to permit the recovery of prudently incurred costs related to the supply of gas for customers. NiSource distribution companies have historically been found prudentsupport in the ~~procurement of gas supplies to serve customers.~~

Certain of the NiSource distribution companies have completed rate proceedings involving infrastructure replacement or are embarking upon regulatory initiatives to replace significant portions of their operating systems that are nearing the end of theirfuture.

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

~~useful lives. Each LDC's approach to cost recovery may be unique, given~~Our Condensed Consolidated Balance Sheets (unaudited) included the ~~different laws, regulations~~following assets and ~~precedent that exist in each jurisdiction.~~

~~Columbia of Ohio.~~On November 28, 2012, the PUCO approved Columbia of Ohio’s application to extend its IRP for an additional five years (2013-2017), allowing Columbia of Ohio to continue to invest and recover on its accelerated main replacements. Columbia of Ohio filed its application to adjust ratesliabilities associated with ~~its IRP and DSM Riders on February 27, 2017, which requested authority~~VIEs.


(in millions)	March 31, 2024		December 31, 2023
Net Property, Plant and Equipment	$	1,358.2	$	1,369.8
Current assets	60.8		63.6

Total assets(1)	1,419.0		1,433.4
Current liabilities	60.9		68.3
Asset retirement obligations	56.3		55.7

Total liabilities(1)(2)	$	117.2	$	124.0

(1)The assets of each VIE represent assets of a consolidated VIE that can be used only to ~~increase annual revenues by approximately $31.5 million. On March 23, 2017, the PUCO Staff filed comments which recommended approval~~settle obligations of the ~~application with only minor revisions.~~respective consolidated VIE. The ~~PUCO issued~~creditors of the liabilities of the VIEs do not have recourse to the general credit of the primary beneficiary.
(2) In addition to the amounts disclosed above there is a de minimis amount of other noncurrent liabilities at Rosewater as of March 31, 2024.

Voting Interest Entities. In December 31, 2023, we consummated the NIPSCO Minority Interest Transaction for a capital contribution of $2.16 billion in cash. The difference between the $2.16 billion consideration received and the $1.36 billion carrying value of the noncontrolling interest claim on net assets was recorded to additional paid-in capital, net of $54.7 million in transaction costs and a $63.5 million income tax benefit. We retain a controlling financial interest in NIPSCO Holdings II and its subsidiaries and consolidate their financial results. During Q1 2024, we paid the remaining transaction costs that were accrued as of December 31, 2023.

5. Earnings Per Share

The calculations of basic and diluted EPS are based on the weighted average number of shares of common stock and potential common stock outstanding during the period. For the three months ended March 31, 2024, the weighted-average shares outstanding for diluted EPS includes the incremental effects of the various long-term incentive compensation plans and an ~~order on April 26, 2017, approving Columbia~~ATM forward agreement under the Treasury Stock Method when the impact would be dilutive (See Note 6, "Equity,"). For the purposes of ~~Ohio's application. New rates went into effect on May 1, 2017.~~

On February 27, 2017, Columbia of Ohio filed an application requesting authority to extend its IRP for an additional five years (2018-2022). On July 10, 2017, the PUCO Staff recommended approval of Columbia of Ohio's IRPdetermining diluted EPS, for the ~~additional five years, with modifications to Columbia~~three months ended March 31, 2023, the shares underlying the purchase contracts included within the Equity Units were included in the calculation of ~~Ohio's proposed IRP rates for~~potential common stock outstanding using the ~~five-year~~if-converted method under US GAAP and we assumed share settlement of the remaining purchase contract payment balance from our Equity Units based on the average share price during the period. A ~~joint stipulation and recommendation, outlining annual maximum IRP rates~~numerator adjustment was reflected in the calculation of diluted EPS for interest expense incurred in the five-year period, was filed on August 18, 2017 and was supported or not opposed by all parties except the OCC. A hearing was held on October 2, 2017 and briefing is scheduled to be completed by November 7, 2017. An order is expected by the endthree months ended March 31, 2023, net of ~~2017.~~

~~On October 27, 2017 Columbia of Ohio filed a 30-day notice that they plan to file a request for a rider to begin recovering plant and associated deferrals~~tax, related to the ~~CEP.~~purchase contracts. The ~~CEP was established~~purchase contracts were settled on December 1, 2023.

We began using the two-class method of computing earnings per share in ~~2011 and allows for deferral of interest, depreciation and property taxes on certain plant investments not recovered through its IRP modernization tracker.~~

~~NIPSCO Gas.~~On September 27, 2017, NIPSCO filed a base rate case with the IURC, seeking an annual revenue increase of $143.5 million (inclusive of amounts being recovered through various tracker programs). As part of this filing and among other items, NIPSCO proposed to update base rates for ongoing infrastructure improvements, revised depreciation rates and ongoing level of expenses to reflect the current costs of providing natural gas service. An order is expected2023 because we have participating securities in the ~~second half~~form of ~~2018.~~

~~On April 30, 2013, then Indiana Governor Pence signed Senate Enrolled Act 560,~~non-vested restricted stock units with a non-forfeitable right to dividend equivalents, for which vesting is predicated solely on the ~~TDSIC statute, into law. Among other provisions, this legislation provides for cost recovery outside~~passage of ~~a base rate proceeding for new or replacement electric and gas transmission, distribution, and storage projects that a public utility undertakes for~~time. The calculation of earnings per share using the purposes of safety, reliability, system modernization, or economic development. Provisions of the TDSIC statute require that, among other things, requests for recovery include a seven-year plan of eligible investments. Once the plan is approved by the IURC, eighty percent of eligible costs can be recovered using a periodic rate adjustment mechanism. The cost recovery mechanism is referredtwo-class method excludes income attributable to as a TDSIC mechanism. Recoverable costs include a return on, and of, the investment, including AFUDC, post-in-service carrying charges, operation and maintenance expenses, depreciation and property taxes. The remaining twenty percent of recoverable costs are to be deferred for future recovery in the public utility’s next general rate case. The periodic rate adjustment mechanism is capped at an annual increase of no more than two percent of total retail revenues. On February 28, 2017, NIPSCO filed TDSIC-6 requesting approval of $271.3 million of cumulative net capital spend through December 31, 2016. An order approving NIPSCO's filing was receivedthese participating securities from the ~~IURC on June 28, 2017,~~numerator and ~~new rates went into effect on July 1, 2017. On August 31, 2017, NIPSCO filed TDSIC-7 requesting approval~~excludes the dilutive impact of ~~$328.9 million of cumulative net capital spend through June 30, 2017. An order is expected in the fourth quarter of 2017.~~

~~Columbia of Massachusetts.~~On July 7, 2014, the Governor of Massachusetts signed into law Chapter 149 of the Acts of 2014, An Act Relative to Natural Gas Leaks (“the Act”). The Act authorizes natural gas distribution companies to file gas infrastructure replacement plans with the Massachusetts DPU to address the replacement of aging natural gas pipeline infrastructure. In addition, the Act provides that the Massachusetts DPU may, after review of the plans, allow the proposed estimated costs of the plan into rates as of May 1 of the subsequent year. On October 31, 2016, Columbia of Massachusetts filed its GSEP for the 2017 construction year. In that filing, Columbia of Massachusetts proposed to recover a cumulative revenue requirement of $17.2 million. An order was receivedthose shares from the Massachusetts DPU on April 28, 2017 approving the filing and rates went into effect on May 1, 2017. On October 31, 2017, Columbia of Massachusetts filed its GSEP for the 2018 construction year. Columbia of Massachusetts is proposing to recover a cumulative revenue requirement of $26.8 million including a waiver to collect the $3.1 million revenue requirement in excess of the GSEP cap provision. If the waiver is not approved, the cumulative revenue requirement will be $23.7 million. An order is expected from the Massachusetts DPU in the second quarter of 2018, with new rates effective May 1, 2018.denominator.

~~Columbia of Virginia.~~ On April 29, 2016, Columbia of Virginia filed a request with the VSCC, seeking an annual revenue increase of $37.0 million. On September 28, 2016, Columbia of Virginia implemented updated interim base rates subject to refund. On January 17, 2017, Columbia of Virginia presented a stipulation and proposed recommendation, representing a settlement by all parties to the proceeding that included a base revenue increase of $28.5 million. On March 17, 2017, by final order, the VSCC approved the settlement agreement without modification. In accordance with the terms of the final order, during 2017 Columbia

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

The following table presents the calculation of our basic and diluted EPS:


	Three Months Ended March 31,
(in millions, except per share amounts)		2024		2023
Numerator:
Net Income Available to Common Shareholders		$	344.3	$	319.2
Less: Income allocated to participating securities		0.3		0.2
Net Income Available to Common Shareholders - Basic		344.0		319.0
Add: Dilutive effect of Equity Units		—		0.4
Net Income Available to Common Shareholders - Diluted		$	344.0	$	319.4
Denominator:
Average common shares outstanding - Basic		447.9		412.8
Dilutive potential common shares:
Equity Units purchase contracts		—		31.2
Equity Units purchase contract payment balance		—		1.8
Shares contingently issuable under employee stock plans		0.9		0.8
Shares restricted under employee stock plans		0.4		0.5
ATM forward agreement		0.2		—
Average Common Shares - Diluted		449.4		447.1
Earnings per common share:
Basic		0.77		0.77
Diluted		0.77		0.71

6. Equity

ATM Program. On February 22, 2024, we entered into eight separate equity distribution agreements pursuant to which we are able to sell up to an aggregate of ~~Virginia completed~~$900.0 million of our common stock. On February 23, 2024, under the ATM program, we executed a forward sale agreement, which allows us to issue a fixed number of shares at a price to be settled in the future. On February 23, 2024, the forward purchaser under our forward sale agreement borrowed 7,757,951 shares from third parties, which the forward purchaser sold, through its ~~refund~~affiliated agent, at a weighted average price of $25.78 per share. We may settle the forward sale agreement in shares, cash or net shares by December 20, 2024. Had we settled all the shares under the forward sale agreement at March 31, 2024, we would have received approximately $199.8 million, based on a net price of $25.76 per share. As of March 31, 2024, the ATM program (inclusive of the ~~difference between the interim customer rates implemented in 2016 and the rates approved by the final order.~~forward sale agreement) had approximately $700.0 million of equity available for issuance. The program expires on December 31, 2025.

~~Columbia of Maryland.~~On April 14, 2017, Columbia of Maryland filed a request with the MPSC to adjust base rates. On July 28, 2017, all parties filed a settlement agreement with the MPSC, under which Columbia of Maryland will receive an annual revenue increase of $2.4 million. The MPSC approved the settlement on September 19, 2017 and rates went into effect on October 27, 2017.

~~Electric Operations Regulatory Matters~~

~~Cost Recovery and Trackers~~Preferred Stock. ~~Comparability of Electric Operations line item operating results is impacted by regulatory trackers that allow~~Dividends declared per share for the ~~recovery in rates of certain costs such as those described below. Increases in~~Series A Preferred Stock were zero and $28.25 during the ~~expenses that are~~three months ended March 31, 2024 and 2023, respectively. Dividends declared per share for the ~~subject of trackers result in a corresponding increase in net revenues~~Series B Preferred Stock were $406.25 and ~~therefore have essentially no impact on total operating income results.~~$812.50 during the three months ended March 31, 2024 and 2023, respectively.

Certain operating costs of the Electric Operations are significant, recurring in nature, and generally outside the control of NIPSCO. The IURC allows for recovery of such costs through cost tracking mechanisms. Such tracking mechanisms allow for abbreviated regulatory proceedings in order for NIPSCO to implement charges and recover appropriate costs. Tracking mechanisms allow for more timely recovery of such costs as compared with more traditional cost recovery mechanisms. Examples of such mechanisms include electric energy efficiency programs, MISO non-fuel costs and revenues, resource capacity charges, federally mandated costs and environmental related costs.

A portion of NIPSCO's revenue is related to the recovery of fuel costs to generate power and the fuel costs related to purchased power. These costs are recovered through a FAC, a quarterly regulatory proceeding in Indiana.

NIPSCO has approval from the IURC to recover certain environmental related costs through an ECT. Under the ECT, NIPSCO is permitted to recover (1) AFUDC and a return on the capital investment expended by NIPSCO to implement environmental compliance plan projects and (2) related operation and maintenance and depreciation expenses once the environmental facilities become operational. On July 28, 2017, NIPSCO filed ECR-30 which included $256.2 million of cumulative net capital expenditures through the period ended June 30, 2017. An order was received from the IURC on October 25, 2017, and new rates went into effect the first billing cycle of November 2017.

NIPSCO made a TDSIC-2 rate adjustment mechanism filing on June 30, 2017 seeking recovery and ratemaking relief associated with $177.3 million of cumulative net capital expenditures made through April 30, 2017. An order approving the request was received from the IURC on October 31, 2017 and new rates are expected to go into effect with the first billing cycle of November 2017.

On ~~November 1, 2016, NIPSCO filed~~June 15, 2023, we redeemed all 400,000 outstanding shares of Series A Preferred Stock for a petition with the IURC for relief regarding the construction of additional environmental projects required to comply with the final rules for regulation of CCRs and the ELG. On June 9, 2017, a settlement agreement was filed with the IURC regarding the CCR projects and treatment of associated costs. An evidentiary hearing was held on August 21, 2017 and an order is expected by the end of 2017. Given the current postponement of the ELG rule, NIPSCO has agreed, with the settling parties, that the ELG projects and related costs would be addressed in a later proceeding. Refer to Note 14-C, “Environmental Matters,” for more information.

~~6. Risk Management Activities~~

NiSource is exposed to certain risks relating to its ongoing business operations, namely commodity price risk and interest rate risk. NiSource recognizes that the prudent and selective use of derivatives may help to lower its cost of debt capital, manage its interest rate exposure and limit volatility in theredemption price of ~~natural gas.~~$1,000 per share or $400.0 million in total.

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Series B and B-1 Preferred Stock. On March 15, 2024, we redeemed all 20,000 outstanding shares of Series B Preferred Stock for a redemption price of $25,000 per share and all 20,000 outstanding shares of Series B-1 Preferred Stock for a redemption price of $0.01 per share or $500.0 million in total. Following the redemption, dividends ceased to accrue on the shares of Series B Preferred Stock, shares of the Series B Preferred Stock and Series B-1 Preferred Stock were no longer deemed outstanding and all rights of the holders of such shares of Series B Preferred Stock and Series B-1 Preferred Stock terminated. In conjunction with the redemption, we recorded a $14.0 million preferred stock redemption premium, calculated as the difference between the carrying value on the redemption date of the Series B Preferred Stock and Series B-1 Preferred Stock and the total amount of consideration paid to redeem, which was recorded as a reduction to retained earnings during the first quarter of 2024. We did not recognize an excise tax liability under the IRA in connection with this redemption as we expect to issue common stock under the ATM program in 2024 in excess of the fair value of the Series B Preferred Stock and Series B-1 Preferred Stock redeemed.

In March 2024, we filed a Certificate of Elimination to our Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware to eliminate from the Amended and Restated Certificate of Incorporation all matters set forth in the Certificate of Designations with respect to the Series B Preferred Stock and the Certificate of Designations with respect to the Series B-1 Preferred Stock. As a result, the 20,000 shares that were previously designated as Series B Preferred Stock and the 20,000 shares that were previously designated as Series B-1 Preferred Stock were returned to the status of authorized but unissued shares of preferred stock, par value $0.01 per share, without designation as to series. The Certificate of Elimination does not change the total number of authorized shares of capital stock of NiSource or the total number of authorized shares of preferred stock. We voluntarily delisted the preferred stock from the New York Stock Exchange.

Equity Units. On December 1, 2023, we issued 33,898,837 shares of our common stock under the purchase contract component of the Corporate Units. As of December 1, 2023, each holder of Corporate Units was deemed to have automatically delivered to us the related Series C Mandatory Convertible Preferred Stock that were components of the Corporate Units in full satisfaction of such holder’s obligations under the related purchase contract, and all shares of Series C Mandatory Convertible Preferred Stock were returned to the status of authorized but unissued preferred stock, par value of $0.01 per share, without designation as to series. We voluntarily delisted the Corporate Units from the New York Stock Exchange.

Refer to Note 5, "Earnings Per Share," for additional information regarding our treatment of the Equity Units for diluted EPS during 2023.

7. Short-Term Borrowings

We generate short-term borrowings from our revolving credit facility, commercial paper program, accounts receivable transfer programs, and term credit agreements. Each of these borrowing sources is described further below.

Revolving Credit Facility. We maintain a revolving credit facility to fund ongoing working capital requirements, including the provision of liquidity support for our commercial paper program, provide for issuance of letters of credit and also for general corporate purposes. Our revolving credit facility has a program limit of $1.85 billion and is comprised of a syndicate of banks. We had no outstanding borrowings under this facility as of March 31, 2024 and December 31, 2023.

Commercial Paper Program. On February 9, 2024 we increased our commercial paper program limit from $1.50 billion to $1.85 billion. We had $1,222.3 million and $1,061.0 million of commercial paper outstanding with weighted-average interest rates of 5.58% and 5.65% as of March 31, 2024 and December 31, 2023, respectively.

Accounts Receivable Transfer Programs. Columbia of Ohio, NIPSCO, and Columbia of Pennsylvania each maintain a receivables agreement whereby they transfer their customer accounts receivables to third-party financial institutions through consolidated special purpose entities. The three agreements expire between June 2024 and October 2024 and may be further extended if mutually agreed to by the parties thereto.

All receivables transferred to third parties are valued at face value, which approximates fair value due to their short-term nature. The amount of the undivided percentage ownership interest in the accounts receivables transferred is determined in part by required loss reserves under the agreements.

Transfers of accounts receivable are accounted for as secured borrowings resulting in the recognition of short-term borrowings on the Condensed Consolidated Balance Sheets (unaudited). As of March 31, 2024, the maximum amount of debt that could be borrowed related to our accounts receivable programs was $419.8 million.

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

We had zero and $337.6 million of short-term borrowings related to the securitization transactions as of March 31, 2024 and December 31, 2023, respectively.

For the three months ended March 31, 2024 and 2023, $337.6 million and $65.4 million, respectively were recorded as cash flows used for financing activities related to the change in short-term borrowings due to securitization transactions. For the accounts receivable transfer programs, we pay used facility fees for amounts borrowed, unused commitment fees for amounts not borrowed, and upfront renewal fees. Fees associated with the securitization transactions were $0.5 million and $0.9 million for the three months ended March 31, 2024 and 2023, respectively. Columbia of Ohio, NIPSCO and Columbia of Pennsylvania remain responsible for collecting on the receivables securitized, and the receivables cannot be transferred to another party.

Term Credit Agreements. At December 31, 2023, we had $1.0 billion, and $650.0 million outstanding under term credit agreements with interest rates of 6.41% and 6.50%, respectively. On January 3, 2024, we terminated and repaid in full our $1.0 billion term credit agreement and our $650.0 million term credit agreement with proceeds from the NIPSCO Minority Interest Transaction.

Items listed above, excluding the term credit agreements, are presented net in the Condensed Statements of Consolidated Cash Flows (unaudited) as their maturities are less than 90 days.

8. Long-Term Debt

On March 14, 2024 we completed the issuance and sale of $650.0 million of 5.35% senior unsecured notes maturing in 2034, which resulted in approximately $642.6 million of net proceeds after discount and debt issuance costs.

9. Gas in Storage

We use both the LIFO inventory methodology and the weighted-average cost methodology to value natural gas in storage. Natural gas storage injections are priced at the average of the costs of natural gas supply purchased during the year. For interim periods, the difference in the cost of replacing the current portion of stored gas inventory compared to the amount stated on a LIFO basis is recorded within the Condensed Consolidated Balance Sheets (unaudited). Due to seasonality requirements, we expect interim variances in LIFO layers to be replenished by year end. The LIFO basis exceeded the cost of replacing the current portion of stored gas by $27.5 million and zero respectively, for the periods ended March 31, 2024 and December 31, 2023, for certain gas distribution companies recorded within "Prepayments and other" on the Condensed Consolidated Balance Sheets (unaudited).

10. Regulatory Matters

Renewable generation filings

In March 2024, NIPSCO filed a petition with the IURC to, after notice and hearing, issue an order modifying its November 22, 2023 order to approve direct ownership of the Gibson Project. The hearing is scheduled for June 2024 with a final order expected August 2024. In March 2024, NIPSCO also filed a petition with the IURC to, after notice and hearing, issue an order modifying its June 29, 2021 order to approve direct ownership of the Fairbanks Project. The hearing is scheduled for July 2024 with a final order expected September of 2024.

WAM system filing

In March 2024, NIPSCO filed a petition with the IURC for authority to defer, as a regulatory asset, certain costs, including depreciation and amortization incurred in connection with improvements to its information technology systems through the design, development, and implementation of a new WAM program for the scheduling, dispatch, and execution of work and the management of underlying assets. These improvements are part of our enterprise-wide transformation roadmap which seeks to optimize our field work. The petition also included the confirmation that the WAM program assets, including the requested regulatory assets, will be included in NIPSCO's rate base for ratemaking purposes in rate cases after the WAM assets have been placed in service. The hearing is scheduled for July 2024 with a final order expected in August 2024.

Regulatory deferral related to renewable energy investments

In accordance with the accounting principles of ASC 980, we recognize a regulatory liability or asset for amounts representing the timing difference between the profit earned from the JVs and the amount included in regulated rates to recover our approved investments in consolidated JVs. The amounts recorded in income will ultimately reflect the amount allowed in regulated rates to recover our investments over the useful life of the projects. The offset to the regulatory liability or asset associated with our renewable investments included in regulated rates is recorded in "Depreciation and amortization" on the Condensed Statements

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

of Consolidated Income (unaudited). NiSource recorded an increase to depreciation expense of $3.5 million and a decrease to depreciation expense of $4.4 million for the three months ended March 31, 2024 and 2023, respectively. Following the implementation of the electric base rate case, we began recognizing amounts to recover our investments of projects that have been placed in service. Refer to Note 4, "Noncontrolling Interests," for additional information.

11. Risk Management Activities

We are exposed to certain risks relating to our ongoing business operations; namely commodity price risk and interest rate risk. We recognize that the prudent and selective use of derivatives may help to lower our cost of debt capital, manage our interest rate exposure and limit volatility in the price of natural gas.

Risk management assets and liabilities on ~~NiSource’s~~our derivatives are presented on the Condensed Consolidated Balance Sheets (unaudited) as shown below:


	March 31, 2024				December 31, 2023
(in millions)	Assets		Liabilities		Assets		Liabilities
Current(1)

Derivatives not designated as hedging instruments	$	3.0	$	11.6	$	1.1	$	7.5
Total	$	3.0	$	11.6	$	1.1	$	7.5
Noncurrent(2)

Derivatives not designated as hedging instruments	$	20.2	$	1.9	$	22.2	$	1.9
Total	$	20.2	$	1.9	$	22.2	$	1.9

(in millions) September 30, 2017 December 31, 2016
Risk Management Assets - Current⁽¹⁾

Interest rate risk programs $ —
$ 17.0
Commodity price risk programs 0.2
7.4
Total $ 0.2
$ 24.4
Risk Management Assets - Noncurrent⁽²⁾

Interest rate risk programs $ 20.1
$ 17.1
Commodity price risk programs 0.7
7.5
Total $ 20.8
$ 24.6
Risk Management Liabilities - Current⁽³⁾

Interest rate risk programs $ 36.9
$ 15.3
Commodity price risk programs 3.3
1.5
Total $ 40.2
$ 16.8
Risk Management Liabilities - Noncurrent
Interest rate risk programs $ —
$ 24.5
Commodity price risk programs 28.7
20.0
Total $ 28.7
$ 44.5

⁽¹⁾~~Presented~~Currentassets and liabilities are presented in "Prepayments and other" and "Other accruals", respectively, on the Condensed Consolidated Balance Sheets (unaudited).

⁽²⁾~~Presented~~Noncurrentassets and liabilities are presented in "Deferred charges and other" and "Other noncurrent liabilities and deferred credits", respectively, on the Condensed Consolidated Balance Sheets (unaudited).

⁽³⁾~~Presented in "Other accruals"~~Our derivative instruments aresubject to enforceable master netting arrangements or similar agreements. No collateral was either received or posted related to our outstanding derivative positions at March 31, 2024. If the above gross asset and liability positions were presented net of amounts owed or receivable from counterparties, we would report a net asset position of $9.7 million and $13.9 million at March 31, 2024 and December 31, 2023, respectively.

All gains and losses on ~~the Condensed Consolidated Balance Sheets (unaudited).~~derivative contracts are deferred as regulatory liabilities or assets and are remitted to or collected from customers through NIPSCO's and Columbia of Pennsylvania's quarterly GCA mechanisms.

Derivatives Not Designated as Hedging Instruments

Commodity ~~Price Risk Management~~

~~NiSource and NiSource’s~~price risk management. We, along with our utility customers, are exposed to variability in cash flows associated with natural gas purchases and volatility in natural gas prices. ~~NiSource purchases~~We purchase natural gas for sale and delivery to ~~its~~our retail, commercial and industrial customers, and for most customers the variability in the market price of gas is passed through in their rates. Some of ~~NiSource’s~~our utility subsidiaries offer programs whereby variability in the market price of gas is assumed by the respective utility. The objective of ~~NiSource’s~~our commodity price risk programs is to mitigate the gas cost variability ~~for NiSource or~~ on behalf of ~~its~~our customers, associated with natural gas purchases or sales by economically hedging the various gas cost components using a combination of futures, options, forwards or other derivative contracts. At March 31, 2024 and December 31, 2023, we had 86.0 MMDth and 76.1 MMDth, respectively, of net energy derivative volumes outstanding related to our natural gas hedges.

NIPSCO has received IURC approval to lock in a fixed price for its natural gas customers using long-term forward purchase ~~instruments. The term of these~~ instruments ~~may range from five to ten years~~ and is limited to ~~ten percent~~20% of ~~NIPSCO’s~~NIPSCO's average annual GCA purchase volume. ~~Gains~~As of March 31, 2024, the remaining terms of these instruments range from one to three years. Likewise, Columbia of Pennsylvania has received approval for a 24-month rolling hedge program. The hedging program was executed in December 2023, with an effective date of April 1, 2024 and will continue in perpetuity. The program is designed to financially hedge approximately 20% of the customer’s annual demand. All gains and losses on these derivative contracts are deferred as regulatory liabilities or assets and are remitted to or collected from customers through ~~NIPSCO’s quarterly GCA~~the relevant cost recovery mechanism. ~~These instruments are not designated as accounting hedges.~~

~~Interest Rate Risk Management~~

As of September 30, 2017, NiSource Finance has forward-starting interest rate swaps with an aggregate notional value totaling $1.0 billion to hedge the variability in cash flows attributable to changes in the benchmark interest rate during the periods from the effective dates of the swaps to the anticipated dates of forecasted debt issuances, which are expected to take place by the end of 2019. These interest rate swaps are designated as cash flow hedges. The effective portions of the gains and losses related to these swaps are recorded to AOCI and are recognized in earnings concurrently with the recognition of interest expense on the associated debt, once issued. If it becomes probable that a hedged forecasted transaction will no longer occur, the accumulated gains or losses on the derivative will be recognized currently in earnings.

On May 11, 2017, NiSource Finance settled $950.0 million of forward-starting interest rate swap agreements contemporaneously with the issuance of $2.0 billion of 3.49% and 4.375% senior notes, maturing in 2027 and 2047, respectively. These derivative

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

~~contracts were accounted for as cash flow hedges. As part of~~The following table summarizes the ~~transaction, the~~gains and losses associated ~~net unrealized loss position of $6.9 million is being amortized from accumulated other comprehensive loss into interest expense over the term of the associated interest payments.~~

~~On September 5, 2017, NiSource Finance settled $750.0 million of treasury lock agreements, initially entered into August 2017, contemporaneously~~ with the ~~issuance~~commodity price risk programs deferred as regulatory assets and liabilities:


(in millions)	March 31, 2024		December 31, 2023
Regulatory Assets
Losses on commodity price risk programs	$	20.1	$	24.4
Regulatory Liabilities
Gains on commodity price risk programs	23.3		23.3

Our derivative instruments measured at fair value as of ~~$750.0 million~~March 31, 2024 and December 31, 2023 do not contain any credit-risk-related contingent features.

Derivatives Designated as Hedging Instruments
Interest rate risk management. As of ~~3.95% senior notes, maturing in 2048. This derivative contract was accounted for as cash flow hedge. As part of the transaction, the associated~~March 31, 2024 and December 31, 2023 we had no active interest rate swap positions. The overall net ~~unrealized loss position of $19.0 million is being amortized from accumulated other comprehensive loss into interest expense over the term of the associated interest payments.~~

~~Cash associated with payments~~gain related to ~~settle~~our multiple settled interest rate swaps ~~and treasury lock agreements~~is recorded in AOCI. We amortize the net gain over the life of the debt associated with these swaps as we recognize interest expense. These amounts are ~~reflected within operating activities within the Condensed Statements of Consolidated Cash Flows (unaudited)~~immaterial for the ~~nine~~three months ended ~~September 30, 2017.~~

~~Realized gains~~March 31, 2024 and ~~losses from NiSource’s interest rate cash flow hedges~~2023 and are ~~presented~~recorded in ~~“Interest~~"Interest expense, ~~net”~~net" on the Condensed Statements of Consolidated Income (unaudited). ~~There were no amounts excluded from effectiveness testing~~Amounts expected to be reclassified to earnings during the next twelve months are immaterial. See Note 16, "Accumulated Other Comprehensive Loss," for ~~derivatives in cash flow hedging relationships at September 30, 2017 and December 31, 2016.~~additional information.

~~NiSource’s derivative instruments measured at fair value as~~

Table of ~~September 30, 2017 and December 31, 2016 do not contain any credit-risk-related contingent features.~~Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

7.NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

12. Fair Value

A. Fair Value Measurements

Recurring Fair Value ~~Measurements.~~Measurements

The following tables present financial assets and liabilities measured and recorded at fair value on ~~NiSource’s~~our Condensed Consolidated Balance Sheets (unaudited) on a recurring basis and their level within the fair value hierarchy as of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016~~:2023:


Recurring Fair Value Measurements March 31, 2024 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of March 31, 2024
Assets

Risk management assets	$	—	$	23.2	$	—	$	23.2

Available-for-sale debt securities	—		150.1		—		150.1
Total	$	—	$	173.3	$	—	$	173.3
Liabilities

Risk management liabilities	$	—	$	13.5	$	—	$	13.5
Total	$	—	$	13.5	$	—	$	13.5


Recurring Fair Value Measurements December 31, 2023 (in millions)									Recurring Fair Value Measurements December 31, 2023 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Balance as of December 31, 2023
Assets

Recurring Fair Value Measurements September 30, 2017 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of September 30, 2017
Assets
Risk management assets	$	—	$	21.0	$	—	$	21.0
Available-for-sale securities	—		139.3		—		139.3

Risk management assets

Risk management assets

Available-for-sale debt securities

Available-for-sale debt securities

Available-for-sale debt securities
Total	$	—	$	160.3	$	—	$	160.3
Liabilities

Risk management liabilities

Risk management liabilities

Risk management liabilities	$	—	$	68.1	$	0.8	$	68.9
Total	$	—	$	68.1	$	0.8	$	68.9

~~Table of Contents~~

~~ITEM 1. FINANCIAL STATEMENTS (continued)~~

~~NiSource Inc.~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (continued)~~

Recurring Fair Value Measurements
December 31, 2016 (in millions)
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Balance as of
December 31, 2016
Assets
Risk management assets $ 5.4
$ 43.6
$ —
$ 49.0
Available-for-sale securities —
131.5
—
131.5
Total $ 5.4
$ 175.1
$ —
$ 180.5
Liabilities
Risk management liabilities $ 1.2
$ 58.9
$ 1.2
$ 61.3
Total $ 1.2
$ 58.9
$ 1.2
$ 61.3

Risk Management Assets and Liabilities. Risk management assets and liabilities include ~~interest rate swaps, treasury lock agreements,~~ exchange-traded NYMEX futures and NYMEX options and non-exchange-based forward purchase contracts. ~~Exchange-traded~~

Level 1- When utilized, exchange-traded derivative contracts are based on unadjusted quoted prices in active markets and are classified within Level 1. These financial assets and liabilities are secured with cash on deposit with the exchange; therefore, nonperformance risk has not been incorporated into these valuations. These financial assets and liabilities are deemed to be cleared and settled daily by NYMEX as the related cash collateral is posted with the exchange. As a result of this exchange rule, NYMEX derivatives are considered to have no fair value at the balance sheet date for financial reporting purposes, and are presented in Level 1 net of posted cash; however, the derivatives remain outstanding and are subject to future commodity price fluctuations until they are settled in accordance with their contractual terms.

Level 2- Certain non-exchange-traded derivatives are valued using broker or over-the-counter, on-line exchanges. In such cases, these non-exchange-traded derivatives are classified within Level 2. Non-exchange-based derivative instruments include swaps, forwards, ~~options~~ and ~~treasury lock agreements.~~options. In certain instances, these instruments may utilize models to measure fair value. ~~NiSource uses~~We use a similar model to value similar instruments. Valuation models utilize various inputs that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, other observable inputs for the asset or liability and market-corroborated inputs, (i.e., inputs derived principally from or corroborated by observable market data by correlation or other means). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized within Level 2.

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Level 3- Certain derivatives trade in less active markets with a lower availability of pricing information and models may be utilized in the valuation. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized within Level 3.

Credit risk is considered in the fair value calculation of derivative instruments that are not exchange-traded. Credit exposures are adjusted to reflect collateral agreements ~~which~~that reduce exposures. As of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016~~,2023, there were no material transfers between fair value hierarchies. Additionally, there were no changes in the method or significant assumptions used to estimate the fair value of ~~NiSource’s~~our financial instruments.

NiSource Finance has entered into forward-starting interest rate swaps and treasury lock agreements to hedge the interest rate risk on coupon payments of forecasted issuances of long-term debt. These derivatives are designated as cash flow hedges. Credit risk is considered in the fair value calculation of each agreement. As they are based on observable data and valuations of similar instruments, the hedges are categorized within Level 2 of the fair value hierarchy. There was no exchange of premium at the initial date of the swaps and treasury lock agreements, and NiSource can settle the contracts at any time. For additional information see Note 6, "Risk Management Activities."

NIPSCO ~~has~~and Columbia of Pennsylvania have entered into long-term forward natural gas purchase instruments ~~that range from five to ten years~~ to lock in a fixed price for ~~its~~ natural gas customers. ~~NiSource values~~We value these contracts using a pricing model that incorporates market-based information when available, as these instruments trade less frequently and are classified within Level 2 of the fair value hierarchy. For additional information, see Note ~~6, “Risk~~11, "Risk Management Activities.”"

Available-for-Sale Debt Securities. Available-for-sale debt securities are investments pledged as collateral for trust accounts related to ~~NiSource’s wholly-owned~~our wholly owned insurance company. ~~Available-for-sale securities are included within “Other investments” in the Condensed Consolidated Balance Sheets (unaudited). NiSource values~~We value U.S. Treasury, corporate debt and mortgage-backed securities using a matrix pricing model that incorporates market-based information. These securities trade less frequently and are classified within Level 2. ~~Total~~

Our available-for-sale debt securities impairments are recognized periodically using an allowance approach. At each reporting date, we utilize a quantitative and qualitative review process to assess the impairment of available-for-sale debt securities at the individual security level. For securities in a loss position, we evaluate our intent to sell or whether it is more-likely-than-not that we will be required to sell the security prior to the recovery of its amortized cost. If either criteria is met, the loss is recognized in earnings immediately, with the offsetting entry to the carrying value of the security. If both criteria are not met, we perform an analysis to determine whether the unrealized ~~gains~~loss is related to credit factors. The analysis focuses on a variety of factors that include, but are not limited to, downgrade on ratings of the security, defaults in the current reporting period or projected defaults in the future, the security's yield spread over treasuries, and ~~losses from available-for-sale securities are~~other relevant market data. If the unrealized loss is not related to credit factors, it is included in other comprehensive income. If the unrealized loss is related to credit factors, the loss is recognized as credit loss expense in earnings during the period, with an offsetting entry to the allowance for credit losses. The amount of the credit loss recorded to the allowance account is limited by the amount at which the security's fair value is less than its amortized cost basis. If certain amounts recorded in the allowance for credit losses are deemed uncollectible, the allowance on the uncollectible portion will be charged off, with an offsetting entry to the carrying value of the security. Subsequent improvements to the estimated credit losses of available-for-sale debt securities will be recognized immediately in earnings. As of March 31, 2024 and December 31, 2023, we have $0.4 million and $0.6 million, respectively, recorded as an allowance for credit losses on available-for-sale debt securities as a result of the analysis described above. Continuous credit monitoring and portfolio credit balancing mitigates our risk of credit losses on our available-for-sale debt securities.

~~Table of Contents~~

~~ITEM 1. FINANCIAL STATEMENTS (continued)~~

~~NiSource Inc.~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (continued)~~

The amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value of available-for-sale securities at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016~~2023 were:


March 31, 2024 (in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses(1)		Allowance for Credit Losses		Fair Value
Available-for-sale debt securities
U.S. Treasury debt securities	$	62.1	$	—	$	(3.3)	$	—	$	58.8
Corporate/Other debt securities	98.1		0.6		(7.0)		(0.4)		91.3
Total	$	160.2	$	0.6	$	(10.3)	$	(0.4)	$	150.1

December 31, 2023 (in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses(2)		Allowance for Credit Losses		Fair Value
Available-for-sale debt securities
U.S. Treasury debt securities	$	63.8	$	—	$	(3.2)	$	—	$	60.6
Corporate/Other debt securities	105.2		0.8		(6.9)		(0.6)		98.5
Total	$	169.0	$	0.8	$	(10.1)	$	(0.6)	$	159.1

September 30, 2017 (in millions)
Amortized
Cost
Gross Unrealized Gains Gross Unrealized Losses
Fair
Value
Available-for-sale securities
U.S. Treasury debt securities $ 34.3
$ —
$ (0.1 ) $ 34.2
Corporate/Other debt securities 104.2
1.3
(0.4 ) 105.1
Total $ 138.5
$ 1.3
$ (0.5 ) $ 139.3
December 31, 2016 (in millions)
Amortized
Cost
Gross Unrealized Gains Gross Unrealized Losses
Fair
Value
Available-for-sale securities
U.S. Treasury debt securities $ 35.0
$ 0.1
$ (0.6 ) $ 34.5
Corporate/Other debt securities 98.7
0.3
(2.0 ) 97.0
Total $ 133.7
$ 0.4
$ (2.6 ) $ 131.5
(1)Fair value of U.S. Treasury debt securities and Corporate/Other debt securities in an unrealized loss position without an allowance for credit losses is $58.8 million and $72.7 million, respectively, at March 31, 2024.

~~Realized gains~~(2)Fair value of U.S. Treasury debt securities and Corporate/Other debt securities in an unrealized loss position without an allowance for credit losses ~~on available-for-sale securities were immaterial for the three~~is $58.7 million and ~~nine months ended September 30, 2017 and 2016.~~$74.8 million, respectively, at December 31, 2023.

The cost of maturities sold is based upon specific identification. ~~At September 30, 2017, approximately $8.4~~Realized gains and losses on available-for-sale securities were $0.4 million ~~of U.S. Treasury debt securities~~ and ~~approximately $3.2 million of Corporate/Other debt securities have maturities of less than a year.~~immaterial for the three months ended March 31, 2024 and 2023, respectively.

Non-recurring Fair Value Measurements

~~There are no material items in~~We measure the fair value ~~reconciliation~~ of ~~Level 3~~certain assets, ~~and liabilities measured at fair value~~primarily goodwill, on a ~~recurring~~non-recurring basis, ~~for~~typically when events or changes in circumstances indicate that the ~~three and nine months ended September 30, 2017 and 2016.~~carrying amount of the assets may not be recoverable.

~~Non-recurring Fair Value Measurements.~~ ~~There were no significant non-recurring fair value measurements recorded during the three and nine months ended September 30, 2017.~~

B. Other Fair Value Disclosures for Financial Instruments. The carrying amount of cash and cash equivalents, restricted cash, notes receivable, customer deposits and short-term borrowings is a reasonable estimate of fair value due to their liquid or short-term nature. ~~NiSource’s~~Our long-term borrowings are recorded at historical amounts.

The following method and assumptions were used to estimate the fair value of each class of financial instruments.

Long-term Debt. The fair value of outstanding long-term debt is estimated based on the quoted market prices for the same or similar securities. Certain premium costs associated with the early settlement of long-term debt are not taken into consideration in determining fair value. These fair value measurements are classified within Level 2 of the fair value hierarchy. ~~For the~~ ~~nine months endedSeptember 30, 2017~~,As of March 31, 2024, there was no change in the method or significant assumptions used to estimate the fair value of long-term debt.

The carrying amount and estimated fair values of these financial instruments were as follows:


(in millions)	Carrying Amount as of March 31, 2024		Estimated Fair Value as of March 31, 2024		Carrying Amount as of Dec. 31, 2023		Estimated Fair Value as of Dec. 31, 2023
Long-term debt (including current portion)	$	11,748.6	$	10,852.3	$	11,079.3	$	10,370.9

(in millions) Carrying
Amount as of
September 30, 2017 Estimated Fair
Value as of
September 30, 2017
Carrying
Amount as of
Dec. 31, 2016

Estimated Fair
Value as of
Dec. 31, 2016
Long-term debt (including current portion) $ 7,808.4
$ 8,550.7
$ 6,421.3
$ 7,064.1

~~8. Transfers of Financial Assets~~

Columbia of Ohio, NIPSCO and Columbia of Pennsylvania each maintain a receivables agreement whereby they transfer their customer accounts receivables to third party financial institutions through wholly-owned and consolidated special purpose entities. The three agreements expire between March 2018 and October 2018 and may be further extended if mutually agreed to by the parties thereto.

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Transfers of accounts receivable are accounted for as secured borrowings resulting in the recognition of short-term borrowings on the Condensed Consolidated Balance Sheets (unaudited). As of September 30, 2017, the maximum amount of debt that could be recognized related to NiSource’s accounts receivable programs is $265.0 million.

The following table reflects the gross receivables balance and net receivables transferred as well as short-term borrowings related to the securitization transactions as of September 30, 2017 and December 31, 2016:

(in millions) September 30, 2017 December 31, 2016
Gross Receivables $ 371.6
$ 618.3
Less: Receivables not transferred 109.4
308.3
Net receivables transferred $ 262.2
$ 310.0
Short-term debt due to asset securitization $ 262.2
$ 310.0

For the nine months ended September 30, 2017 and 2016, $47.8 million and $11.0 million, respectively, was recorded as cash flows used for financing activities related to the change in short-term borrowings due to securitization transactions. Fees associated with the securitization transactions were $0.6 million and $0.4 million for the three months ended September 30, 2017 and 2016, respectively, and $1.9 million and $1.6 million for the nine months ended September 30, 2017 and 2016, respectively. NiSource remains responsible for collecting on the receivables securitized and the receivables cannot be transferred to another party.

9.~~Goodwill~~

~~The following presents NiSource’s goodwill balance allocated by segment as of September 30, 2017:~~

(in millions) Gas Distribution Operations Electric Operations Corporate and Other Total
Goodwill $ 1,690.7
$ —
$ —
$ 1,690.7

NiSource applied the qualitative "step 0" analysis to its reporting units for the annual impairment test performed as of May 1, 2017. For this test, NiSource assessed various assumptions, events and circumstances that would have affected the estimated fair value of the reporting units as compared to its base line May 1, 2016 "step 1" fair value measurement. The results of this assessment indicated that it was not more likely than not that its reporting unit fair values were less than the reporting unit carrying values, accordingly, no "step 1" analysis was required.

~~10.~~13. Income Taxes

~~NiSource’s~~Our interim effective tax rates reflect the estimated annual effective tax rates for ~~2017~~2024 and ~~2016,~~2023 applied to year-to-date pretax income, adjusted for tax expense associated with certain discrete items. The effective tax rates for the three months ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023 were ~~15.2%~~16.0% and ~~26.4%, respectively. The effective tax rate for the nine months ended September 30, 2017 and 2016 was 34.9% and 35.3%~~20.3%, respectively. These effective tax rates differ from the ~~Federal~~federal statutory tax rate of ~~35%~~21% primarily due to renewable partnership income, amortization of excess deferred federal income tax liabilities, as specified in the ~~effects of~~TCJA, tax credits, state ~~income taxes, utility ratemaking,~~flow through, and other permanent book-to-tax differences.

The decrease in the three month effective tax rate of 4.3% in ~~2017 versus the same period in 2016~~2024 compared to 2023 is primarily ~~due~~attributed to ~~current year revisions~~the lower renewable partnership income, jurisdictional mix of ~~apportionment factors used to measure state~~pre-tax book income, offset by lower amortization of excess deferred federal income tax liabilities. ~~There was no material change in the year-to-date effective tax rate in 2017 versus the same period in 2016.~~

~~Additionally,~~As of March 31, 2024, there ~~were~~have been no material changes ~~recorded in 2017~~ to ~~NiSource's uncertain~~our unrecognized tax ~~positions as of December 31, 2016.~~

~~Table of Contents~~

~~ITEM 1. FINANCIAL STATEMENTS (continued)~~

~~NiSource Inc.~~

~~Notes~~benefits or possible changes that could reasonably be expected to ~~Condensed~~occur during the next twelve months. See Note 15 to the Company’s Consolidated Financial Statements ~~(unaudited) (continued)~~

in the Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of these unrecognized tax benefits.

~~11.~~14. Pension and Other ~~Postretirement~~Postemployment Benefits

~~NiSource provides~~We provide defined contribution plans and noncontributory defined benefit retirement plans that cover certain of ~~its~~our employees. Benefits under the defined benefit retirement plans reflect the ~~employees’~~employees' compensation, years of service and age at retirement. Additionally, ~~NiSource provides~~we provide health care and life insurance benefits for certain retired employees. The majority of employees may become eligible for these benefits if they reach retirement age while working for ~~NiSource.~~us. The expected cost of such benefits is accrued during the ~~employees’~~employees' years of service. We determined that, for certain rate-regulated subsidiaries, the future recovery of postretirement benefit costs is probable, and we record regulatory assets and liabilities for amounts that would otherwise have been recorded to expense or accumulated other comprehensive loss. Current rates of rate-regulated companies include postretirement benefit costs, including amortization of the regulatory assets and liabilities that arose prior to inclusion of these costs in rates. For most plans, cash contributions are remitted to grantor trusts.

~~NiSource previously disclosed in~~For the ~~notes~~three months ended March 31, 2024 and 2023, we contributed $0.7 million and $1.2 million, respectively to ~~its financial statements for the year ended December 31, 2016, that it expected to contribute $9.1 million to its~~our pension plans ~~in 2017. For the nine months ended September 30, 2017, NiSource contributed $281.6~~and $5.4 million and $5.6 million, respectively to its pension plans, which included a $277 million discretionary contribution made during the third quarter of 2017. NiSource does not anticipate any further pension contributions in 2017. Contributions of $21.8 million have been made to NiSource's other postretirement benefit plans during the nine months ended September 30, 2017. Contributions made to pension and other postretirement benefit plans are presented in "Operating activities" on the Condensed Statements of Consolidated Cash Flows (unaudited).

our OPEB plans.

The following ~~tables provide~~table provides the components of the ~~plans’~~plans' actuarially determined net periodic benefit cost for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2024 and ~~2016:~~2023:

Pension Benefits
Other Postretirement
Benefits
Three Months Ended September 30, (in millions)
2017 2016 2017 2016
Components of Net Periodic Benefit Cost
Service cost⁽¹⁾
$ 7.4
$ 7.7
$ 1.2
$ 1.3
Interest cost⁽¹⁾
17.1
22.4
4.5
5.5
Expected return on assets (30.8 ) (33.2 ) (4.0 ) (4.3 )
Amortization of prior service credit (0.1 ) —
(1.1 ) (1.2 )
Recognized actuarial loss 13.2
15.3
0.7
0.8
Settlement loss 10.6
—
—
—
Total Net Periodic Benefit Cost $ 17.4
$ 12.2
$ 1.3
$ 2.1

⁽¹⁾Effective January 1, 2017, NiSource adopted the methodology of using a full yield curve (spot rate) approach to estimate the service and interest components of net periodic benefit cost. This change in accounting estimate resulted in a decrease in these costs for the three months ended September 30, 2017 when compared to the same period in 2016.

Pension Benefits
Other Postretirement
Benefits
Nine Months Ended September 30, (in millions)
2017 2016 2017 2016
Components of Net Periodic Benefit Cost
Service cost⁽¹⁾
$ 22.4
$ 23.1
$ 3.6
$ 3.7
Interest cost⁽¹⁾
51.5
67.2
13.4
16.5
Expected return on assets (91.3 ) (99.6 ) (11.9 ) (12.9 )
Amortization of prior service credit (0.5 ) (0.2 ) (3.3 ) (3.6 )
Recognized actuarial loss 40.0
45.9
2.2
2.4
Settlement loss 10.6
—
—
—
Total Net Periodic Benefit Cost $ 32.7
$ 36.4
$ 4.0
$ 6.1














	Pension Benefits				OPEB
Three Months Ended March 31, (in millions)	2024		2023		2024		2023
Components of Net Periodic Benefit Cost(1)
Service cost	$	5.4	$	5.1	$	1.3	$	1.3
Interest cost	16.3		17.1		5.4		5.4
Expected return on assets	(23.8)		(23.6)		(4.0)		(3.8)
Amortization of prior service credit	—		—		(0.4)		(0.5)
Recognized actuarial loss	7.2		8.4		0.8		0.8

Total Net Periodic Benefit Cost	$	5.1	$	7.0	$	3.1	$	3.2
(1)The service cost component and all non-service cost components of net periodic benefit (income) cost are presented in "Operation and maintenance" and "Other, net," respectively, on the Condensed Statements of Consolidated Income (unaudited).

⁽¹⁾Effective January 1, 2017, NiSource adopted the methodology of using a full yield curve (spot rate) approach to estimate the service and interest components of net periodic benefit cost. This change in accounting estimate resulted in a decrease in these costs for the nine months ended September 30, 2017 when compared to the same period in 2016.

As of August 31, 2017, one of NiSource's qualified pension plans paid lump sums in excess of the plan's 2017 service cost plus interest cost, thereby meeting the requirement for settlement accounting. A settlement charge of $10.6 million was recorded during the third quarter of 2017. As a result of the settlement, the pension plan was remeasured resulting in a decrease to the pension benefit obligation, net of plan assets, of $1.3 million, a net decrease to regulatory assets of $10.6 million and a net credit to accumulated other comprehensive loss of $1.3 million.

~~Table of Contents~~

~~ITEM 1. FINANCIAL STATEMENTS (continued)~~

~~NiSource Inc.~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (continued)~~

The following table provides the key assumptions that were used to calculate the pension benefit obligation and the net periodic benefit cost at the measurement dates of August 31, 2017 and December 31, 2016.

August 31, 2017 December 31, 2016
Weighted-average Assumption to Determine Benefit Obligation:
Discount rate 3.50 % 4.03 %
Weighted-average Assumptions to Determine Net Periodic Benefit Costs for the period ended:
Discount rate - service cost⁽¹⁾
4.40 % 4.24 %
Discount rate - interest cost⁽¹⁾
3.31 % 4.24 %
Expected return on assets 7.25 % 8.00 %

⁽¹⁾ In January 2017, NiSource changed the method used to estimate the service and interest components of net periodic benefit cost for pension and other postretirement benefits. This change, compared to the previous method, resulted in a decrease in the actuarially-determined service and interest cost components. Historically, NiSource estimated service and interest cost utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. For fiscal 2017 and beyond, NiSource now utilizes a full yield curve approach to estimate these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

~~12. Long-Term Debt~~

NiSource Finance is a 100% owned, consolidated finance subsidiary of NiSource that engages in financing activities to raise funds for the business operations of NiSource and its subsidiaries. NiSource Finance was incorporated in March 2000 under the laws of the state of Indiana. Prior to 2000, the function of NiSource Finance was performed by Capital Markets. NiSource Finance obligations are fully and unconditionally guaranteed by NiSource. Consequently, no separate financial statements for NiSource Finance are required to be reported. No NiSource subsidiaries guarantee debt.

NiSource announced on April 26, 2017, that it intends to merge NiSource Finance and Capital Markets with and into NiSource during the second half of 2017, pending receipt of applicable approvals. The mergers are expected to be completed during the fourth quarter of 2017. Upon completion of the mergers, NiSource will become the primary obligor of NiSource Finance's and Capital Markets' outstanding obligations. The mergers are not expected to have any impact on NiSource's consolidated financial statements or the credit ratings of outstanding debt securities.

~~On March 27, 2017, Capital Markets redeemed $30.0 million of 7.86% and $2.0 million of 7.85% medium-term notes at maturity.~~

~~On April 3, 2017, Capital Markets redeemed $12.0 million of 7.82%, $10.0 million of 7.92%, $2.0 million of 7.93% and $1.0 million of 7.94% medium-term notes at maturity.~~

On May 22, 2017, NiSource Finance closed its placement of $2.0 billion in aggregate principal amount of its senior notes, comprised of $1.0 billion of 3.49% senior notes due 2027 and $1.0 billion of 4.375% senior notes due 2047. Related to this placement, NiSource settled $950.0 million of aggregate notional value forward-starting interest rate swaps, originally entered into to mitigate interest risk associated with the planned issuance of these notes. Refer to Note 6, "Risk Management Activities," for additional information.

During the second quarter of 2017, NiSource Finance executed a tender offer for $990.7 million of outstanding notes consisting of a combination of its 6.40% notes due 2018, 6.80% notes due 2019, 5.45% notes due 2020, and 6.125% notes due 2022. In conjunction with the debt retired, NiSource Finance recorded a $111.5 million loss on early extinguishment of long-term debt, primarily attributable to early redemption premiums.

~~On June 12, 2017, NIPSCO redeemed $22.5 million of 7.59% medium-term notes at maturity.~~

~~On July 1, 2017, NIPSCO redeemed $55.0 million of 5.70% medium-term notes at maturity.~~

~~On August 4, 2017, NIPSCO redeemed $5.0 million of 7.02% medium-term notes at maturity.~~

~~Table of Contents~~

~~ITEM 1. FINANCIAL STATEMENTS (continued)~~

~~NiSource Inc.~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (continued)~~

On September 14, 2017, NiSource Finance closed its placement of $750.0 million of 3.95% senior notes due 2048. Related to this placement, NiSource settled $750.0 million of aggregate notional value treasury lock agreements, originally entered into to mitigate the interest risk associated with the planned issuance of these notes. Refer to Note 6, "Risk Management Activities," for additional information.

~~On September 15, 2017, NiSource Finance redeemed $210.4 million of 5.25% senior unsecured notes at maturity.~~

~~13. Short-Term Borrowings~~

NiSource generates short-term borrowings from its revolving credit facility, commercial paper program, letter of credit issuances and accounts receivable transfer programs. Each of these borrowing sources is described further below.

NiSource Finance maintains a revolving credit facility to fund ongoing working capital requirements, including the provision of liquidity support for its commercial paper program, provide for issuance of letters of credit and also for general corporate purposes. NiSource Finance's revolving credit facility has a program limit of $1.85 billion and is comprised of a syndicate of banks led by Barclays. At September 30, 2017 and December 31, 2016, NiSource had no outstanding borrowings under this facility.

NiSource Finance's commercial paper program has a program limit of up to $1.5 billion with a dealer group comprised of Barclays, Citigroup, Credit Suisse and Wells Fargo. As of September 30, 2017 and December 31, 2016, NiSource had commercial paper outstanding of $581.0 million and $1,178.0 million, respectively.

As of September 30, 2017 and December 31, 2016, NiSource had $13.0 million and $14.7 million of stand-by letters of credit, respectively. All stand-by letters of credit were under the revolving credit facility.

Transfers of accounts receivable are accounted for as secured borrowings resulting in the recognition of short-term borrowings on the Condensed Consolidated Balance Sheets (unaudited) in the amount of $262.2 million and $310.0 million as of September 30, 2017 and December 31, 2016, respectively. Refer to Note 8, "Transfers of Financial Assets," for additional information.

~~Short-term borrowings were as follows:~~

(in millions) September 30,
2017 December 31,
2016
Commercial Paper weighted-average interest rate of 1.50% and 1.24% at September 30, 2017 and December 31, 2016, respectively $ 581.0
$ 1,178.0
Accounts receivable securitization facility borrowings 262.2
310.0
Total Short-Term Borrowings $ 843.2
$ 1,488.0

Given their maturities are less than 90 days, cash flows related to the borrowings and repayments of the items listed above are presented net in the Condensed Statements of Consolidated Cash Flows (unaudited).

~~14.~~15. Other Commitments and Contingencies

A. Guarantees and Indemnities. ~~As a part~~We and certain of ~~normal business, NiSource and certain~~our subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of certain ~~subsidiaries.~~subsidiaries as a part of normal business. Such agreements include guarantees and stand-by letters of credit. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the ~~subsidiaries’~~subsidiaries' intended commercial purposes. As of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016, NiSource~~2023, we had issued stand-by letters of credit of ~~$13.0~~$9.9 million for the benefit of third parties.

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

We provide guarantees related to our future performance under BTAs for our renewable generation projects. At March 31, 2024 and December 31, 2023, our guarantees for multiple BTAs totaled $672.3 million and ~~$14.7~~$646.1 million, respectively. The amount of each guaranty will decrease upon the substantial completion of the construction of the facilities. See ''- D. Other Matters - Generation Transition,'' below for more information.

B. Legal Proceedings. From time to time, various legal and regulatory claims and proceedings are pending or threatened against the Company and its subsidiaries. While the amounts claimed may be substantial, the Company is unable to predict with certainty the ultimate outcome of such claims and proceedings. The Company ~~is party~~establishes reserves whenever it believes it to ~~certain claims and legal proceedings arising~~be appropriate for pending litigation matters. However, the actual results of resolving the pending litigation matters may be substantially higher than the amounts reserved.If one or more matters were decided against us, the effects could be material to our results of operations in the ~~ordinary course of business, none of~~period in which ~~is deemed~~we would be required to record or adjust the related liability and could also be ~~individually~~ material ~~at this time.~~to our cash flows in the periods that we would be required to pay such liability. Due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim, proceeding or ~~proceeding~~investigation would not have a material adverse effect on ~~the Company’s~~our results of operations, financial position or liquidity. ~~If one or more~~

Other Claims and Proceedings.We are also party to other claims, regulatory and legal proceedings arising in the ordinary course of business in each state in which we have operations, and based upon an investigation of these matters and discussion with legal counsel, we believe the ultimate outcome of such ~~matters were decided against the Company, the effects could~~other legal proceedings to be individually, or in aggregate, not material to the Company’s results of operations in the period in which the Company would be required to record or adjust the related liability and could also be material to the Company’s cash flows in the periods the Company would be required to pay such liability.at this time.

~~Table of Contents~~

~~ITEM 1. FINANCIAL STATEMENTS (continued)~~

~~NiSource Inc.~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (continued)~~

C. Environmental Matters.~~NiSource~~ Our operations are subject to environmental statutes and regulations related to air quality, water quality, hazardous waste and solid waste. ~~NiSource believes~~We believe that ~~it is~~we are in substantial compliance with the environmental regulations currently applicable to ~~its~~our operations.

It is management's continued intent to address environmental issues in cooperation with regulatory authorities in such a manner as to achieve mutually acceptable compliance plans. However, there can be no assurance that fines and penalties will not be incurred. Management expects a ~~significant portion~~majority of environmental assessment and remediation costs and asset retirement costs, further described below, to be recoverable through ~~rates for certain NiSource companies.~~rates.

As of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016, NiSource~~2023, we had recorded a liability of ~~approximately $112.6~~$77.8 million and ~~$111.4~~$80.0 million, respectively, to cover environmental remediation at various sites. ~~The current portion of this~~This liability is included in ~~"Legal~~"Other accruals" and ~~environmental"~~"Other noncurrent liabilities and deferred credits" in the Condensed Consolidated Balance Sheets (unaudited). ~~The noncurrent portion is included in "Other noncurrent liabilities" in the Condensed Consolidated Balance Sheets (unaudited). NiSource recognizes~~We recognize costs associated with environmental remediation obligations when the incurrence of such costs is probable and the amounts can be reasonably estimated. The original estimates for remediation activities may differ materially from the amount ultimately expended. The actual future expenditures depend on many factors, including ~~currently enacted~~ laws and regulations, the nature and extent of impact and the method of ~~remediation and the availability of cost recovery.~~remediation. These expenditures are not currently estimable at some sites. ~~NiSource~~We periodically ~~adjusts its~~adjust our liability as information is collected and estimates become more refined.

~~Electric Operations' compliance estimates disclosed below are reflective of NIPSCO's Integrated Resource Plan submitted to the IURC on November 1, 2016. See section~~ D~~, "Other Matters," below for additional information.~~

~~Air~~

~~The actions listed below could require further reductions in emissions from various emission sources. NiSource will continue to closely monitor developments in these matters.~~

Future legislative and regulatory programs could significantly limit allowed GHG emissions or impose a cost or tax on GHG emissions. Additionally, rules that increase methane leak detection, require emission reductions or impose additional requirements for natural gas facilities could restrict GHG emissions and impose additional costs. NiSource will carefully monitor all GHG reduction proposals and regulations.

~~National Ambient Air Quality Standards.~~ The CAA requires the EPA to set NAAQS for six "criteria" air pollutants considered harmful to public health and the environment. Periodically, the EPA imposes new, or modifies existing, NAAQS. States containing areas that do not meet the new or revised standards, or contribute significantly to nonattainment of downwind states, may be required to take steps to achieve and maintain compliance with the standards. These steps could include additional pollution controls on boilers, engines, turbines and other facilities owned by electric generation and gas distribution operations.

~~Ozone:~~ On October 26, 2015, the EPA issued a final rule to lower the 8-hour ozone standard from 75 ppb to 70 ppb. After the EPA proceeds with designations, areas where NiSource operates that are currently designated in attainment with the standards may be reclassified as nonattainment. NiSource will continue to monitor this matter and cannot estimate its impact at this time.

~~Clean Power Plan.~~ ~~On October 23, 2015, the EPA issued a final rule to regulate CO~~₂ ~~emissions from existing fossil-fuel EGUs under section 111(d) of the CAA. The final rule establishes national CO~~₂ emission-rate standards that are applied to each state’s mix of affected EGUs to establish state-specific emission-rate and mass-emission limits. The final rule requires each state to submit a plan indicating how the state will meet the EPA's emission-rate or mass-emission limit, including possibly imposing reduction obligations on specific units. If a state does not submit a satisfactory plan, the EPA will impose a federal plan on that state. On February 9, 2016, the U.S. Supreme Court stayed implementation of the CPP until litigation is decided on its merits. On October 16, 2017, the EPA published in the Federal Register a Notice of Proposed Rulemaking that would repeal the CPP. The public will have 60 days to comment on this proposal, after which time the proposal may become final. NIPSCO will continue to monitor this matter and cannot estimate its impact at this time. Should costs be incurred to comply with the CPP, NIPSCO believes such costs will be eligible for recovery through customer rates.

~~Waste~~

CERCLA. ~~NiSource~~Our subsidiaries are potentially responsible parties at waste disposal sites under ~~the~~ CERCLA ~~(commonly known as Superfund)~~ and similar state laws. ~~Additionally, NiSource~~Under CERCLA, each potentially responsible party can be held jointly, severally and strictly liable for the remediation costs as the EPA, or state, can allow the parties to pay for remedial action or perform remedial action themselves and request reimbursement from the potentially responsible parties. Our affiliates have retained CERCLA environmental liabilities, including remediation liabilities, associated with certain current and former operations. At this time, we cannot estimate the full cost of remediating properties that have not yet been investigated, but it is possible that the future costs could be material to the Condensed Consolidated Financial Statements (unaudited).

MGP. A We maintain a program ~~has been instituted~~ to identify and investigate former MGP sites where ~~Gas Distribution Operations~~our subsidiaries or predecessors may have liability. The program has identified 6453 such sites where liability is probable. Remedial actions at many

~~Table of Contents~~

~~ITEM 1. FINANCIAL STATEMENTS (continued)~~

~~NiSource Inc.~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (continued)~~

of these sites are being overseen by state or federal environmental agencies through consent agreements or voluntary remediation agreements.

~~NiSource utilizes~~We utilize a probabilistic model to estimate ~~its~~our future remediation costs related to ~~its~~ MGP sites. The model was prepared with the assistance of a third party and incorporates ~~NiSource~~our experience and general industry experience with remediating MGP sites. ~~NiSource completes~~We complete an annual refresh of the model in the second quarter of each fiscal year. ~~No material changes to the estimated future remediation costs were noted as a result of the refresh completed as of June 30, 2017. The~~Our total estimated liability ~~at NiSource~~ related to the facilities subject to remediation was ~~$108.0~~$72.8 million and ~~$105.5~~$73.7 million at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, respectively. The liability represents ~~NiSource’s~~our best estimate of the probable cost to remediate the ~~facilities. NiSource believes~~MGP sites. Our model indicates that it is reasonably possible that remediation costs could vary by as much as ~~$25~~$15.1 million in addition to the costs noted above. Remediation costs are estimated based on the best available information, applicable remediation standards at the balance sheet date and experience with similar facilities.

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

CCRs. ~~On April 17, 2015,~~NIPSCO continues to meet the compliance requirements established by the EPA ~~issued a final rule~~ for the regulation of CCRs. The rule regulates CCRs under the RCRA Subtitle D, which determines them to be nonhazardous. The rule is implemented in phases and requires increased groundwater monitoring, reporting, recordkeeping and posting of related information to the Internet. The rule also establishes requirements related to CCR management and disposal. The rule will allow NIPSCO to continue its byproduct beneficial use program.

~~The publication of the~~ CCR rule ~~resulted~~requirements currently in effect required revisions to previously recorded legal obligations associated with the retirement of certain NIPSCO facilities. The actual asset retirement costs related to the CCR rule may vary substantially from the estimates used to record the increased asset retirement obligation due to the uncertainty about the requirements that will be established by environmental authorities, compliance strategies that will be used and the preliminary nature of available data used to estimate costs. In addition, to comply with the rule, NIPSCO will be required to incur future capital expenditures to modify its infrastructure and manage CCRs. Capital compliance costs are currently expected to total approximately $193 million. As allowed by the ~~EPA,~~rule, NIPSCO will continue to collect data over time to determine the specific compliance solutions and associated costs and, as a result, the actual costs may vary. On April 25, 2024 new EPA rules have been issued and we are evaluating the potential impact on our business.

D. Other Matters.

Generation Transition.NIPSCO ~~filed~~has also executed several BTAs with developers to construct renewable generation facilities. NIPSCO has received IURC approval for all of its BTAs and PPAs. In addition to IURC approval, NIPSCO's purchase obligation under the BTAs is dependent on timely completion of construction and for certain BTAs successful execution by NIPSCO of an agreement with a ~~petition on November 1, 2016 with~~tax equity partner. Certain agreements require NIPSCO to make partial payments upon the developer's completion of significant construction milestones. With respect to BTAs for which tax equity partnerships are utilized, NIPSCO and the tax equity partner are obligated to make cash contributions to the JV that acquires project at the date construction is substantially complete. Once the tax equity partner has earned its negotiated rate of return and we have reached the agreed upon contractual date, NIPSCO has the option to purchase at fair market value the remaining interest in the JV from the tax equity partner. On January 17, 2024, the IURC ~~seeking approval~~approved the full ownership of ~~the projects~~Cavalry and ~~recovery of the costs associated with CCR compliance. On June 9, 2017, NIPSCO~~Dunns Bridge II which will allow those BTAs to be executed through direct ownership. In March 2024, we filed with the IURC ~~a settlement reached with certain parties regarding~~to modify the ~~CCR~~ownership structure for Gibson and Fairbanks solar projects to become fully owned projects and ~~treatment~~to modify the cost of ~~associated costs. An evidentiary hearing was held on August 21, 2017 and an order is expected by~~ the ~~end of 2017.~~

~~Water~~

~~ELG.~~ On November 3, 2015, the EPA issued a final rule to amend the ELG and standards for the Steam Electric Power Generating category. The final rule became effective January 4, 2016. The rule imposes new water treatment and discharge requirements on NIPSCO's electric generating facilities to be applied between 2018 and 2023. On April 25, 2017, the EPA published noticeFairbanks project as contemplated in the ~~Federal Register that~~contractual actions. On March 18, 2024, Cavalry achieved mechanical completion, resulting in NIPSCO making a $110.6 million payment to the ~~EPA is reconsidering~~developer.

16. Accumulated Other Comprehensive Loss

The following tables display the ~~ELG~~components of Accumulated Other Comprehensive Loss, net of tax:


(in millions)	Gains and Losses on Securities(1)		Gains and Losses on Cash Flow Hedges(1)		Pension and OPEB Items(1)		Accumulated Other Comprehensive Loss(1)
Balance as of January 1, 2024	$	(7.3)	$	(12.8)	$	(13.5)	$	(33.6)
Other comprehensive loss before reclassifications	(0.6)		(0.2)		(0.1)		(0.9)
Amounts reclassified from accumulated other comprehensive loss	0.3		0.1		0.3		0.7
Net current-period other comprehensive income (loss)	(0.3)		(0.1)		0.2		(0.2)

Balance as of March 31, 2024	$	(7.6)	$	(12.9)	$	(13.3)	$	(33.8)

(1)All amounts are net of tax. Amounts in ~~response to several petitions for reconsideration. On September 18, 2017, the EPA published notice~~parentheses indicate debits.


(in millions)	Gains and Losses on Securities(1)		Gains and Losses on Cash Flow Hedges(1)		Pension and OPEB Items(1)		Accumulated Other Comprehensive Loss(1)
Balance as of January 1, 2023	$	(11.2)	$	(12.6)	$	(13.3)	$	(37.1)
Other comprehensive income (loss) before reclassifications	1.7		—		—		1.7
Amounts reclassified from accumulated other comprehensive loss	0.3		0.1		0.3		0.7
Net current-period other comprehensive income (loss)	2.0		0.1		0.3		2.4

Balance as of March 31, 2023	$	(9.2)	$	(12.5)	$	(13.0)	$	(34.7)

(1)All amounts are net of tax. Amounts in the Federal Register their intention to postpone the earliest compliance dates for flue gas desulfurization wastewater and bottom ash transport water requirements to potentially consider revisions to technology and numeric limits achievable. NIPSCO is unable to estimate the impact of the postponement of these compliance dates at this time. Based upon a preliminary engineering study, capital compliance costs are currently expected to cost approximately $170 million. On November 1, 2016, NIPSCO filed a petition with the IURC seeking approval of the projects and recovery of the costs associated with ELG compliance. Given the current postponement of certain compliance dates under the ELG rule, NIPSCO has agreed with the settling parties as part of the settlement agreement discussed in the "CCRs" subsection above, that these ELG projects and related costs would be addressed in a later proceeding.parentheses indicate debits.

~~D. Other Matters.~~

~~NIPSCO 2016 Integrated Resource Plan.~~Environmental, regulatory and economic factors, including low natural gas prices and aging coal-fired units, have led NIPSCO to consider modifying its current electric generation supply mix to include less coal-fired generation. Due to enacted CCR and ELG (subsequently postponed) legislation, NIPSCO would expect to incur over $1 billion in operating, maintenance, environmental and other costs over the next seven years if the current fleet of coal-fired generating units remain operational.

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Schahfer Generating Station by the end of 2023. It is projected over the long term that the cost to customers to retire these units at these dates will be lower than maintaining and upgrading them for continuing generation.

NiSource and NIPSCO committed to the retirement of the Bailly Generating Station units in connection with the filing of the 2016 Integrated Resource Plan, pending approval by the MISO. In the fourth quarter of 2016, the MISO approved NIPSCO's plan to retire the Bailly Generating Station units by May 31, 2018. In accordance with ASC 980-360, the remaining net book value of the Bailly Generating Station units was reclassified from "Net utility plant" to "Other property, at cost, less accumulated depreciation" on the Condensed Consolidated Balance Sheets (unaudited).

In connection with the MISO's approval of NIPSCO's planned retirement of the Bailly Generating Station units, NiSource recorded $22.1 million of plant retirement-related charges in the fourth quarter of 2016. These charges were comprised of contract termination charges related to NIPSCO's capital lease with Pure Air (discussed further below), voluntary employee severance benefits, and write downs of certain materials and supplies inventory balances.

~~NIPSCO Pure Air.~~ NIPSCO has a service agreement with Pure Air, a general partnership between Air Products and Chemicals, Inc. and First Air Partners LP, under which Pure Air provides scrubber services to reduce sulfur dioxide emissions for Units 7 and 8 at the Bailly Generating Station. Services under this contract commenced on July 1, 1992 and expired on June 30, 2012. The agreement was renewed effective July 1, 2012 for ten years requiring NIPSCO to pay for the services under a combination of fixed and variable charges. NiSource has made an exhaustive effort to obtain information needed from Pure Air to determine the status of Pure Air as a VIE. However, NIPSCO has not been able to obtain this information and, as a result, it is unclear whether Pure Air is a VIE and if NIPSCO is the primary beneficiary. NIPSCO will continue to request the information required to determine whether Pure Air is a VIE. NIPSCO has no exposure to loss related to the service agreement with Pure Air and payments under this agreement were $16.5 million and $16.0 million for the nine months ended September 30, 2017 and 2016, respectively. In accordance with GAAP, the renewed agreement was evaluated to determine whether the arrangement qualifies as a lease. Based on the terms of the agreement, the arrangement qualified for capital lease accounting. As the effective date of the new agreement was July 1, 2012, NiSource capitalized this lease beginning in the third quarter of 2012.

As further discussed above in this Note 14 under the heading "NIPSCO 2016 Integrated Resource Plan," NIPSCO plans to retire the generation station units serviced by Pure Air by May 31, 2018. In December 2016, as allowed by the provisions of the service agreement, NIPSCO provided Pure Air formal notice of intent to terminate the service agreement, effective May 31, 2018. Providing this notice to Pure Air triggered a contract termination liability of $16 million which was recorded in fourth quarter of 2016. This expense was included as part of the plant retirement-related charges discussed above. Payment of this liability is not due until NIPSCO ceases use of the scrubber services. The liability is presented in "Other accruals" on the Condensed Consolidated Balance Sheets (unaudited). In addition, NIPSCO remeasured the remaining capital lease asset and obligation to reflect the change in estimated remaining minimum lease payments. This remeasurement was a non-cash transaction that had no impact on the Statements of Consolidated Income.

~~Technology Services.~~ On December 31, 2013, NiSource Corporate Services Company signed a seven-year agreement with IBM to continue to provide business process and support functions to NiSource under a combination of fixed and variable charges, with the variable charges fluctuating based on the actual need for such services. The agreement was effective January 1, 2014 with a commencement date of April 1, 2014.

In April 2017, NiSource initiated a process to terminate its agreement with IBM and began negotiating contracts with IT service providers other than IBM. The terminated agreement calls for NiSource to pay certain charges in the event of a termination by NiSource for any reason other than material breach by IBM. NiSource and IBM are in discussions with respect to the charges owed IBM. Liabilities recorded related to termination charges as of September 30, 2017 are not material to the Condensed Consolidated Financial Statements (unaudited).

In May and June 2017, NiSource executed agreements with new IT service providers. The new agreements have terms ending at various dates throughout 2022. Knowledge sharing and transition of responsibilities from IBM to the new service providers is currently underway and is expected to be substantially complete by the end of 2017. Costs associated with transition activities, including legal and consulting fees, are expensed as incurred. Annual payments for services received under the new agreements are not expected to result in a material change to NiSource’s aggregate contractual obligations.

~~Table of Contents~~

~~ITEM 1. FINANCIAL STATEMENTS (continued)~~

~~NiSource Inc.~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (continued)~~

~~15. Accumulated Other Comprehensive Loss~~

~~The following tables display the components of Accumulated Other Comprehensive Loss:~~

Three Months Ended September 30, 2017 (in millions)
Gains and Losses on Securities⁽¹⁾

Gains and Losses on Cash Flow Hedges⁽¹⁾

Pension and OPEB Items⁽¹⁾

Accumulated
Other
Comprehensive
Loss⁽¹⁾
Balance as of July 1, 2017 $ 0.4
$ (18.8 ) $ (17.2 ) $ (35.6 )
Other comprehensive income (loss) before reclassifications 0.1
(9.7 ) —
(9.6 )
Amounts reclassified from accumulated other comprehensive loss —
0.4
1.1
1.5
Net current-period other comprehensive income (loss) 0.1
(9.3 ) 1.1
(8.1 )
Balance as of September 30, 2017 $ 0.5
$ (28.1 ) $ (16.1 ) $ (43.7 )

Nine Months Ended September 30, 2017 (in millions)
Gains and Losses on Securities⁽¹⁾

Gains and Losses on Cash Flow Hedges⁽¹⁾

Pension and OPEB Items⁽¹⁾

Accumulated
Other
Comprehensive
Loss⁽¹⁾
Balance as of January 1, 2017 $ (0.6 ) $ (6.9 ) $ (17.6 ) $ (25.1 )
Other comprehensive income (loss) before reclassifications 1.1
(23.3 ) 0.2
(22.0 )
Amounts reclassified from accumulated other comprehensive loss —
2.1
1.3
3.4
Net current-period other comprehensive income (loss) 1.1
(21.2 ) 1.5
(18.6 )
Balance as of September 30, 2017 $ 0.5
$ (28.1 ) $ (16.1 ) $ (43.7 )

Three Months Ended September 30, 2016 (in millions)
Gains and Losses on Securities⁽¹⁾

Gains and Losses on Cash Flow Hedges⁽¹⁾

Pension and OPEB Items⁽¹⁾

Accumulated
Other
Comprehensive
Loss⁽¹⁾
Balance as of July 1, 2016 $ 2.0
$ (139.7 ) $ (18.6 ) $ (156.3 )
Other comprehensive loss before reclassifications (0.3 ) (22.9 ) —
(23.2 )
Amounts reclassified from accumulated other comprehensive loss —
0.3
0.2
0.5
Net current-period other comprehensive income (loss) (0.3 ) (22.6 ) 0.2
(22.7 )
Balance as of September 30, 2016 $ 1.7
$ (162.3 ) $ (18.4 ) $ (179.0 )

Nine Months Ended September 30, 2016 (in millions)
Gains and Losses on Securities⁽¹⁾

Gains and Losses on Cash Flow Hedges⁽¹⁾

Pension and OPEB Items⁽¹⁾

Accumulated
Other
Comprehensive
Loss⁽¹⁾
Balance as of January 1, 2016 $ (0.5 ) $ (15.5 ) $ (19.1 ) $ (35.1 )
Other comprehensive income (loss) before reclassifications 2.3
(148.0 ) —
(145.7 )
Amounts reclassified from accumulated other comprehensive loss (0.1 ) 1.2
0.7
1.8
Net current-period other comprehensive income (loss) 2.2
(146.8 ) 0.7
(143.9 )
Balance as of September 30, 2016 $ 1.7
$ (162.3 ) $ (18.4 ) $ (179.0 )

⁽¹⁾~~All amounts are net of tax. Amounts in parentheses indicate debits.~~

~~16.~~17. Business Segment Information

At ~~September 30, 2017, NiSource’s~~Our reportable segments reflect the manner in which our business is managed, and our resources are allocated. Following the consummation of the NIPSCO Minority Interest Transaction, the funding and strategic management was revised to evaluate operating performance at the state level. Refer to Note 4, "Noncontrolling Interests," for additional information on the NIPSCO Minority Interest Transaction. Our operations are ~~divided into~~now evaluated through two primary reportable ~~segments. The~~segments, Columbia Operations and NIPSCO Operations. Columbia Operations aggregates the results of the fully regulated and wholly owned subsidiaries of NiSource Gas Distribution Group, Inc. (a holding company that owns Columbia of Kentucky, Columbia of Maryland, Columbia of Ohio, Columbia of Pennsylvania, and Columbia of Virginia). Each Columbia distribution company is an operating segment which we aggregate to form the Columbia Operations reportable segment. NIPSCO Operations includes the results of NIPSCO Holdings I and its majority-owned subsidiaries, including NIPSCO, which has fully regulated gas and electric operations in Northwest Indiana.

The remainder of our operations, which are not significant enough on a stand-alone basis to warrant treatment as a reportable segment, ~~provides natural gas service~~are presented as "Corporate and ~~transportation~~Other" and primarily are comprised of interest expense on holding company debt, and unallocated corporate costs and activities. Refer to Note 3, "Revenue Recognition," for ~~residential, commercial~~additional information on our segments and ~~industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana and Massachusetts. The Electric Operations segment provides electric service in~~ 20 ~~counties in the northern part~~their sources of ~~Indiana.~~

~~Table of Contents~~

~~ITEM 1. FINANCIAL STATEMENTS (continued)~~

~~NiSource Inc.~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (continued)~~

revenues. The following table provides information about ~~business~~our reportable segments. ~~NiSource~~Our CODM uses operating income as ~~its~~the primary measurement for each of the reported segments and makes decisions on finance, dividends, and taxes at the corporate level on a consolidated basis. Segment revenues include intersegment sales to affiliated subsidiaries, which are eliminated in consolidation. Affiliated sales are recognized on the basis of prevailing market, regulated prices or at levels provided for under contractual agreements. Operating income is derived from revenues and expenses directly associated with each segment.

Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2017 2016 2017 2016
Gross Revenues
Gas Distribution Operations
Unaffiliated $ 431.1
$ 392.4
$ 2,139.9
$ 1,935.6
Intersegment 3.5
3.1
10.6
9.6
Total 434.6
395.5
2,150.5
1,945.2
Electric Operations
Unaffiliated 485.8
465.4
1,365.5
1,249.2
Intersegment 0.2
0.4
0.6
0.6
Total 486.0
465.8
1,366.1
1,249.8
Corporate and Other
Unaffiliated 0.1
3.5
0.9
10.7
Intersegment 126.4
100.5
367.7
298.1
Total 126.5
104.0
368.6
308.8
Eliminations (130.1 ) (104.0 ) (378.9 ) (308.3 )
Consolidated Gross Revenues $ 917.0
$ 861.3
$ 3,506.3
$ 3,195.5
Operating Income (Loss)
Gas Distribution Operations $ (23.7 ) $ 4.3
$ 362.1
$ 392.7
Electric Operations 124.4
112.8
286.3
251.5
Corporate and Other (1.1 ) (3.4 ) (7.8 ) (10.9 )
Consolidated Operating Income $ 99.6
$ 113.7
$ 640.6
$ 633.3

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)


	Three Months Ended March 31,
(in millions)		2024		2023
Operating Revenues
Columbia Operations
Unaffiliated		$	953.7	$	1,048.9
Intersegment		3.2		3.0
Total		956.9		1,051.9
NIPSCO Operations
Unaffiliated		752.4		916.9
Intersegment		0.3		0.3
Total		752.7		917.2
Corporate and Other
Unaffiliated		0.2		0.2
Intersegment		139.9		116.7
Total		140.1		116.9
Eliminations		(143.4)		(120.0)
Consolidated Operating Revenues		$	1,706.3	$	1,966.0
Operating Income
Columbia Operations		$	362.0	$	351.8
NIPSCO Operations		216.4		177.0
Corporate and Other		5.0		2.2
Consolidated Operating Income		$	583.4	$	531.0

The following table provides information about the assets of our reportable segments included in the Condensed Consolidated Balance Sheet (unaudited):


(in millions)	March 31, 2024		December 31, 2023
Assets
Columbia Operations	$	13,789.8	$	13,664.5
NIPSCO Operations	14,221.0		13,962.6
Corporate and Other	1,327.3		3,450.1
Consolidated Assets	$	29,338.1	$	31,077.2

Information about our reportable segments for the three months ended March 31, 2023, as well as for the period ended December 31, 2023 has been recast to align with the current year's presentation.

Table of Contents`

ITEM 1. FINANCIAL STATEMENTS (continued)

NiSource Inc.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

18. Other, Net

The following table displays the components of Other, Net included on the Condensed Statements of Consolidated Income (unaudited):


	Three Months Ended March 31,
(in millions)		2024		2023
Interest income		$	2.5	$	1.8
AFUDC equity		11.3		4.8

Pension and other postretirement non-service benefit (cost)		(2.2)		(3.5)

Miscellaneous		(2.4)		(1.6)
Total Other, net		$	9.2	$	1.5

Table of Contents

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

NiSource Inc.


Index		Page

~~Index~~	~~Page~~
Executive Summary	3235
Summary of Consolidated Financial Results		3237
Results and Discussion of Segment Operations		34
~~Gas Distribution Operations~~	35
~~Electric Operations~~	38
Columbia Operations		39
NIPSCO Operations		42
Liquidity and Capital Resources		4147
~~Off Balance Sheet~~ Regulatory, Environmental and Safety Matters~~Arrangements~~		4351
Market Risk Disclosures		4355
Other Information		4456

Table of Contents

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

NiSource Inc.

EXECUTIVE SUMMARY

This ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations ~~(Management’s Discussion) analyzes the financial condition, results of operations and cash flows of NiSource and its subsidiaries. It also~~("Management’s Discussion") includes management’s analysis of past financial results and certain potential factors that may affect future results, potential future risks and approaches that may be used to manage those risks. See "Note regarding forward-looking statements" at the beginning of this report for a list of factors that may cause results to differ materially.

~~Management’s~~Management's Discussion is designed to provide an understanding of ~~NiSource's~~our operations and financial performance and should be read in conjunction with ~~NiSource’s~~our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2023.

~~NiSource is~~We are an energy holding company under the Public Utility Holding Company Act of 2005 whose utility subsidiaries are fully regulated natural gas and electric utility companies serving customers in ~~seven~~six states. ~~NiSource generates~~We generate substantially all of ~~its~~our operating income through these rate-regulated businesses, which are summarized for financial reporting purposes into two primary reportable segments: ~~Gas Distribution~~Columbia Operations and ~~Electric~~NIPSCO Operations.

Refer to ~~the “Business” section of NiSource’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016~~''Note 17, "Business Segment Information," for further discussion of ~~its regulated utility~~our business segments.

~~NiSource’s~~Our goal is to develop strategies that benefit all stakeholders as ~~it addresses~~we (i) focus on long-term infrastructure investment and safety programs to better serve our customers, (ii) align our tariff structures with our cost structure, and (iii) address changing customer ~~conservation patterns, develops more contemporary pricing structures and embarks on long-term investment programs.~~energy demand. These strategies ~~are intended~~focus on improving safety and reliability, enhancing customer experience, pursuing regulatory and legislative initiatives to ~~improve reliability~~increase accessibility for customers currently not on our gas and ~~safety, enhance~~electric service, ensuring customer ~~services~~affordability and ~~reduce~~reducing emissions while generating sustainable returns. ~~Additionally,~~The safety of our customers, communities and employees remains our focus. Serving as a guiding practice for our SMS, NiSource ~~continues~~is certified in conformance to ~~pursue regulatory~~the American Petroleum Institute Recommended Practice 1173, which is the foundation to our journey towards operational excellence. We also made advancements in key strategic initiatives, described in further detail below.

Energy Transition: We continue to advance our energy transition strategy, primarily through the continuation and ~~legislative initiatives that will allow residential~~enhancement of existing programs, such as retiring and replacing remaining coal-fired electric generation by 2028 with a balanced mix of low- or zero-emission electric generation, ongoing pipe replacement and modernization programs, and deployment of advanced leak detection and repair. Our electric generation transition, initiated through the NIPSCO 2018 Integrated Resource Plan ("2018 Plan") is well underway, and we are continually adjusting to the dynamic energy landscape. As of March 31, 2024, we have executed and received IURC approval for BTAs and PPAs for wind, solar and solar plus storage projects,with a combined nameplate capacity of 1,950 MW and 1,400 MW, respectively, under the 2018 Plan. We have also taken contractual actions on a number of our other renewable projects to address the timing of these projects as well as consider the broad market issues facing the industry. We remain on track to retire R.M Schahfer's remaining two coal units by the end of 2025. On January 17, 2024, the IURC approved full ownership of the Cavalry and Dunns Bridge II projects, allowing NIPSCO to leverage provisions of the Inflation Reduction Act passed in 2022, to monetize renewable tax credits more effectively. Full ownership of these projects provide enhanced benefits to customers ~~not currently~~as compared to the previous tax equity partnership structure approved by the IURC. In March 2024, we filed with the IURC to modify the ownership structure for Gibson and Fairbanks solar projects to become fully owned projects and to modify the cost of the Fairbanks project as contemplated in the contractual actions referenced above. We are continuing to evaluate the impact of this legislation on ~~NiSource's system~~our remaining projects, with potential to ~~obtain gas service~~drive increased value to customers. For additional information, see "Results and Discussion of Segment Operations - NIPSCO Operations," in ~~a cost effective manner.~~this Management's Discussion.

~~Summary~~In 2021, we announced and filed with the IURC the Preferred Energy Resource Plan associated with our 2021 Integrated Resource Plan ("2021 Plan"). The 2021 Plan affirms plans to retire the coal unit at the Michigan City Generating Station by the end of ~~Consolidated Financial Results~~

Three Months Ended September 30, Nine Months Ended September 30,
(in millions, except per share amounts) 2017 2016 2017 vs. 2016 2017 2016 2017 vs. 2016
Total Net Revenues $ 683.4
$ 643.1
$ 40.3
$ 2,443.6
$ 2,245.9
$ 197.7
Total Operating Expenses 583.8
529.4
54.4
1,803.0
1,612.6
190.4
Operating Income 99.6
113.7
(14.1 ) 640.6
633.3
7.3
Total Other Deductions, net (83.1 ) (81.5 ) (1.6 ) (362.5 ) (263.4 ) (99.1 )
Income Taxes 2.5
8.5
(6.0 ) 97.1
130.6
(33.5 )
Income from Continuing Operations

14.0
23.7
(9.7 ) 181.0
239.3
(58.3 )
Income (Loss) from Discontinued Operations - net of taxes —
3.5
(3.5 ) (0.1 ) 3.4
(3.5 )
Net Income 14.0
27.2
(13.2 ) 180.9
242.7
(61.8 )
Basic Earnings Per Share from Continuing Operations $ 0.04
$ 0.07
$ (0.03 ) $ 0.55
$ 0.74
$ (0.19 )
Basic Average Common Shares Outstanding 331.1
322.3
8.8
326.7
321.4
5.3

~~On a consolidated basis, NiSource reported income from continuing operations of $14.0 million, or $0.04 per basic share~~2028. The 2021 Plan calls for the ~~three months ended September 30, 2017, compared~~replacement of the retiring units with a diverse portfolio of resources including demand side management resources, incremental solar, stand-alone energy storage and upgrades to ~~$23.7 million, or $0.07 per basic share~~existing facilities at the Sugar Creek Generating Station, among other steps. Additionally, the 2021 Plan calls for a new natural gas peaking facility to replace existing vintage gas peaking facilities at the ~~same period in 2016. The decrease in income from continuing operations during 2017 was due primarily~~R.M. Schahfer Generating Station to ~~decreased operating income, as discussed below.~~

~~For~~support system reliability and resiliency, and upgrades to the three months ended September 30, 2017, NiSource reported operating income of $99.6 million compared to $113.7 million for the same period in 2016. The lower operating income was primarily due to increased operating expenses, including higher employee and administrative expenses, increased outside service costs and higher depreciation expense. These increases in operating expenses were partially offset by increased net revenues from new rates from base-rate proceedings and infrastructure replacement programs and increased rates from incremental capital spend on electric transmission ~~projects~~system. In September of 2023, we filed a request for issuance of a certificate of public convenience and necessity for an approximately 400 MW natural gas peaking generation facility with the IURC. The planned retirement of the two vintage gas peaking facilities at ~~NIPSCO. These favorable net revenue drivers were partially offset~~the R.M. Schahfer Generating Station is also expected to occur by the ~~effects~~end of ~~year-over-year weather variations, which reduced revenue in 2017 compared~~2028. Final retirement dates for these units, as well as Michigan City, will be subject to ~~2016.~~

For the nine months ended September 30, 2017, NiSource reported consolidated income from continuing operations of $181.0 million, or $0.55 per basic share compared to $239.3 million, or $0.74 per basic share for the same period in 2016. The decreaseMISO approval.

Table of Contents

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

NiSource Inc.

We continue to enhance safety and reduce methane emissions on our gas systems through modernization programs and utilization of advanced leak detection and repair. In addition, we plan to advance other low- or zero-emission energy resources and technologies, such as hydrogen and renewable natural gas.

NIPSCO Minority Interest Transaction: On December 31, 2023, contemporaneously with the closing of the NIPSCO Minority Interest Transaction, Blackstone, NIPSCO Holdings I, NIPSCO Holdings II, and NiSource entered into an Amended and Restated Limited Liability Company Agreement (the "LLC Agreement") of NIPSCO Holdings II. On January 31, 2024, BIP transferred a 4.5% equity interest in ~~income from continuing operations during 2017 was due primarily~~NIPSCO Holdings II to BIP Blue Buyer VCOC L.L.C., a ~~loss on early extinguishment~~Delaware limited liability company and also an affiliate of ~~long-term debt, partially offset by increased operating income,~~Blackstone. Effective upon the closing of this transfer, the members of NIPSCO Holdings II entered into a Second Amended and Restated Limited Liability Company Operating Agreement of NIPSCO Holdings II (the "Amended LLC Agreement"). The two affiliates of Blackstone must vote their equity holdings under the Amended LLC Agreement as ~~discussed below.~~

NiSource's operating income for the nine months ended September 30, 2017 was $640.6 million compared to $633.3 million for the same period in 2016. The higher operating income was primarily due to increased net revenues from new rates from base-rate proceedings and infrastructure replacement programs, along with increased rates from incremental capital spend on electric transmission projects at NIPSCO, partially offset by unfavorable effects of weather. The increase in net revenues was partially offset by increased operating expenses due to higher employee and administrative expenses, increased outside service costs, higher material and supplies expenses and increased environmental costs. Additionally, depreciation expense and other taxes increased relative to 2016. These increases in operating expenses were partially offset by decreased amortization expense.

~~Other Income (Deductions), net~~

~~Other income (deductions), net reduced income by $83.1 million in the third quarter of 2017 compared to a reduction in income of $81.5 million in the prior year.~~

Other income (deductions), net reduced income by $362.5 million in the nine months ended September 30, 2017 compared to a reduction in income of $263.4 million in the prior year. This change is due primarily to a loss on early extinguishment of long-term debt of $111.5 million which was incurred in 2017.one investor. Refer to Note ~~12, "Long-Term Debt,~~4, "Noncontrolling Interests," for more information on this transaction.

Transformation: Our enterprise-wide transformation roadmap focuses on operational excellence, safety, operation and maintenance management, and unlocking efficiencies. We are committed to identifying and implementing initiatives that will enable us to streamline work and improve logistics company-wide. These efforts include investments in proven technologies backed with standardized processes that will change the way we plan, schedule, and execute work in the ~~Notes~~field and how we engage and provide service to ~~Condensed Consolidated Financial Statements (unaudited)~~our customers. Taken together, all of our optimization initiatives will prioritize safety and continue to optimize our long-term growth profile. We are making progress towards our transformation goals with the anticipated third quarter 2024 launch of the first phase of our WAM program, an information technology system that optimizes the scheduling, dispatch, and execution of our field operations.

Economic Environment: We continue to monitor risks related to increasing order and delivery lead times for construction and other materials, potential unavailability of materials due to global shortages in raw materials, and decreased construction labor productivity in the event of disruptions in the availability of materials. We continue to see increasing prices associated with certain materials and supplies. To the extent that work delays occur or our costs increase, our business operations, results of operations, cash flows, and financial condition could be materially adversely affected.

We are faced with increased competition for employee and contractor talent in the current labor market which has resulted in increased costs to attract and retain talent. We are ensuring that we use all internal human capital programs (development, leadership enablement programs, succession, performance management) to promote retention of our current employees along with having a competitive and attractive employee value proposition for potential recruits. With a focus on workforce planning, we are evaluating our future talent footprint by creating flexible work arrangements where possible to ensure we have the right people, in the right role, and at the right time.

We continue to evaluate our financing plan to manage interest expense and exposure to rates. For more information on ~~the early extinguishment of long-term debt.~~interest rate risk, see "Market Risk Disclosures".

~~Income Taxes~~

~~Refer to Note 10, "Income Taxes," in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on income taxes.~~

~~Capital Investment.~~ In the nine months ended September 30, 2017, NiSource invested $1,216.4 million in capital expenditures across its gas and electric utilities. These expenditures were primarily aimed at furthering the safety and reliability of NiSource's gas distribution system, construction of new electric transmission assets and maintaining NiSource’s existing electric generation fleet. NiSource continues to execute on an estimated $30 billion in total projected long-term regulated utility infrastructure investments and expects to invest a total of approximately $1.6 to $1.7 billion in capital during 2017 to continue to modernize and improve its system across all seven states.

~~Liquidity.~~ NiSource believes that through income generated from operating activities, amounts available under its short-term revolving credit facility, commercial paper program, accounts receivable securitization facilities, long-term debt agreements and NiSource’s ability to access the capital markets, there is adequate capital available to fund its operating activities and capital expenditures in 2017 and beyond. At September 30, 2017 and December 31, 2016, NiSource had $1,275.3 million and $683.7 million, respectively, of net liquidity available, consisting of cash and available capacity under credit facilities. Additionally, as of September 30, 2017, NiSource has approximately $183 million of available remaining capacity to issue shares of common stock under its ATM program.

These factors and other impacts to the financial results are discussed in more detail within the following discussions of “Results and Discussion of Segment Operations” and “Liquidity and Capital Resources.”

~~Regulatory Developments~~

During the quarter ended September 30, 2017, NiSource continued to move forward on core infrastructure and environmental investment programs supported by complementary regulatory and customer initiatives across all seven states of its operating area. The discussion below summarizes significant regulatory developments that transpired during the third quarter of 2017:

~~Gas Distribution Operations~~

NIPSCO filed a gas base rate case with the IURC on September 27, 2017. The request, which seeks NIPSCO's first natural gas base rate increase in more than 25 years, supports continued investment in system upgrades, technology improvements and other measures to increase pipeline safety and system reliability. If approved as filed, the fully implemented request would increase annual revenues by $143.5 million, inclusive of amounts being recovered through various tracker programs. An order is expected in the second half of 2018.

Columbia of Ohio filed a settlement agreement in its pending application for a five year extension of its IRP on August 18, 2017. This well-established pipeline replacement program, which is currently authorized through December 31, 2017,

Table of Contents

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

NiSource Inc.

Summary of Consolidated Financial Results

~~covers replacement~~A summary of ~~priority mainline pipe and targeted customer service lines. An order by the PUCO is expected by the end of 2017.~~

New rates went into effect on October 27, 2017 following approval of Columbia of Maryland's base rate case settlement by the MPSC. The settlement supports continued accelerated replacement of aging pipe as well as adoption of additional pipeline safety upgrades and increases annual revenue by $2.4 million.

NIPSCO continues to execute on its seven-year, $850 million gas infrastructure modernization program to further improve system reliability and safety. New rates under NIPSCO's semi-annual tracker update took effect July 1, 2017. The latest update, covering $328.9 million of cumulative net capital spend through June 30, 2017, was filed on August 31, 2017. An order is expected in the fourth quarter of 2017.

~~On October 31, 2017, Columbia of Massachusetts filed its GSEP~~our consolidated financial results for the 2018 construction year. Columbia of Massachusetts is proposing to recover a cumulative revenue requirement of $26.8 million including a waiver to collect the $3.1 million revenue requirement in excess of the GSEP cap provision. If the waiver is not approved, the cumulative revenue requirement will be $23.7 million. An order is expected from the Massachusetts DPU in the second quarter of 2018, with new rates effective May 1, 2018.three months ended March 31, 2024 and 2023 are presented below:

~~Electric Operations~~


	Three Months Ended March 31,
(in millions, except per share amounts)		2024		2023		Favorable (Unfavorable)
Operating Revenues		$	1,706.3	$	1,966.0	$	(259.7)
Operating Expenses
Cost of energy		425.0		765.1		340.1
Other Operating Expenses		697.9		669.9		(28.0)
Total Operating Expenses		1,122.9		1,435.0		312.1
Operating Income		583.4		531.0		52.4
Total Other Deductions, Net		(107.1)		(107.4)		0.3
Income Taxes		76.0		85.8		9.8


Net Income		400.3		337.8		62.5
Net income (loss) attributable to noncontrolling interest		35.3		4.8		(30.5)
Net Income Attributable to NiSource		365.0		333.0		32.0
Preferred dividends and redemption premium		(20.7)		(13.8)		(6.9)
Net Income Available to Common Shareholders		344.3		319.2		25.1
Earnings Per Share
Basic Earnings Per Share		$	0.77	$	0.77	$	—
Diluted Earnings Per Share		$	0.77	$	0.71	$	0.06

NIPSCO continues to execute on its seven-year electric infrastructure modernization program, which includes enhancements to its electric transmission and distribution system designed to further improve system safety and reliability. The IURC-approved program represents approximately $1.25 billion of electric infrastructure investments expected to be made through 2022. On June 30, 2017, NIPSCO filed its latest tracker update request, covering $177.3 million in cumulative net capital expenditures through April 30, 2017. An order approving the request was received from the IURC on October 31, 2017.

NIPSCO's request, filed in November 2016, to invest in environmental upgrades at its Michigan City Unit 12 and R.M. Schahfer Units 14 and 15 generating facilities remains pending before the IURC. On June 9, 2017, NIPSCO, along with the Indiana OUCC, the Citizens Action Coalition and a group of NIPSCO industrial customers, submitted a settlement agreement seeking, among other things, approval and cost recovery for the CCR projects and moving ELG-related investments to a later proceeding. An IURC order is expected before the end of 2017.

Refer to Note 5, “Regulatory Matters,” as well as to Note 14, "Other Commitments and Contingencies," in the Notes to Condensed Consolidated Financial Statements (unaudited) for a complete discussion of key regulatory matters.

~~RESULTS AND DISCUSSION OF SEGMENT OPERATIONS~~

~~Presentation of Segment Information~~

~~NiSource’s operations are divided into two primary reportable segments: Gas Distribution Operations and Electric Operations.~~

~~Table of Contents~~

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

~~NiSource Inc.~~

~~Gas Distribution Operations~~

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2017 2016 2017 vs. 2016 2017 2016 2017 vs. 2016
Net Revenues
Sales revenues $ 434.6
$ 395.5
$ 39.1
$ 2,150.5
$ 1,945.2
$ 205.3
Less: Cost of gas sold (excluding depreciation and amortization) 94.6
76.1
18.5
662.0
569.6
92.4
Net Revenues 340.0
319.4
20.6
1,488.5
1,375.6
112.9
Operating Expenses

Operation and maintenance 257.9
213.4
44.5
792.3
668.3
124.0
Depreciation and amortization 67.9
64.3
3.6
199.5
188.8
10.7
Other taxes 37.9
37.4
0.5
134.6
125.8
8.8
Total Operating Expenses 363.7
315.1
48.6
1,126.4
982.9
143.5
Operating Income (Loss) $ (23.7 ) $ 4.3
$ (28.0 ) $ 362.1
$ 392.7
$ (30.6 )
Revenues

Residential $ 264.2
$ 247.7
$ 16.5
$ 1,404.4
$ 1,254.9
$ 149.5
Commercial 80.9
71.6
9.3
456.0
402.7
53.3
Industrial 39.7
36.4
3.3
156.5
139.9
16.6
Off-System 30.4
19.9
10.5
97.1
59.4
37.7
Other 19.4
19.9
(0.5 ) 36.5
88.3
(51.8 )
Total $ 434.6
$ 395.5
$ 39.1
$ 2,150.5
$ 1,945.2
$ 205.3
Sales and Transportation (MMDth)

Residential 14.5
13.7
0.8
157.2
169.5
(12.3 )
Commercial 17.3
16.3
1.0
111.3
114.7
(3.4 )
Industrial 125.9
130.4
(4.5 ) 380.3
393.7
(13.4 )
Off-System 11.1
7.4
3.7
33.8
27.3
6.5
Other 0.3
—
0.3
0.2
—
0.2
Total 169.1
167.8
1.3
682.8
705.2
(22.4 )
Heating Degree Days 75
33
42
2,911
3,297
(386 )
Normal Heating Degree Days 85
85
—
3,576
3,608
(32 )
% Warmer than Normal (12 )% (61 )%

(19 )% (9 )%
Gas Distribution Customers
Residential 3,114,223
3,088,525
25,698
Commercial 275,424
274,276
1,148
Industrial 6,163
6,408
(245 )
Other 3
—
3
Total 3,395,813
3,369,209
26,604

Net revenues are calculated as gross revenues less the associated cost of sales (excluding depreciation and amortization). Cost of sales at the Gas Distribution Operations segment is principally comprised of the cost of natural gas used while providing transportation and distribution services to its customers. The majority of the cost of ~~sales~~energy in the Columbia Operations and NIPSCO Operations segments are tracked costs that are passed through directly to the customer, resulting in an equal and offsetting amount reflected in ~~gross~~operating revenues.

~~Comparability~~The increase in net income available to common shareholders for the three months ended March 31, 2024 was primarily due to higher revenues, net of ~~line item operating results may also be impacted by regulatory, tax and depreciation trackers (other than those for~~ cost of ~~sales) that allow~~energy, driven by rate increases from regulatory outcomes. Higher net income is offset by increased net income attributable to noncontrolling interest following the consummation of the NIPSCO Minority Interest Transaction.

The increase in preferred dividends and redemption premium for the ~~recovery in rates~~three months ended March 31, 2024 was primarily due to the inclusion of ~~certain costs. Therefore, increases in these tracked operating expenses are~~$14 million Series B preferred redemption premium, offset by ~~increases~~a shortened dividend accrual period due to the early redemption of Series A Preferred Stock in ~~net revenues~~2023 and ~~have essentially no impact~~the reduction of accrual for Series B Preferred Stock in 2024. See Note 6, "Equity," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for additional information.

For additional information on operating income variance drivers see "Results and Discussion of Segment Operations" for Columbia Operations and NIPSCO Operations in this Management's Discussion.

Income Taxes

Refer to Note 13, "Income Taxes," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for information on income ~~from continuing operations.~~taxes and the change in the effective tax rates for the periods presented.

We continue to monitor and evaluate the impacts of final or proposed income tax regulations issued on provisions of the IRA including but not limited to renewable energy tax credits and the excise tax on stock buybacks guidance issued on April 9, 2024. While our analysis is not complete, we do not believe these proposed regulations will materially impact the excise tax liability recorded in 2023. See Note 6 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the excise tax on stock buybacks.

Table of Contents

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

NiSource Inc.

RESULTS AND DISCUSSION OF SEGMENT OPERATIONS

Presentation of Segment Information

In response to the NIPSCO Minority Interest Transaction, our operations are now evaluated through two primary reportable segments, Columbia Operations and NIPSCO Operations. Columbia Operations aggregates the results of the fully regulated and wholly owned subsidiaries of NiSource Gas Distribution Group, Inc. (a holding company that owns Columbia of Kentucky, Columbia of Maryland, Columbia of Ohio, Columbia of Pennsylvania, and Columbia of Virginia). Each Columbia distribution company is an operating segment which we aggregate to form the Columbia Operations reportable segment. NIPSCO Operations aggregates the results of NIPSCO Holdings I,and its majority-owned subsidiaries, including NIPSCO, which has both fully regulated gas and electric operations in Northwest Indiana. . The remainder of our operations, which are not significant enough on a stand-alone basis to warrant treatment as a reportable segment, are presented as "Corporate and Other" within the Notes to the Condensed Consolidated Financial Statements (unaudited) and primarily are comprised of interest expense on holding company debt, and unallocated corporate costs and activities.

Table of Contents

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

NiSource Inc.

Columbia Operations

Financial and operational data for the Columbia Operations segment for the three months ended ~~September 30, 2017 vs. September 30, 2016 Operating Income~~March 31, 2024 and 2023 are presented below.

~~For~~


	Three Months Ended March 31,
(in millions)		2024			2023			Favorable (Unfavorable)
Operating Revenues		$	956.9		$	1,051.9		$	(95.0)
Operating Expenses
Cost of energy		228.8			338.3			109.5
Operation and maintenance		210.7			220.5			9.8
Depreciation and amortization		98.2			87.7			(10.5)


Other taxes		57.2			53.6			(3.6)
Total Operating Expenses		594.9			700.1			105.2
Operating Income		$	362.0		$	351.8		$	10.2
Revenues
Residential		$	665.8		$	722.9		$	(57.1)
Commercial		225.3			253.2			(27.9)
Industrial		40.4			40.5			(0.1)
Off-System		12.7			17.2			(4.5)
Other		12.7			18.1			(5.4)
Total		$	956.9		$	1,051.9		$	(95.0)
Sales and Transportation (MMDth)
Residential		77.0			74.4			2.6
Commercial		54.3			50.7			3.6
Industrial		68.5			61.6			6.9
Off-System		7.3			7.4			(0.1)
Other		0.2			0.2			—
Total		207.3			194.3			13.0
Heating Degree Days(1)		2,284			2,229			55
Normal Heating Degree Days(1)		2,739			2,729			10
% (Warmer) than Normal		(17)		%	(18)		%
% Colder than prior year		2		%
Columbia Operations Customers
Residential		2,222,345			2,212,247			10,098
Commercial		189,394			189,222			172
Industrial		1,980			2,074			(94)
Other		5			3			2
Total		2,413,724			2,403,546			10,178

(1) Heating degree figures represent averages of the ~~third quarter~~five jurisdictions served by Columbia Operations.

Comparability of ~~2017, Gas Distribution~~operation and maintenance expenses, depreciation and amortization, and other taxes may be impacted by regulatory, depreciation, and tax trackers that allow for the recovery in rates of certain costs.

Table of Contents

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

NiSource Inc.

Columbia Operations ~~reported an~~

The underlying reasons for changes in our operating ~~loss of $23.7 million, versus operating income of $4.3 million in the comparable 2016 period.~~

~~Net~~ revenues for ~~third quarter of 2017 were $340.0 million, an increase of $20.6 million from~~ the ~~same period in 2016. The change in net revenues was primarily driven by:~~

~~New rates from base-rate proceedings and infrastructure replacement programs of $16.0 million.~~

~~Higher revenues from increased industrial, commercial and residential customer usage of $2.9 million.~~

~~The effects of increased residential customer growth of $1.3 million.~~

~~Operating expenses were $48.6 million higher for the third quarter of 2017~~three months ended March 31, 2024 compared to the same period in ~~2016. This change was primarily driven by:~~2023 are presented below.

Increased employee and administrative expenses of $25.4 million which includes the impact of a pension settlement charge recorded in 2017 along with a charge related to Columbia of Pennsylvania's portion of a 2017 pension contribution which, per regulatory order, is expensed on a cash basis.

~~Higher outside service costs of $14.4 million due to increased line locating expenses and IT service provider transition costs.~~

~~Increased depreciation of $3.6 million due to higher capital expenditures placed in service.~~

~~Nine months ended September 30, 2017 vs. September 30, 2016 Operating Income~~

~~For the nine months ended September 30, 2017, Gas Distribution Operations reported operating income of $362.1 million, a decrease of $30.6 million from the comparable 2016 period.~~

~~Net revenues for the nine months ended September 30, 2017 were $1,488.5 million, an increase of $112.9 million from the same period in 2016. The change in net revenues was primarily driven by:~~

~~New rates from base-rate proceedings and infrastructure replacement programs of $97.1 million.~~

~~Higher regulatory, tax and depreciation trackers, which are offset in expense, of $24.7 million.~~

~~The effects of increased residential customer growth of $5.7 million.~~

~~Partially offset by:~~

~~The effects of warmer weather of $14.6 million.~~

~~Operating expenses were $143.5 million higher for the nine months ended September 30, 2017 compared to the same period in 2016. This change was primarily driven by:~~

~~Increased employee and administrative expenses of $51.3 million which includes the impact of the aforementioned pension settlement charge and pension contribution.~~

~~Higher outside service costs of $32.9 million due to IT service provider transition costs and increased line locating expenses.~~

~~Higher regulatory, tax and depreciation trackers, which are offset in net revenues, of $24.7 million.~~

~~Increased depreciation of $9.7 million due to higher capital expenditures placed in service.~~

~~Increased property taxes of $6.9 million due to higher capital expenditures placed in service and an accrual adjustment recorded in 2016.~~

~~Higher environmental costs of $4.9 million.~~


	Favorable (Unfavorable)
Changes in Operating Revenues (in millions)	Three Months Ended March 31, 2024 vs 2023
New rates from base rate proceedings and regulatory capital programs	$	34.9
Increased customer usage	8.1
The effects of customer growth	2.2

The effects of weather in 2024 compared to 2023	1.6

Other	(2.9)
Change in operating revenues (before cost of energy and other tracked items)	$	43.9
Operating revenues offset in operating expense
Lower cost of energy billed to customers	(109.4)
Lower tracker deferrals within operation and maintenance, depreciation, and tax	(29.5)

Total change in operating revenues	$	(95.0)

Weather

In general, ~~NiSource calculates~~we calculate the weather-related revenue variance based on changing customer demand driven by weather variance from normal heating degree ~~days. NiSource's~~days, net of weather normalization mechanisms. Our composite heating degree days reported do not directly correlate to the weather-related dollar impact on the results of ~~Gas Distribution~~Columbia Operations. Heating degree days experienced during different times of the year or in different operating locations may have more or less impact on volume and dollars depending on when and where they occur. When the detailed results are combined for reporting, there may be weather-related dollar impacts on operations when there is not an apparent or significant change in ~~the~~our aggregated ~~NiSource~~ composite heating degree day comparison.

~~Table of Contents~~Throughput

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

~~NiSource Inc.~~

~~Gas Distribution Operations~~

~~Weather~~The increase in ~~the Gas Distribution Operations service territories~~total volumes for the ~~third quarter of 2017 was about 12% warmer than normal and about 127% colder than 2016, leading to increased net revenues of $0.2 million for the quarter~~three months ended ~~September 30, 2017~~March 31, 2024, compared to ~~2016.~~

~~Weather~~the same period in the Gas Distribution Operations service territories for the nine months ended September 30, 2017 was about 19% warmer than normal and about 12% warmer than 2016, resulting in decreased net revenues of $14.6 million for the nine months ended September 30, 2017 compared to 2016.

~~Throughput~~

~~Total volumes sold and transported for the third quarter of 2017 were 169.1 MMDth, compared to 167.8 MMDth for 2016.~~

~~Total volumes sold and transported for the nine months ended September 30, 2017 were 682.8 MMDth, compared to 705.2 MMDth for 2016. This 3% decrease~~2023, is primarily attributable to increased industrial usage.

Commodity Price Impact

Cost of energy for the ~~effects~~Columbia Operations segment is principally comprised of ~~warmer weather in 2017.~~

~~Economic Conditions~~

the cost of natural gas used while providing transportation and distribution services to customers. All ~~NiSource Gas Distribution~~Columbia Operations companies have state-approved recovery mechanisms that provide a means for full recovery of prudently incurred gas costs. ~~Gas~~These are tracked costs that are ~~treated as pass-through costs~~passed through directly to the customer, and ~~have no impact on~~ the ~~net revenues recorded in the period. The~~ gas costs included in revenues are matched with the gas cost expense recorded in the ~~period and the~~period. The difference is recorded on the Condensed Consolidated Balance Sheets (unaudited) as under-recovered or over-recovered gas cost to be included in future customer billings.

~~At NIPSCO, sales~~ Therefore, increases in these tracked operating expenses are offset by increases in operating revenues and customer billings are adjusted for amounts related to under and over-recovered purchased gas costs from prior periods per regulatory order. These amounts are primarily reflected in the “Other” gross revenues statistic provided at the beginning of this segment discussion. The adjustments to other gross revenues for the quarter ended September 30, 2017 and 2016 were a revenue decrease of $0.3 million and a revenue increase of $4.4 million, respectively. The adjustments to other gross revenues for the nine months ended September 30, 2017 and 2016 were a revenue decrease of $29.3 million and a revenue increase of $15.2 million, respectively.have essentially no impact on net income.

Certain ~~Gas Distribution~~of the Columbia Operations companies continue to offer choice opportunities, where customers can choose to purchase gas from a third-party supplier, through regulatory initiatives in their respective jurisdictions. ~~These programs serve to further reduce NiSource's exposure to gas prices.~~

Table of Contents

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

NiSource Inc.

~~Electric~~Columbia Operations

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2017 2016 2017 vs. 2016 2017 2016 2017 vs. 2016
Net Revenues
Sales revenues $ 486.0
$ 465.8
$ 20.2
$ 1,366.1
$ 1,249.8
$ 116.3
Less: Cost of sales (excluding depreciation and amortization) 139.0
142.0
(3.0 ) 400.9
380.0
20.9
Net Revenues 347.0
323.8
23.2
965.2
869.8
95.4
Operating Expenses

Operation and maintenance 136.7
127.6
9.1
422.1
372.1
50.0
Depreciation and amortization 69.8
66.9
2.9
212.0
202.8
9.2
Other taxes 16.1
16.5
(0.4 ) 44.8
43.4
1.4
Total Operating Expenses 222.6
211.0
11.6
678.9
618.3
60.6
Operating Income $ 124.4
$ 112.8
$ 11.6
$ 286.3
$ 251.5
$ 34.8
Revenues

Residential $ 138.0
$ 145.1
$ (7.1 ) $ 363.7
$ 346.1
$ 17.6
Commercial 134.6
127.1
7.5
379.0
336.2
42.8
Industrial 171.5
155.8
15.7
531.4
469.4
62.0
Wholesale 3.7
3.7
—
9.0
8.8
0.2
Other 38.2
34.1
4.1
83.0
89.3
(6.3 )
Total $ 486.0
$ 465.8
$ 20.2
$ 1,366.1
$ 1,249.8
$ 116.3
Sales (Gigawatt Hours)

Residential 1,002.3
1,147.5
(145.2 ) 2,523.9
2,744.9
(221.0 )
Commercial 1,042.7
1,102.8
(60.1 ) 2,868.1
2,954.8
(86.7 )
Industrial 2,390.9
2,356.3
34.6
7,192.7
7,072.2
120.5
Wholesale 6.1
2.3
3.8
28.0
3.6
24.4
Other 31.2
39.7
(8.5 ) 96.3
104.8
(8.5 )
Total 4,473.2
4,648.6
(175.4 ) 12,709.0
12,880.3
(171.3 )
Cooling Degree Days 540
681
(141 ) 765
966
(201 )
Normal Cooling Degree Days 570
570

745
799

% Warmer (Colder) than Normal (5 )% 19 %

3 % 21 %

Electric Customers
Residential 407,998
405,895
2,103
Commercial 55,912
55,418
494
Industrial 2,311
2,341
(30 )
Wholesale 740
742
(2 )
Other 2
2
—
Total 466,963
464,398
2,565

Net revenues are calculated as gross revenues less the associated cost of sales (excluding depreciation and amortization). Cost of sales at the Electric Operations segment is principally comprised of the cost of coal, related handling costs, natural gas purchasedThe underlying reasons for changes in our operating expenses for the internal generation of electricity at NIPSCO and the cost of power purchased from third-party generators of electricity. The majority of the cost of sales are tracked costs that are passed through directlythree months ended March 31, 2024 compared to the ~~customer resulting~~same period in ~~an equal and offsetting amount reflected in gross revenues.~~2023 are presented below.

Comparability of line item operating results may also be impacted by regulatory and depreciation trackers (other than those for cost of sales) that allow for the recovery in rates of certain costs. Therefore, increases in these tracked operating expenses are offset by increases in net revenues and have essentially no impact on income from continuing operations.


	Favorable (Unfavorable)
Changes in Operating Expenses (in millions)	Three Months Ended March 31, 2024 vs 2023
Higher employee and administrative related expenses	$	(13.7)



Higher depreciation and amortization expense	(10.6)
Higher property tax	(2.6)



Higher outside services expenses	(2.4)


Other	(4.4)
Change in operating expenses (before cost of energy and other tracked items)	$	(33.7)
Operating expenses offset in operating revenue
Lower cost of energy billed to customers	109.4

Lower tracker deferrals within operation and maintenance, depreciation, and tax	29.5
Total change in operating expense	$	105.2

Table of Contents

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

NiSource Inc.

~~Electric~~NIPSCO Operations

~~Three~~Financial and operational data for the NIPSCO Operations segment, which services both gas and electric customers, for the three months ended ~~September 30, 2017 vs. September 30, 2016 Operating Income~~March 31, 2024 and 2023 are presented below.

~~For the third quarter~~


	Three Months Ended March 31,
(in millions)		2024		2023		Favorable (Unfavorable)

NIPSCO Operations
Operating Revenues		$	752.7	$	917.2	$	(164.5)


Operating Expenses
Cost of energy		196.2		426.8		230.6
Operation and maintenance		191.3		190.5		(0.8)
Depreciation and amortization		132.7		108.3		(24.4)

Other taxes		16.1		14.6		(1.5)
Total Operating Expenses		536.3		740.2		203.9
Operating Income		$	216.4	$	177.0	$	39.4

	Three Months Ended March 31,
(in millions)		2024		2023		Favorable (Unfavorable)
NIPSCO Electric
Revenues
Residential		$	143.8	$	150.4	$	(6.6)
Commercial		142.9		150.9		(8.0)
Industrial		116.1		134.4		(18.3)
Wholesale		6.4		2.6		3.8
Other		24.8		26.4		(1.6)
Total		$	434.0	$	464.7	$	(30.7)
Sales (GWh)
Residential		764.9		766.1		(1.2)
Commercial		878.7		856.2		22.5
Industrial		1,832.7		1,937.7		(105.0)
Wholesale		149.2		—		149.2
Other		23.4		22.8		0.6
Total		3,648.9		3,582.8		66.1




NIPSCO Electric Customers
Residential		428,035		425,090		2,945
Commercial		58,883		58,499		384
Industrial		2,120		2,133		(13)
Wholesale		708		708		—
Other		3		3		—
Total		489,749		486,433		3,316

Table of ~~2017, Electric~~Contents

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

NiSource Inc.

NIPSCO Operations ~~reported operating income~~



	Three Months Ended March 31,
(in millions)	2024			2023			Favorable (Unfavorable)
NIPSCO Gas
Revenues
Residential	$	212.1		$	302.4		$	(90.3)
Commercial	74.7			112.7			(38.0)
Industrial	23.8			31.5			(7.7)

Other	8.1			5.9			2.2
Total	$	318.7		$	452.5		$	(133.8)
Sales and Transportation Volumes (MMDth)
Residential	28.6			29.2			(0.6)
Commercial	17.7			17.7			—
Industrial	70.2			71.0			(0.8)


Total	116.5			117.9			(1.4)
Heating Degree Days	2,643			2,659			(16)
Normal Heating Degree Days	3,141			3,100			41
% (Warmer) than Normal	(16)		%	(14)		%
% (Warmer) than prior year	(1)		%
NIPSCO Gas Customers
Residential	797,326			791,030			6,296
Commercial	66,485			66,162			323
Industrial	2,784			2,860			(76)


Total	866,595			860,052			6,543

Comparability of ~~$124.4 million, an increase of $11.6 million from the comparable 2016 period.~~

~~Net revenues for the third quarter of 2017 were $347.0 million, an increase of $23.2 million from the same period in 2016. The change in net revenues was primarily driven by:~~

~~New rates from base-rate proceedings of $22.4 million.~~

~~Increased rates from incremental capital spend on electric transmission projects of $7.4 million.~~

~~Higher~~operation and maintenance expenses and depreciation and amortization may be impacted by regulatory and depreciation trackers ~~which are offset in expense, of $5.4 million.~~

~~Partially offset by:~~

•~~The effects of cooler weather of $10.8 million.~~

~~Operating expenses were $11.6 million higher~~that allow for the ~~third quarter~~recovery in rates of ~~2017~~certain costs.

Table of Contents

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

NiSource Inc.

NIPSCO Operations

The underlying reasons for changes in our operating revenues for the three months ended March 31, 2024 compared to the same period in ~~2016. This change was primarily driven by:~~2023 are presented below.

~~Higher regulatory and depreciation trackers, which are offset~~


	Favorable (Unfavorable)
Changes in Operating Revenues (in millions)		Three Months Ended March 31, 2024 vs 2023


New rates from base rate proceedings, regulatory capital and DSM programs		65.6
Renewable Joint Venture revenue, fully offset by Joint Venture operating expense and noncontrolling interest net income (loss)		4.0
Increased customer usage		3.9

Increased customer count		2.7

The effects of weather in 2024 compared to 2023		(5.7)
Other		(2.3)
Change in operating revenues (before cost of energy and other tracked items)		$	68.2
Operating revenues offset in operating expense
Lower cost of energy billed to customers		(230.7)

Lower tracker deferrals within operation and maintenance, depreciation and tax		(2.0)
Total change in operating revenues		$	(164.5)

Weather

The results of ~~$5.4 million.~~

~~Increased employee and administrative expenses of $4.0 million.~~

~~Nine months ended September 30, 2017 vs. September 30, 2016 Operating Income~~

~~For the nine months ended September 30, 2017, Electric Operations reported operating income of $286.3 million, an increase of $34.8 million from the comparable 2016 period.~~

~~Net revenues~~operations for the ~~nine months ended September 30, 2017 were $965.2 million, an increase of $95.4 million~~NIPSCO Operations segment include income from ~~the same period in 2016. The change in net revenues was primarily driven by:~~

~~New rates from base-rate proceedings of $64.5 million.~~

~~Higher regulatory~~both electric and ~~depreciation trackers, which are offset in expense, of $25.8 million.~~

~~Increased rates from incremental capital spend on electric transmission projects of $18.2 million.~~

~~Partially offset by:~~

~~The effects of cooler weather of $17.3 million.~~

~~Operating expenses were $60.6 million higher for the nine months ended September 30, 2017 compared to the same period in 2016. This change was primarily driven by:~~

~~Higher regulatory and depreciation trackers, which are offset in net revenues, of $25.8 million.~~

~~Increased outside~~gas service ~~costs of $13.9 million, primarily due to vegetation management activities and generation-related maintenance.~~

~~Higher employee and administrative expenses of $8.3 million.~~

~~Increased materials and supplies expenses of $8.0 million driven by generation-related maintenance and increased chemical usage.~~

~~Higher gross receipts taxes of $5.0 million driven by higher revenues.~~

~~Partially offset by:~~

~~Decreased amortization expense of $10.8 million.~~

~~Weather~~

lines. In general, ~~NiSource calculates~~we calculate the weather-related revenue variance based on changing customer demand driven by weather variance from normal ~~heating or~~ cooling degree ~~days. NiSource's~~days and normal heating degree days, net of weather normalization mechanisms. Our composite cooling and heating ~~or cooling~~ degree days reported do not directly correlate to the weather-related dollar impact on the results of ~~Electric~~NIPSCO Operations. ~~Heating or cooling~~Cooling and heating degree days experienced during different times of the year or in different operating locations may have more or less impact on volume and dollars depending on when they occur. When the detailed results are combined for reporting, there may be weather-related dollar impacts on operations when there is not an apparent or significant change in ~~the~~our aggregated ~~NiSource~~ composite cooling and heating ~~or cooling~~ degree day comparison.

~~Table of Contents~~Sales

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

~~NiSource Inc.~~

~~Electric Operations~~

~~Weather~~The increase in ~~the Electric Operations’ territories~~total volumes sold to electric customers for the ~~third quarter of 2017 was about 5% cooler than normal and about 24% cooler than 2016, resulting in decreased net revenues of $10.8 million for the quarter ended September 30, 2017 compared to 2016.~~

~~Weather in the Electric Operations’ territories for the nine~~three months ended ~~September 30, 2017 was about 3% warmer than normal and about 18% cooler than 2016, resulting in decreased net revenues of $17.3 million for the nine months ended September 30, 2017 compared to 2016.~~

~~Sales~~

~~Electric Operations sales for the third quarter of 2017 were 4,473.2 gwh, a decrease of 175.4 gwh~~March 31, 2024 compared to the same period in ~~2016. The 4% decrease is~~2023 was primarily attributable to ~~decreased~~increased usage by commercial and wholesale customers partially offset by industrial and residential ~~sales from the cooler weather~~customers usage.

The decrease in ~~the current year.~~

~~Electric Operations sales~~total volumes sold to gas customers for the ~~nine~~three months ended ~~September 30, 2017 were 12,709.0 gwh, a decrease of 171.3 gwh~~March 31, 2024 compared to the same period in ~~2016. The 1% decrease is~~2023 was primarily ~~attributed~~attributable to decreased usage by industrial and residential ~~sales~~customers.

Commodity Price Impact

Cost of energy for the NIPSCO Operations segment's electric activities is principally comprised of the cost of coal, natural gas purchased for internal generation of electricity, and the cost of power purchased from ~~cooler weather in~~generators of electricity for its generation and transmission activities. For its gas distribution activities, NIPSCO Operations' cost of energy is principally comprised of the ~~current year.~~

~~Economic Conditions~~

cost of natural gas used while providing transportation and distribution services to customers. NIPSCO Operations has a state-approved recovery ~~mechanism~~mechanisms that ~~provides~~provide a means for full recovery of prudently incurred ~~fuel costs. Fuel~~ costs of energy. The majority of these costs of energy are ~~treated as pass-through~~passed through directly to the customer, and the costs ~~and have no impact on~~of energy included in operating revenues are matched with the ~~net revenues~~cost of energy expense recorded in the period. The ~~fuel costs included in revenues are matched with the fuel cost expense recorded in the period and the~~ difference is recorded on the Condensed Consolidated Balance Sheets (unaudited) as under-recovered or over-recovered fuel ~~cost~~and gas costs to be included in future customer billings.

~~At NIPSCO, sales~~ Therefore, increases in these tracked operating expenses are offset by increases in operating revenues and ~~customer billings are adjusted~~have essentially no impact on net income.

The underlying reasons for ~~amounts related to under and over-recovered purchased fuel costs from prior periods per regulatory order. These amounts are primarily reflected~~changes in ~~the “Other” gross revenues statistic provided at the beginning of this segment discussion. The adjustments to other gross revenues~~our operating expenses for the ~~quarter ended September 30, 2017 and 2016 were a revenue increase of $7.8 million and $16.1 million, respectively. The adjustments to other gross revenues for the nine~~three months ended ~~September 30, 2017 and 2016 were a revenue increase of $6.9 million and $34.5 million, respectively.~~

~~Electric Supply~~

~~NIPSCO 2016 Integrated Resource Plan.~~ Environmental, regulatory and economic factors, including low natural gas prices and aging coal-fired units, have led NIPSCO to consider modifying its current electric generation supply mix to include less coal-fired generation. Due to enacted CCR and ELG (subsequently postponed) legislation, NIPSCO would expect to incur over $1 billion in operating, maintenance, environmental and other costs over the next seven years if the current fleet of coal-fired generating units remain operational.

On November 1, 2016, NIPSCO submitted its 2016 Integrated Resource Plan with the IURC. The plan evaluated demand-side and supply-side resource alternatives to reliably and cost effectively meet NIPSCO customers' future energy requirements over the ensuing 20 years. The 2016 Integrated Resource Plan indicates that the most viable option for customers and NIPSCO involves the retirement of Bailly Generating Station (Units 7 and 8) as soon as mid-2018 and two units (Units 17 and 18) at the R.M. Schahfer Generating Station by the end of 2023. It is projected over the long term that the cost to customers to retire these units at these dates will be lower than maintaining and upgrading them for continuing generation.

~~NiSource and NIPSCO committed~~March 31, 2024 compared to the ~~retirement of the Bailly Generating Station units~~same period in connection with the filing of the 2016 Integrated Resource Plan, pending approval by the MISO. In the fourth quarter of 2016, the MISO approved NIPSCO's plan to retire the Bailly Generating Station units by May 31, 2018.2023 are presented below.

In connection with the MISO's approval of NIPSCO's planned retirement of the Bailly Generating Station units, NiSource recorded $22.1 million of plant retirement-related charges in the fourth quarter of 2016. These charges were comprised of contract termination charges related to NIPSCO's capital lease with Pure Air, voluntary employee severance benefits and write downs of certain materials and supplies inventory balances. Refer to Note 14-D, "Other Matters," in the Notes to Condensed Consolidated Financial Statements (unaudited) for information.

Table of Contents

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

NiSource Inc.

NIPSCO Operations


	Favorable (Unfavorable)
Changes in Operating Expenses (in millions)		Three Months Ended March 31, 2024 vs 2023

Higher depreciation and amortization expense driven by new base rates		(20.0)

Higher employee and administrative expenses		(9.5)
Renewable Joint Venture operating expenses, partially offset by Joint Venture operating revenues		(9.3)
Lower materials and supplies costs		4.4



Lower outside services expenses primarily related to lower generation-related maintenance		2.0
Other		3.6
Change in operating expenses (before cost of energy and other tracked items)		$	(28.8)
Operating expenses offset in operating revenue
Lower cost of energy billed to customers		230.7


Lower tracker deferrals within operation and maintenance, depreciation and tax		2.0
Total change in operating expense		$	203.9

~~Liquidity~~Electric Supply and Generation Transition

NIPSCO continues to execute on an electric generation transition consistent with the 2018 Plan and 2021 Plan, which outlines the path to retire the remaining two coal units at R.M. Schahfer by the end of 2025 and the remaining coal-fired generation at Michigan City by the end of 2028, to be replaced by lower-cost, reliable and cleaner options. See "Project Status" discussion, below, and "Liquidity and Capital ~~Resources~~Resources" in this Management's Discussion for information on anticipated in-service dates related to our electric generation transition and additional information on our capital investment spend.

~~Operating Activities~~NIPSCO continues to work with the EPA to obtain an administrative approval associated with the operation of R.M. Schahfer’s remaining two coal units until 2025. In the event that the approval is not obtained, future operations could be impacted. We cannot estimate the financial impact on us if this approval is not obtained. Refer to Item 1A. Risk Factors, "Operational Risks," of the 2023 Annual Report on Form 10-K for further detail.

~~Net cash from operating activities from continuing operations for~~The current replacement plan is aligned with the ~~nine months ended September 30, 2017 was $529.5 million, a decrease~~Preferred Energy Resource Plan outlined in the 2021 Plan and primarily includes renewable sources of ~~$3.3 million compared~~energy, including wind, solar, battery storage, and flexible natural gas resources to ~~the nine months ended September 30, 2016. This decrease was driven by pension plan contributions in 2017 partially offset by~~be obtained through a combination of ~~changes~~NIPSCO ownership and PPAs. NIPSCO has sold, and may in ~~weather,~~the future sell, renewable energy credits from its renewable generation to third parties to offset customer costs. NIPSCO has executed several PPAs to purchase 100% of the output from renewable generation facilities at a fixed price per MWh. Each facility supplying the energy will have an associated nameplate capacity, and payments under the PPAs will not begin until the associated generation facility is constructed by the owner/seller. NIPSCO has also executed several BTAs with developers to construct renewable generation facilities.

Since 2020, two wind PPA projects, two wind BTA projects and two solar BTA projects have been placed into service, totaling 1,465 MW of nameplate capacity. NIPSCO has executed commercial agreements for each of the eight remaining identified projects. Dunns Bridge II, Cavalry, Fairbanks, Gibson, GreenRiver, Appleseed, Carpenter and Templeton have received IURC approval. NIPSCO has filed for a new gas ~~prices and the related approved rates for recovery, which significantly impacted regulatory assets and regulatory liabilities between the two periods.~~

~~Regulatory Assets and Liabilities.~~ ~~During the nine months ended September 30, 2016, over-collected gas costs from 2015 were returned to customers resulting in a use of cash. In 2017, less cash was required~~peaking facility to be ~~returned~~located at R.M. Schahfer Generating Station. On November 22, 2023 the IURC approved NIPSCO's request to ~~customers because~~convert the ~~balance of over-collected gas costs~~Gibson project from ~~2016 was smaller than in 2015.~~

~~Pension and Other Postretirement Plan Funding.~~ ~~For the nine months ended September 30, 2017, NiSource contributed $281.6 million to its pension plans (including~~ a $277 million discretionary contribution made during the third quarter of 2017) and $21.8 million to its other postretirement benefit plans. Given the current funded status of the pension plans (and barring unforeseen market volatility that would negatively impact the valuation of its plan assets), NiSource does not believe material contributions to its pension plans will be required for the foreseeable future.

~~NiSource will continue to contribute to its other postretirement plans. In total, NiSource expects to contribute $25.3 million to these plans in 2017.~~

~~For the nine months ended September 30, 2016, NiSource contributed $2.7 million to its pension plans and $18.6 million to its other postretirement benefit plans.~~

~~Income Taxes.~~ ~~As of September 30, 2017, NiSource has a recorded deferred tax asset of $818.1 million related~~PPA to a ~~Federal NOL carryforward. As a result of being in an NOL position, NiSource was not required to make any cash payments for Federal income tax purposes during~~BTA. On January 17, 2024 the ~~nine months ended September 30, 2017 or 2016. This NOL carryforward expires in 2030; however, NiSource expects to fully utilize the carryforward benefit prior to its expiration.~~

~~Investing Activities~~

~~Net cash used for investing activities for the nine months ended September 30, 2017 was $1,306.1 million, an increase of $137.9 million compared~~IURC approved increases to the ~~nine months ended September 30, 2016. This increase was mostly attributable to increased capital expenditures in 2017.~~

NiSource’s capital expenditures for the nine months ended September 30, 2017 were $1,216.4 million compared to $1,083.4 million for the comparable period in 2016. The increase in capital spend was driven by favorable weather conditions in 2017 which allowed for extended periods of constructionproject costs as well as ~~an increase~~the full ownership of Cavalry and Dunns Bridge II, allowing NIPSCO to leverage provisions of the IRA to monetize tax credits for the benefit of customers in ~~planned capital expenditures~~lieu of utilizing tax equity partnerships. In March 2024, we filed with the IURC to modify the ownership structure for Gibson and Fairbanks solar projects to become fully owned projects and to modify the cost of the Fairbanks project. See "Executive Summary - Energy Transition" in this Management's Discussion for additional information. We expect the ~~current year. NiSource~~majority of our remaining BTA and PPA projects ~~total 2017 capital expenditures~~ to be ~~approximately $1.6 to $1.7 billion.~~placed in service in 2024 and 2025.

~~Financing Activities~~

~~Common Stock.~~ Refer to Note 4, “Common Stock,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on common stock activity, including cash received for the issuance of common stock under NiSource's ATM program.

~~Long-term Debt.~~ Refer to Note 12, “Long-Term Debt,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on long-term debt activity, including cash paid for debt extinguishment premiums and other issuance costs.

~~Short-term Debt.~~ ~~Refer to Note 13, “Short-Term Borrowings,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on short-term debt activity.~~

~~Net Available Liquidity.~~ As of September 30, 2017, an aggregate of $1,275.3 million of net liquidity was available, including cash and credit available under the revolving credit facility and accounts receivable securitization programs.

Table of Contents

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

NiSource Inc.

NIPSCO Operations

Remaining Renewables Projects

Transaction Type

Technology

Nameplate Capacity (MW)

Storage Capacity (MW)

Cavalry

BTA

Solar & Storage

200

Dunns Bridge II

BTA

Solar & Storage

435

Fairbanks

BTA

Solar

250

—

Gibson

BTA

Solar

200

—

Green River

20 year PPA

Solar

200

—

Templeton

20 year PPA

Wind

200

—

Carpenter

20 year PPA

Wind

200

—

Appleseed

20 year PPA

Solar

200

—

Table of Contents

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

NiSource Inc.

Liquidity and Capital Resources

We continually evaluate the availability of adequate financing to fund our ongoing business operations, working capital and core safety and infrastructure investment programs. Our financing is sourced through cash flow from operations and the issuance of debt and/or equity. External debt financing is provided primarily through the issuance of long-term debt, accounts receivable securitization programs and our $1.85 billion commercial paper program, which is backstopped by our committed revolving credit facility with a total availability from third-party lenders of $1.85 billion.

•On December 31, 2023, we consummated the NIPSCO Minority Interest Transaction in exchange for a capital contribution of $2.16 billion in cash. See Note 4, "Noncontrolling Interests,"in the Notes to the Condensed Consolidated Financial Statements (unaudited) for more information.

•On January 3, 2024, we applied the proceeds from the NIPSCO Minority Interest Transaction and repaid in full our $1.0 billion term credit agreement and our $650.0 million term credit agreement. On March 14, 2024 we completed the issuance and sale of $650.0 million of 5.35% senior unsecured notes maturing in 2034, which resulted in approximately $642.6 million of net proceeds after discount and debt issuance costs. See Note 7, "Short-Term Borrowings," and Note 8, "Long-Term Debt," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for more information.

•On February 22, 2024, we entered into an ATM equity program that provides an opportunity to issue and sell shares of our common stock up to an aggregate issuance of $900.0 million through December 31, 2025. As of March 31, 2024, the ATM program (including the impact of the forward sale agreement) had approximately $700.0 million of equity available for issuance. See Note 6, "Equity," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for more information.

•On March 15, 2024, we redeemed all 20,000 outstanding shares of Series B Preferred Stock for a redemption price of $25,000 per share and all 20,000 outstanding shares of Series B-1 Preferred Stock for a redemption price of $0.01 per share or $500.0 million in total. See Note 6, "Equity," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for more information.

We believe these sources provide adequate capital to fund our operating activities and capital expenditures in 2024 and beyond.

The following table summarizes our cash flow activities:


	Three Months Ended March 31,
(in millions)	2024		2023		Change in 2024 vs 2023
Cash from (used for):
Operating Activities	$	456.2	$	683.4	$	(227.2)
Investing Activities	(723.0)		(727.8)		4.8
Financing Activities	(1,873.8)		117.3		(1,991.1)

Operating Activities

The decrease in cash from operating activities was primarily driven by year over year change in accounts receivable collections, inventory and exchange gas receivables due to the impact of lower gas prices, partially offset by higher accounts payables and net income.

Investing Activities

Investing activities have been consistent year over year, and is primarily comprised of capital expenditures related to system growth and reliability and milestone payments to renewable generation asset developers for certain of our BTA projects.

As we evaluate progress on the renewable generation projects, we remain on track to make capital investments totaling $3.3 billion to $3.5 billion during the 2024 period. We also expect to invest approximately $16.4 billion during the 2024-2028 period, including capital investments to support our generation transition strategy. These forecasted capital investments are subject to continuing review and adjustment. Actual capital expenditures may vary from these estimates.

Table of Contents

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

NiSource Inc.

Regulatory Capital Programs. We are in the process of upgrading and modernizing our gas infrastructure to enhance safety and reliability by reducing leaks. An ancillary benefit of these programs is the reduction of GHG emissions. In 2024, we continue to move forward on core infrastructure and environmental investment programs supported by complementary regulatory and customer initiatives across all six states of our operating area.

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

IRP - 2024

753.5

4/21-12/23

2/26/2024

Replacement of hazardous service lines, cast iron, wrought iron, uncoated steel, and bare steel pipe.

Columbia of Ohio(2)

PHMSA IRP - 2024

14.6

1/23-12/23

2/28/2024

Investments necessary to comply with the PHMSA Mega Rule.

Columbia of Ohio

CEP - 2023

482.1

4/21-12/22

2/24/2023

Assets not included in the IRP.

NIPSCO - Gas

TDSIC - 7

444.9

1/23-8/23

10/31/2023

New or replacement projects undertaken for the purpose of safety, reliability, system modernization or economic development.

NIPSCO - Gas

FMCA - 2

49.0

1/23-9/23

11/29/2023

Project costs to comply with federal mandates.

Columbia of Virginia

SAVE - 2024

166.5

10/22-12/24

8/15/2023

Replacement projects that (1) enhance system safety or reliability, or (2) reduce, or potentially reduce, greenhouse gas emissions. Includes costs associated with Advanced Leak Detection and Repair.

Columbia of Kentucky

SMRP - 2023

41.6

1/23-12/23

10/14/2022

Replacement of mains and inclusion of system safety investments.

NIPSCO - Electric(3)

TDSIC - 3

144.8

7/22-1/23

3/28/2023

New or replacement projects undertaken for the purpose of safety, reliability, system modernization or economic development.

Pending Commission Approval

NIPSCO - Gas

TDSIC - 8

514.1

1/23-2/24

4/30/2024

New or replacement projects undertaken for the purpose of safety, reliability, system modernization or economic development.

Columbia of Ohio

CEP - 2024

767.0

4/21-12/23

2/26/2024

Assets not included in the IRP or PHMSA IRP.

Columbia of Kentucky(4)

SMRP - 2024

81.9

1/23-12/24

10/13/2023

Replacement of mains and inclusion of system safety investments.

(1)Programs do not include any costs already included in base rates.

(2) Columbia of Ohio received a final order with rates effective May 2024.

(3)Coincident with the implementation of Step 1 and Step 2 base rates in Cause No. 45772, TDSIC-3 cumulative capital investment of $554.7 million at Step 1 and $74.2 million at Step 2 moved out of this tracker and into base rates.

(4)Columbia of Kentucky placed these rates into effect, as of January 3, 2024, subject to refund, depending on a Commission order ruling on the Application.

Financing Activities

Common Stock and Preferred Stock. Refer to Note 6, "Equity," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for information on common and preferred stock.

Long-Term Debt. Refer to Note 8, "Long-Term Debt," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for information on long-term debt activity.

Short-Term Debt. Refer to Note 7, "Short-Term Borrowings," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for information on short-term debt activity.

Noncontrolling Interest. We received $2.16 billion upon closing the NIPSCO Minority Interest Transaction. Proceeds from the closing of the NIPSCO Minority Interest Transaction were used to repay short-term debt, including our credit agreements. Under the terms of the LLC Agreement, BIP is obligated to provide up to $250 million in additional capital contributions over a three-year period after the Closing, which obligation is backed by an Equity Commitment Letter from Blackstone. BIP may contribute additional capital above $250 million as necessary to maintain its percentage ownership interest. Refer to Note 4,

Table of Contents

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

NiSource Inc.

"Noncontrolling Interests," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for information on contributions from noncontrolling interest activity.

Sources of Liquidity

The following table displays ~~NiSource's~~our liquidity position as of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016:~~2023:


(in millions)	March 31, 2024		December 31, 2023
Current Liquidity
Revolving Credit Facility	$	1,850.0	$	1,850.0
Accounts Receivable Programs(1)	419.8		383.9
Less:

Commercial Paper	1,222.3		1,061.0
Accounts Receivable Programs Utilized	—		337.6
Letters of Credit Outstanding Under Credit Facility	9.9		9.9
Add:
Cash and Cash Equivalents	102.2		2,245.4
Net Available Liquidity	$	1,139.8	$	3,070.8

(in millions) September 30, 2017 December 31, 2016
Current Liquidity
Revolving Credit Facility $ 1,850.0
$ 1,850.0
Accounts Receivable Program⁽¹⁾
262.2
310.0
Less:
Drawn on Revolving Credit Facility —
—
Commercial Paper 581.0
1,178.0
Accounts Receivable Program Utilized 262.2
310.0
Letters of Credit Outstanding Under Credit Facility 13.0
14.7
Add:
Cash and Cash Equivalents 19.3
26.4
Net Available Liquidity $ 1,275.3
$ 683.7

⁽¹⁾Represents the lesser of the seasonal limit or maximum borrowings supportable by the underlying receivables.

Debt Covenants. ~~NiSource is~~We are subject to a financial ~~covenants~~covenant under ~~its~~our revolving credit facility, ~~and term loan agreement,~~ which require ~~NiSource~~us to maintain a debt to capitalization ratio that does not exceed ~~70%. A similar covenant in a 2005 private placement note purchase agreement requires NiSource to maintain a debt to capitalization ratio that does not exceed 75%~~70.0%. As of ~~September 30, 2017,~~March 31, 2024, the ratio was ~~66.5%~~57.0%.

~~Sale of Trade Accounts Receivables.~~ ~~Refer to Note 8, “Transfers of Financial Assets,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on the sale of trade accounts receivable.~~

Credit Ratings. The credit rating agencies periodically review ~~the Company’s~~our ratings, taking into account factors such as ~~its~~our capital structure and earnings profile. The following table includes ~~NiSource's~~our and ~~certain subsidiaries'~~NIPSCO's credit ratings and ratings outlook as of ~~September 30, 2017. Aside from those disclosed below, there~~March 31, 2024. There were no changes to the below credit ratings or outlooks since ~~December 31, 2016.~~February 2020.

A credit rating is not a recommendation to buy, sell, or hold securities, and may be subject to revision or withdrawal at any time by the assigning rating organization.

S&P

Moody's

Fitch

Rating

Outlook

Rating

Outlook

Rating

Outlook

NiSource

~~S&P~~BBB+

~~Moody's~~Stable

~~Fitch~~Baa2

Stable

BBB

Stable

NIPSCO

~~Rating~~BBB+

~~Outlook~~Stable

~~Rating~~Baa1

~~Outlook~~Stable

~~Rating~~BBB

~~Outlook~~Stable

~~NiSource~~⁽¹⁾

~~BBB+~~

~~Stable~~

~~Baa2~~

~~Stable~~

~~BBB~~

~~Stable~~

~~NiSource Finance~~

~~BBB+~~

~~Stable~~

~~Baa2~~

~~Stable~~

~~BBB~~

~~Stable~~

~~Capital Markets~~

~~BBB+~~

~~Stable~~

~~Baa2~~

~~Stable~~

~~BBB~~

~~Stable~~

~~NIPSCO~~

~~BBB+~~

~~Stable~~

~~Baa1~~

~~Stable~~

~~BBB~~

~~Stable~~

~~Columbia of Massachusetts~~

~~BBB+~~

~~Stable~~

~~Baa2~~

~~Stable~~

~~Not rated~~

Commercial Paper

A-2

Stable

P-2

Stable

F3F2

Stable

⁽¹⁾~~In April 2017, Moody's assigned a Baa2 senior unsecured rating to NiSource, with a stable outlook.~~

Certain ~~NiSource~~of our subsidiaries have agreements that contain ~~“ratings triggers”~~''ratings triggers'' that require increased collateral if our credit rating or the credit ratings of ~~NiSource or~~ certain of ~~its~~our subsidiaries are below investment grade. These agreements are primarily for insurance purposes and for the physical purchase or sale of power. As of ~~September 30, 2017,~~March 31, 2024, the collateral requirement that would be required in the event of a downgrade below the ratings trigger levels would amount to approximately ~~$42.9~~$108.6 million. In addition to agreements with ratings triggers, there are other agreements that contain ~~“adequate assurance”~~''adequate assurance'' or ~~“material~~''material adverse ~~change”~~change'' provisions that could necessitate additional credit support such as letters of credit and cash collateral to transact business.

Equity. ~~NiSource has a shelf registration statement on file with the SEC that authorizes NiSource to issue an indeterminate amount of common stock and preferred stock, as well as other securities. The~~Our authorized capital stock ~~of NiSource~~ consists of ~~420,000,000~~770,000,000 shares, $0.01 par value, of which ~~400,000,000~~750,000,000 are common stock and 20,000,000 are preferred stock. As of ~~September 30, 2017, 336,691,078~~March 31, 2024, 448,197,604 shares of common stock were outstanding. ~~NiSource has no preferred stock outstanding as of September 30, 2017.~~

~~Table of Contents~~

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

~~NiSource Inc.~~

Contractual Obligations. ~~Aside from~~A summary of contractual obligations is included in the ~~previously referenced issuances and repayments of long-term~~Company's Annual Report on Form 10-K for the year ended December 31, 2023. Except for our March 2024 debt issuance, there were no additional material changes ~~recorded~~from year-end during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2024. Refer to ~~NiSource’s contractual obligations as of December 31, 2016.~~Note 8, "Long-Term Debt," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for additional information regarding the debt issuances.

Guarantees, Indemnities and Other Off Balance Sheet ~~Arrangements~~

~~As a part~~Arrangements. We and certain of ~~normal business, NiSource and certain~~our subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of certain ~~subsidiaries.~~subsidiaries as a part of normal

Table of Contents

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

NiSource Inc.

business. Such agreements include guarantees and stand-by letters of credit.

Refer to Note ~~14, “Other~~15, "Other Commitments and Contingencies,”" in the Notes to the Condensed Consolidated Financial Statements (unaudited) for additional information about such arrangements.

Table of Contents

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

NiSource Inc.

Regulatory, Environmental and Safety Matters

Cost Recovery and Trackers

Comparability of our line item operating results is impacted by regulatory trackers that allow for the recovery in rates of certain costs such as those described below. Increases in the expenses that are subject to approved regulatory tracker mechanisms generally lead to increased regulatory assets, which ultimately result in a corresponding increase in operating revenues and, therefore, have essentially no impact on total operating income results. Certain approved regulatory tracker mechanisms allow for abbreviated regulatory proceedings in order for the operating companies to quickly implement revised rates and recover associated costs.

A portion of the Columbia Operations and NIPSCO Operations revenue is related to the recovery of gas costs, the review and recovery of which occurs through standard regulatory proceedings. All states in our operating area require periodic review of actual gas procurement activity to determine prudence and to confirm the recovery of prudently incurred energy commodity costs supplied to customers.

We recognize that energy efficiency reduces emissions, conserves natural resources and saves our customers money. Our gas distribution companies offer programs such as energy efficiency upgrades, home checkups and weatherization services. The increased efficiency of natural gas appliances and improvements in home building codes and standards contributes to a long-term trend of declining average use per customer. While we are looking to expand offerings so the energy efficiency programs can benefit as many customers as possible, our Columbia Operations and NIPSCO Operations have pursued changes in rate design to more effectively match recoveries with costs incurred. Columbia of Ohio has adopted a straight fixed variable rate design for residential customers that closely links the recovery of fixed costs with fixed charges. Columbia of Maryland and Columbia of Virginia have regulatory approval for weather and revenue normalization adjustments for certain customer classes, which adjust monthly revenues that exceed or fall short of approved levels. Columbia of Pennsylvania continues to operate its pilot residential weather normalization adjustment and also has a fixed customer charge. This weather normalization adjustment only adjusts revenues when actual weather compared to normal varies by more than 3%. Columbia of Kentucky incorporates a weather normalization adjustment for certain customer classes and also has a fixed customer charge.

A portion of the NIPSCO Operations revenue is related to the recovery of fuel costs to generate power and the fuel costs related to purchased power. These costs are recovered through a FAC, which is updated quarterly to reflect actual costs incurred to supply electricity to customers.

While increased efficiency of electric appliances and improvements in home building codes and standards has similarly impacted the average use per electric customer in recent years, NIPSCO Operations expects future growth in per customer usage as a result of increasing electric applications. Further growth is anticipated as electric vehicles become more prevalent. These ongoing changes in use of electricity will likely lead to development of innovative rate designs, and NIPSCO Operations will continue efforts to design rates that increase the certainty of recovery of fixed costs.

Table of Contents

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

NiSource Inc.

Regulatory, Environmental and Safety Matters

Rate Case Actions

The following table describes current rate case actions as applicable in each of our jurisdictions net of tracker impacts:


(in millions)
Company	Approved ROE		Requested Incremental Revenue		Approved Incremental Revenue		Filing Date	Rates Effective
Approved Rate Cases

Columbia of Pennsylvania(1)	None specified		$	82.2	$	44.5	March 18, 2022	December 2022

Columbia of Maryland(1)	None specified		$	6.5	$	3.9	May 12, 2023	December 2023
Columbia of Kentucky(2)	9.35	%	$	26.7	$	18.3	May 28, 2021	January 2022
Columbia of Virginia(3)	None specified		$	40.5	$	25.8	April 29, 2022	October 2022
Columbia of Ohio	9.60	%	$	221.4	$	68.3	June 30, 2021	March 2023
NIPSCO - Gas(4)	9.85	%	$	109.7	$	71.8	September 29, 2021	September 2022

NIPSCO - Electric(5)	9.80	%	$	291.8	$	261.9	September 19, 2022	August 2023
Pending Rate Cases
NIPSCO - Gas(6)	In process		$	161.9	In process		October 25, 2023	September 2024

Columbia of Pennsylvania	In process		$	124.1	In process		March 15, 2024	December 2024
Columbia of Virginia(7)	In process		$	37.2	In process		April 29, 2024	October 2024

(1)No approved ROE is identified for this matter since the approved revenue increase is the result of a black box settlement under which parties agree upon the amount of increase.

(2)The approved ROE for natural gas capital riders (e.g., SMRP) is 9.275%.

(3)Columbia of Virginia's rate case resulted in a black box settlement, representing a settlement to a specific revenue increase but not a specified ROE. The settlement provides use of a 9.70% ROE for future SAVE and filings.

(4)New rates were implemented in 2 steps, with implementation of Step 1 rates in September 2022. The Step 2 rates were filed on February 21, 2023, with rates effective March 2023.

(5) New rates will be implemented in 2 steps, with implementation of Step 1 rates in August 2023 and Step 2 rates effective in March 2024, with service provided in February 2024.

(6)On March 20, 2024, NIPSCO filed a unanimous settlement agreement that, if approved, will result in increased incremental revenue of $120.9 million. Pending the approval of the settlement agreement, new rates expected to be implemented in 2 steps, with implementation of Step 1 rates to be effective in September 2024 and Step 2 Rates in March 2025.

(7) Rates expected to be effective on an interim basis and subject to refund.

PHMSA Regulations

We are committed to reducing the environmental impact of our business and promoting sustained environmental stewardship. We seek proactive opportunities for improved environmental performance and are committed to complying with environmental laws and regulations. To fulfill our vision of being a trusted energy provider, we follow safety practices recommended by leading industry organizations. These practices help us identify and address potential risks, resulting in improvements to our operational and environmental safety.

PHMSA Legislation and Regulations

Under the Protecting Our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2020, PHMSA has revised, and continues to revise, the pipeline safety regulations to require operators to update, as needed, their existing distribution integrity management plans, emergency response plans, and operation and maintenance plans. PHMSA has also adopted new requirements for managing records and updating, as necessary, existing district regulator stations to eliminate common modes of failure that can lead to over-pressurization.

In May 2023, PHMSA proposed numerous regulatory revisions under the PIPES Act of 2020 to minimize methane emissions and improve public safety. Under these proposed revisions, our subsidiaries would be required to detect and repair an increased number of gas leaks, reduce the time to repair leaks, increase leak survey frequency, and expand our existing advanced leak detection program. We continue to evaluate the proposed rule for additional impacts on our business.

In September 2023, PHMSA proposed additional regulatory revisions under the PIPES Act of 2020 to enhance distribution system safety through equipment and procedural expectations. Operators will be required to incorporate additional protections for low pressure distribution systems that prevent over-pressurization, amend construction procedures designed to minimize the risk of incidents caused by system over-pressurization, and update distribution integrity management programs to cover and prepare for over-pressurization incidents.

Table of Contents

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

NiSource Inc.

Regulatory, Environmental and Safety Matters

On November 30, 2023, the House Transportation & Infrastructure Committee introduced new pipeline safety reauthorization legislation known as the PIPES Act of 2023 to reauthorize PHMSA’s safety programs for the next four years. The proposed legislation includes several priorities for our company, including excavation damage prevention grants to improve states’ damage prevention programs, a PHMSA study on blending hydrogen in distribution pipelines, new criminal penalties for intentionally damaging pipeline facilities, and creation of a Voluntary Information Sharing System to allow for industry participants to share learnings and best practices in a protected manner across the pipeline industry.

CCR Regulation

In May 2023, the EPA proposed changes to the CCR regulations for inactive surface impoundments at inactive facilities, referred to as “legacy CCR surface impoundments.” The EPA is also proposing to extend a subset of requirements in the CCR regulations to areas not previously subject to the CCR regulations, referred to as CCR management units (“CCRMUs”). In November 2023, the EPA issued a Notice of Data Availability seeking comment on updated lists of legacy impoundments and CCRMUs, as well as a risk assessment for legacy impoundments and CCRMUs. On April 25, 2024 new EPA rules have been issued and we are evaluating the potential impact on our business.

Climate Change Issues

Physical Climate Risks. Increased frequency of severe and extreme weather events associated with climate change could materially impact our facilities, energy sales, and results of operations. We are unable to predict these events. However, we perform ongoing assessments of physical risk, including physical climate risk, to our business. More extreme and volatile temperatures, increased storm intensity and flooding, and more volatile precipitation leading to changes in lake and river levels are among the weather events that are most likely to impact our business. Efforts to mitigate these physical risks continue to be implemented on an ongoing basis.

Transition Climate Risks. We actively engage with and monitor the impact that proposed legislative and regulatory programs related to GHG emissions, at both the federal and state levels, would have on our business.

Regarding federal policies, we continue to monitor the implementation of any final and proposed climate change-related legislation and regulations, including the Infrastructure Investment and Jobs Act ("IIJA"), IRA, EPA's final methane regulations for the oil and natural gas industry, and EPA's proposed Waste Emissions Charge for Petroleum and Natural Gas Systems. We have identified potential opportunities associated with the IIJA and the IRA and are evaluating how they may align with our strategy going forward. The energy-related provisions of the IIJA include new federal funding for power grid infrastructure and resiliency investments, new and existing energy efficiency and weatherization programs, electric vehicle infrastructure for public chargers and additional LIHEAP funding. The IRA contains climate and energy provisions, including funding to decarbonize the electric sector.

The United States is a party to the Paris Agreement, an international treaty through which parties set nationally determined contributions to reduce GHG emissions, build resilience, and adapt to the impacts of climate change. The Biden Administration has set a target for the United States to achieve a 50%-52% GHG reduction from 2005 levels by 2030, which supports the President's goals to create a carbon-free power sector by 2035 and net zero emissions economy no later than 2050. There are many potential pathways to reach these goals.

In December 2023, the U.S. Department of Energy ("DOE") amended the congressionally-mandated efficiency standards for residential home furnaces manufactured after December 2028. We are assessing the potential impacts associated with these new standards.

The DOE has selected two hydrogen hubs in our territories as recipients of funding designated in the IIJA to support the development of regional clean hydrogen hubs. The two hubs are the Midwest Alliance for Clean Hydrogen Hub (MachH2), with potential projects across Illinois, Indiana, Kentucky, Michigan, Missouri, and Wisconsin; and the Appalachian Regional Clean Hydrogen Hub (ARCH2), with potential investments across West Virginia, Ohio, Kentucky, and Pennsylvania. Work is underway to determine what roles our companies may have with these hydrogen hubs.

In May 2023, the EPA released a package of proposed regulatory actions to reduce carbon dioxide emissions from new natural gas-fired electric generating units (EGUs), existing natural gas-fired EGUs, and existing coal-fired EGUs. The EPA finalized the rules on April 25, 2024. We are reviewing the potential impacts of these rules on our business.

Table of Contents

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

NiSource Inc.

Regulatory, Environmental and Safety Matters

We also continue to monitor the implementation of any final and proposed state policy. The Virginia Energy Innovation Act, enacted into law in April 2022, and effective July 1, 2022, allows natural gas utilities to supply alternative forms of gas that meet certain standards and reduce emissions intensity. The Act also provides that the costs of enhanced leak detection and repair may be added to a utility’s plan to identify proposed eligible infrastructure replacement projects and related cost recovery mechanisms, known as the SAVE Plan. Furthermore, under the Act, utilities can recover eligible biogas supply infrastructure costs on an ongoing basis. The provisions of these laws may provide opportunities for Columbia of Virginia as it participates in the transition to a lower carbon future.

The Climate Solutions Now Act of 2022 requires Maryland to reduce GHG emissions by 60% by 2031 (from 2006 levels), and it requires the state to reach net zero emissions by 2045. The Maryland Department of the Environment adopted a plan to achieve its 2031 goal and is required to adopt a plan for their 2045 net zero goal by 2030. The Act also enacts a state policy to move to broader electrification of both existing buildings and new construction, and requires the Public Service Commission ("PSC") to complete a study assessing the capacity of gas and electric distribution systems to successfully serve customers under a transition to a highly electrified building sector. The PSC released their report on December 29, 2023, and concluded that high levels of electrification can be handled by Maryland's electric systems through 2031. The Maryland Department of the Environment issued proposed Building Energy Performance Standards (BEPS), which would require net zero direct greenhouse gas emissions from large buildings by 2040 with interim targets. Columbia of Maryland is advocating for compliance pathways that use RNG, hydrogen, and emissions offsets. Separately, the PSC has also initiated a proceeding related to Near-Term, Priority Actions and Comprehensive, Long-Term Planning for Maryland's Gas Companies. Columbia of Maryland will continue to monitor these matters, but we cannot predict their final impact on our business at this time.

NIPSCO Gas, Columbia of Maryland, Columbia of Pennsylvania, Columbia of Virginia and Columbia of Kentucky each filed petitions to implement the Green Path Rider, which is a voluntary rider allowing customers to opt in and offset either 50% or 100% of their natural gas related emissions. To reduce the emissions, the utilities will purchase RNG attributes and carbon offsets to match the usage for customers opting into the program. After reaching settlement with other parties in September 2022, NIPSCO agreed to add a third tier to offset 25% of customer usage. The program was approved by the IURC at NIPSCO in November 2022 with a January 2023 start date. Columbia of Virginia received a final order in May 2023, approving the Green Path Rider and began enrolling customers in September 2023. The petitions filed by Columbia of Maryland, Columbia of Pennsylvania, and Columbia of Kentucky were rejected and have not been implemented as of March 31, 2024. Additionally, NIPSCO Electric has a voluntary Green Power Rider program in place that allows customers to designate a portion or all their monthly electric usage to come from power generated by renewable energy sources.

Net Zero Goal. In November 2022, we announced a goal of net zero greenhouse gas emissions by 2040 covering both Scope 1 and Scope 2 GHG emissions ("Net Zero Goal"). Our Net Zero Goal builds on greenhouse gas emission reductions achieved to-date and demonstrates that continued execution of our long-term business plan will drive further greenhouse gas emission reductions. We remain on track to achieve previously announced interim greenhouse gas emission reduction targets by reducing fugitive methane emissions from main and service lines by 50% from 2005 levels by 2025 and reducing Scope 1 GHG emissions from company-wide operations by 90% from 2005 levels by 2030. We plan to achieve our Net Zero Goal primarily through continuation and enhancement of existing programs, such as retiring and replacing coal-fired electric generation with low- or zero-emission electric generation, ongoing pipe replacement and modernization programs, and deployment of advanced leak-detection technologies. In addition, we plan to advance other low- and zero-emission energy resources and technologies, which may include hydrogen, renewable natural gas, long-duration storage, and/or deployment of carbon capture and utilization technologies, if and when these become technologically and economically feasible. Carbon offsets and renewable energy credits may also be used to support achievement of our Net Zero Goal. As of the end of 2023, we had reduced Scope 1 GHG emissions by approximately 72% from 2005 levels.

Our greenhouse gas emissions projections, including achieving a Net Zero Goal, are subject to various assumptions that involve risks and uncertainties. Achievement of our Net Zero Goal by 2040 will require supportive regulatory and legislative policies, favorable stakeholder environments and advancement of technologies that are not currently economical to deploy. Should such regulatory and legislative policies, stakeholder environments or technologies fail to materialize, our actual results or ability to achieve our Net Zero Goal, including by 2040, may differ materially.

Table of Contents

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

NiSource Inc.

Market Risk Disclosures

Risk is an inherent part of ~~NiSource’s~~our businesses. The extent to which ~~NiSource~~we properly and effectively ~~identifies, assesses, monitors~~identify, assess, monitor and ~~manages~~manage each of the various types of risk involved in ~~its~~our businesses is critical to ~~its~~our profitability. ~~NiSource seeks~~We seek to identify, assess, monitor and manage, in accordance with defined policies and procedures, the following principal market risks that are involved in ~~NiSource’s~~our businesses: commodity price risk, interest rate risk and credit risk. ~~Risk management at NiSource is~~We manage risk through a multi-faceted process with oversight by the Risk Management Committee that requires constant communication, judgment and knowledge of specialized products and markets. ~~NiSource’s~~Our senior management takes an active role in the risk management process and has developed policies and procedures that require specific administrative and business functions to assist in the identification, assessment and control of various risks. These may include, but are not limited to market, operational, financial, compliance and strategic risk types. In recognition of the increasingly varied and complex nature of the energy business, ~~NiSource’s~~our risk management process, policies and procedures continue to evolve and are subject to ongoing review and modification.

Commodity Price Risk

~~NiSource is exposed to~~Our gas and electric subsidiaries have commodity price risk ~~as a result~~primarily related to the purchases of ~~its subsidiaries’ operations involving~~ natural gas and power. To manage this market risk, ~~NiSource’s~~our subsidiaries use derivatives, including commodity futures contracts, swaps, forwards and options. ~~NiSource does~~We do not participate in speculative energy trading activity.

Commodity price risk resulting from derivative activities at ~~NiSource’s~~our rate-regulated subsidiaries is limited and does not bear signification exposure to earnings risk, since ~~regulations~~our current regulatory mechanisms allow recovery of prudently incurred purchased power, fuel and gas costs through the ~~ratemaking~~rate-making process, including gains or losses on these derivative instruments. These changes are included in the GCA and FAC regulatory rate-recovery mechanisms. If ~~states should explore additional regulatory reform,~~these mechanisms were to be adjusted or eliminated, these subsidiaries may begin providing services without the benefit of the traditional ~~ratemaking~~rate-making process and may be more exposed to commodity price risk. For additional information, see "Results and Discussion of Segment Operations" in this Management's Discussion.

~~NiSource~~Our subsidiaries are required to make cash margin deposits with their brokers to cover actual and potential losses in the value of outstanding exchange traded derivative contracts. The amount of these deposits, some of which isare reflected in ~~NiSource’s~~our restricted cash balance, may fluctuate significantly during periods of high volatility in the energy commodity markets.

Refer to Note 6,11, "Risk Management Activities," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for further information on ~~NiSource's~~our commodity price risk assets and liabilities as of ~~September 30, 2017 or~~March 31, 2024 and December 31, ~~2016.~~2023.

Interest Rate Risk

~~NiSource is~~We are exposed to interest rate risk as a result of changes in interest rates on borrowings under ~~its~~our revolving credit agreement, commercial paper program, and accounts receivable programs, ~~and term loan,~~ which have interest rates that are indexed to short-term market interest rates. Based upon average borrowings and debt obligations subject to fluctuations in short-term market interest rates, an increase (or decrease) in short-term interest rates of 100 basis points (1%) would have increased (or decreased) interest expense by ~~$3.7~~$2.6 million and ~~$12.6~~$4.5 million for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2024 and ~~$3.0 million and $6.8 million for the three and nine months ended September 30, 2016,~~2023, respectively. ~~NiSource is~~We are also exposed to interest rate risk as a result of changes in benchmark rates that can influence the interest rates of future long-term debt issuances.

~~Refer~~ From time to ~~Note 6, "Risk Management Activities," in the Notes to Condensed Consolidated Financial Statements (unaudited) for further information on NiSource's~~time we may enter into forward interest rate ~~risk assets and liabilities as of September 30, 2017 and December 31, 2016.~~

~~Table of Contents~~

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

~~NiSource Inc.~~

instruments to lock in long term interest costs and/ or rates.

Credit Risk

Due to the nature of the industry, credit risk is embedded in many of ~~NiSource’s~~our business activities. ~~NiSource’s~~Our extension of credit is governed by a Corporate Credit Risk Policy. In addition, Risk Management Committee guidelines are in place which document management approval levels for credit limits, evaluation of creditworthiness, and credit risk mitigation efforts. Exposures to credit risks are monitored by the risk management function, which is independent of commercial operations. Credit risk arises due to the possibility that a customer, supplier or counterparty will not be able or willing to fulfill its obligations on a transaction on or before the settlement date. For derivative-related contracts, credit risk arises when counterparties are obligated to deliver or purchase defined commodity units of gas or power to ~~NiSource~~us at a future date per execution of contractual terms and conditions. Exposure to credit risk is measured in terms of both current obligations and the market value of forward positions net of any posted collateral such as cash and letters of credit.

~~NiSource closely monitors~~We evaluate the financial status of ~~its banking credit providers. NiSource evaluates the financial status of its~~our banking partners through the use of market-based metrics such as credit default swap pricing levels, and also through traditional credit ratings provided by major credit rating agencies.

Table of Contents

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

NiSource Inc.

Other Information

Critical Accounting ~~Policies~~Estimates

~~Pension and Other Postretirement Benefits.~~ ~~On January 1, 2017, NiSource changed the method used to estimate the service and interest components~~A summary of ~~net periodic benefit cost for pension and other postretirement benefits. This change, compared to the previous method, resulted in a decrease~~our critical accounting estimates is included in the ~~actuarially-determined service and interest cost components. Historically, NiSource estimated service and interest costs utilizing a single weighted-average discount rate derived from~~Company's Annual Report on Form 10-K for the yield curve used to measure the benefit obligation at the beginning of the period. NiSource now utilizes a full yield curve approach to estimate these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. NiSource believes the new approach provides a more precise measurement of service and interest costs by aligning the timing of the plan’s liability cash flows to the corresponding spot rates on the yield curve. The benefit obligations measured under this approach are unchanged. NiSource accounted for this change as a prospective change in accounting estimate. For further information on NiSource’s pension and other postretirement benefits, see Note 11, “Pension and Other Postretirement Benefits,” in the Notes to Condensed Consolidated Financial Statements (unaudited).

year ended December 31, 2023. There were no ~~additional significant~~material changes ~~to critical accounting policies for the period ended September 30, 2017.~~made as of March 31, 2024.

Recently Issued Accounting Pronouncements

Refer to Note 2, "Recent Accounting Pronouncements," in the Notes to the Condensed Consolidated Financial Statements (unaudited) for additional information about recently issued and adopted accounting pronouncements.

Table of Contents

NiSource Inc.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~NiSource Inc.~~


DE				35-2108964

~~Delaware~~	~~35-2108964~~
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

801 East 86th Avenue ~~Merrillville, Indiana~~
Merrillville,		IN		46410
(Address of principal executive offices)				(Zip Code)


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	NI	NYSE


DEFINED TERMS

~~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)
~~NiSource Subsidiaries, Affiliates and Former Subsidiaries~~
~~Capital Markets~~	~~NiSource Capital Markets, Inc.~~
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
~~NiSource or the Company~~NIPSCO Holdings I		~~NiSource Inc.~~NIPSCO Holdings I LLC
~~NiSource Finance~~NIPSCO Holdings II		~~NiSource Finance Corp.~~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		Dunn's Bridge I Solar Generation LLC and its wholly owned subsidiary, Dunns Bridge Solar Center, LLC
Dunns Bridge II		Dunn's Bridge II Solar Generation LLC
Gibson		Gibson 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
~~CAA~~BIP		~~Clean Air Act~~BIP Blue Buyer L.L.C
~~CCRs~~Blackstone		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)
~~CIAC~~Columbia Operations		~~Contributions In Aid~~Reportable segment comprised of ~~Construction~~the results of Columbia Gas distribution companies and all related subsidiaries
CO₂ Corporate Units		~~Carbon Dioxide~~Series A Corporate Units
~~CPP~~		~~Clean Power Plan~~
~~DPU~~		~~Department of Public Utilities~~


DSM		Demand Side Management
~~ECR~~EGUs		~~Environmental Cost Recovery~~
~~ECT~~	~~Environmental Cost Tracker~~
~~EGUs~~	Electric Utility Generating Units
~~ELG~~EPA		~~Effluent limitations guidelines~~
~~EPA~~	United States Environmental Protection Agency
EPS		Earnings per share
~~FAC~~Equity Units		Series A Equity Units
FAC		Fuel adjustment clause


DEFINED TERMS
FASB		Financial Accounting Standards Board
~~GAAP~~
FMCA		Federally Mandated Cost Adjustment
GAAP		Generally Accepted Accounting Principles
GCA		Gas cost adjustment
~~GCR~~GHG		~~Gas cost recovery~~Greenhouse gases
~~GHG~~GWh		~~Greenhouse gases~~Gigawatt hours
~~GSEP~~
IRA		~~Gas System Enhancement Program~~Inflation Reduction Act of 2022
~~gwh~~IRP		~~Gigawatt hours~~
~~IBM~~	~~International Business Machines Corporation~~
~~IRP~~	Infrastructure Replacement Program



~~DEFINED TERMS~~
IURC	Indiana Utility Regulatory Commission
~~LDCs~~JV		~~Local distribution companies~~Joint Venture
~~MGP~~
LIFO		Last In, First Out
LIHEAP		Low Income Heating Energy Assistance Program

MGP		Manufactured Gas Plant
MISO		Midcontinent Independent System Operator
MMDth		Million dekatherms
~~MPSC~~MW		~~Maryland Public Service Commission~~Megawatts
~~NAAQS~~MWh		~~National Ambient Air Quality Standards~~Megawatt hours
~~NOL~~
NIPSCO Electric		~~Net operating loss~~The electric generation and transmission activities of the NIPSCO Operations reportable segment
~~NYMEX~~NIPSCO Gas		The gas distribution activities of the NIPSCO Operations reportable segment
NIPSCO Minority Interest Transaction		A transaction between NiSource, NIPSCO Holdings II (sole owner of NIPSCO) and an affiliate of Blackstone pursuant to a purchase and sale agreement entered into on June 17, 2023, that offered equity interests in NIPSCO Holdings II in exchange for capital contributions by the parties.
NIPSCO Operations		Reportable segment comprised of the results of NIPSCO Holdings I, NIPSCO Holdings II, and NIPSCO and all related subsidiaries
NYMEX		New York Mercantile Exchange
~~OCC~~OPEB		~~Ohio Consumers' Counsel~~Other Postemployment Benefits
~~OPEB~~

PHMSA		~~Other Postretirement Benefits~~Pipeline and Hazardous Materials Safety Administration
~~OUCC~~PPA		~~Office of Utility Consumer Counselor~~Power Purchase Agreement
~~Pure Air~~




RNG		~~Pure Air on the Lake LP~~Renewable Natural Gas
~~RCRA~~
SAVE		~~Resource Conservation and Recovery Act~~Steps to Advance Virginia's Energy Plan
~~ppb~~Scope 1 GHG Emissions		~~Parts per billion~~Direct emissions from sources owned or controlled by us (e.g., emissions from our combustion of fuel, vehicles, and process emissions and fugitive emissions)
~~PUCO~~Scope 2 GHG Emissions		~~Public Utilities Commission of Ohio~~Indirect emissions from sources owned or controlled by us
SEC		Securities and Exchange Commission
~~TDSIC~~
SMRP		Safety Modification and Replacement Program
SMS		Safety Management System


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 ~~Entities~~Entity
~~VSCC~~WAM		~~Virginia State Corporation Commission~~Work and Asset Management


	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions, except per share amounts)	2017			2016			2017			2016
Net Revenues
Gas Distribution	$	239.4		$	212.3		$	1,403.0		$	1,244.3
Gas Transportation	191.6			180.0			735.1			689.5
Electric	485.8			465.5			1,365.5			1,249.2
Other	0.2			3.5			2.7			12.5
Gross Revenues	917.0			861.3			3,506.3			3,195.5
Cost of Sales (excluding depreciation and amortization)	233.6			218.2			1,062.7			949.6
Total Net Revenues	683.4			643.1			2,443.6			2,245.9
(in millions, except per share amounts)
(in millions, except per share amounts)
Operating Revenues
Operating Revenues
Operating Revenues
Customer revenues
Customer revenues
Customer revenues
Other revenues
Other revenues
Other revenues
Total Operating Revenues
Total Operating Revenues
Total Operating Revenues
Operating Expenses
Operating Expenses
Operating Expenses
Cost of energy
Cost of energy
Cost of energy
Operation and maintenance
Operation and maintenance
Operation and maintenance	383.3			336.6			1,184.9			1,028.9
Depreciation and amortization	143.0			136.3			428.5			406.0
Gain on sale of assets and impairments, net	—			(0.1		)	(0.1		)	(0.4		)
Depreciation and amortization
Depreciation and amortization

Other taxes

Other taxes

Other taxes	57.5			56.6			189.7			178.1
Total Operating Expenses	583.8			529.4			1,803.0			1,612.6
Total Operating Expenses
Total Operating Expenses

Operating Income

Operating Income

Operating Income	99.6			113.7			640.6			633.3
Other Income (Deductions)
Other Income (Deductions)
Other Income (Deductions)
Interest expense, net
Interest expense, net
Interest expense, net	(87.9		)	(85.0		)	(260.8		)	(261.5		)
Other, net	4.8			3.5			9.8			(1.9		)
Loss on early extinguishment of long-term debt	—			—			(111.5		)	—
Other, net
Other, net

Total Other Deductions, Net	(83.1		)	(81.5		)	(362.5		)	(263.4		)
Income from Continuing Operations before Income Taxes	16.5			32.2			278.1			369.9

Total Other Deductions, Net

Total Other Deductions, Net
Income before Income Taxes
Income before Income Taxes
Income before Income Taxes
Income Taxes	2.5			8.5			97.1			130.6
Income from Continuing Operations	14.0			23.7			181.0			239.3
Income (Loss) from Discontinued Operations - net of taxes	—			3.5			(0.1		)	3.4
Income Taxes
Income Taxes

Net Income	14.0			27.2			180.9			242.7

Net Income

Net Income
Net income (loss) attributable to noncontrolling interest
Net income (loss) attributable to noncontrolling interest
Net income (loss) attributable to noncontrolling interest
Net Income Attributable to NiSource
Net Income Attributable to NiSource
Net Income Attributable to NiSource
Preferred dividends
Preferred dividends
Preferred dividends
Preferred redemption premium
Preferred redemption premium
Preferred redemption premium
Net Income Available to Common Shareholders
Net Income Available to Common Shareholders
Net Income Available to Common Shareholders
Earnings Per Share
Earnings Per Share
Earnings Per Share
Basic Earnings Per Share
Continuing operations	$	0.04		$	0.07		$	0.55		$	0.74
Discontinued operations	—			0.01			—			0.02
Basic Earnings Per Share
Basic Earnings Per Share	$	0.04		$	0.08		$	0.55		$	0.76
Diluted Earnings Per Share
Continuing operations	$	0.04		$	0.07		$	0.55		$	0.74
Discontinued operations	—			0.01			—			0.01
Diluted Earnings Per Share	$	0.04		$	0.08		$	0.55		$	0.75
Dividends Declared Per Common Share	$	0.175		$	0.165		$	0.700		$	0.640
Diluted Earnings Per Share
Basic Average Common Shares Outstanding
Basic Average Common Shares Outstanding
Basic Average Common Shares Outstanding	331.1			322.3			326.7			321.4
Diluted Average Common Shares	332.4			323.9			328.0			323.2
Diluted Average Common Shares
Diluted Average Common Shares



	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions, net of taxes)	2017			2016			2017			2016
Net Income	$	14.0		$	27.2		$	180.9		$	242.7
Other comprehensive income:
Net unrealized gain (loss) on available-for-sale securities⁽¹⁾	0.1			(0.3		)	1.1			2.2
Net unrealized loss on cash flow hedges⁽²⁾	(9.3		)	(22.6		)	(21.2		)	(146.8		)
Unrecognized pension and OPEB benefit⁽³⁾	1.1			0.2			1.5			0.7
Total other comprehensive loss	(8.1		)	(22.7		)	(18.6		)	(143.9		)
Comprehensive Income	$	5.9		$	4.5		$	162.3		$	98.8

NiSource Inc. Condensed Consolidated Balance Sheets (unaudited)

(in millions)	September 30, 2017			December 31, 2016
ASSETS
Property, Plant and Equipment
Utility plant	$	20,657.6		$	19,368.0
Accumulated depreciation and amortization	(6,906.2		)	(6,613.7		)
Net utility plant	13,751.4			12,754.3
Other property, at cost, less accumulated depreciation	290.7			313.7
Net Property, Plant and Equipment	14,042.1			13,068.0
Investments and Other Assets
Unconsolidated affiliates	5.6			6.6
Other investments	207.7			193.3
Total Investments and Other Assets	213.3			199.9
Current Assets
Cash and cash equivalents	19.3			26.4
Restricted cash	9.0			9.6
Accounts receivable (less reserve of $17.4 and $23.3, respectively)	480.0			847.0
Gas inventory	325.2			279.9
Materials and supplies, at average cost	102.3			101.7
Electric production fuel, at average cost	84.0			112.8
Exchange gas receivable	42.9			5.4
Regulatory assets	203.9			248.7
Prepayments and other	65.8			130.6
Total Current Assets	1,332.4			1,762.1
Other Assets
Regulatory assets	1,666.2			1,636.7
Goodwill	1,690.7			1,690.7
Intangible assets	234.4			242.7
Deferred charges and other	90.4			91.8
Total Other Assets	3,681.7			3,661.9
Total Assets	$	19,269.5		$	18,691.9

NiSource Inc. Condensed Consolidated Balance Sheets (unaudited) (continued)

(in millions, except share amounts)	September 30, 2017			December 31, 2016
CAPITALIZATION AND LIABILITIES
Capitalization
Common Stockholders’ Equity
Common stock - $0.01 par value, 400,000,000 shares authorized; 336,691,078 and 323,159,672 shares outstanding, respectively	$	3.4		$	3.3
Treasury stock	(94.6		)	(88.7		)
Additional paid-in capital	5,518.5			5,153.9
Retained deficit	(1,020.6		)	(972.2		)
Accumulated other comprehensive loss	(43.7		)	(25.1		)
Total Common Stockholders’ Equity	4,363.0			4,071.2
Long-term debt, excluding amounts due within one year	7,518.6			6,058.2
Total Capitalization	11,881.6			10,129.4
Current Liabilities
Current portion of long-term debt	289.8			363.1
Short-term borrowings	843.2			1,488.0
Accounts payable	447.4			539.4
Dividends payable	58.9			—
Customer deposits and credits	253.1			264.1
Taxes accrued	148.4			195.4
Interest accrued	89.2			120.3
Exchange gas payable	68.0			83.7
Regulatory liabilities	55.1			116.7
Legal and environmental	27.5			37.4
Accrued compensation and employee benefits	167.0			161.4
Other accruals	119.2			82.7
Total Current Liabilities	2,566.8			3,452.2
Other Liabilities
Risk management liabilities	28.7			44.5
Deferred income taxes	2,619.4			2,528.0
Deferred investment tax credits	12.6			13.4
Accrued insurance liabilities	89.0			82.8
Accrued liability for postretirement and postemployment benefits	397.3			713.4
Regulatory liabilities	1,217.8			1,265.1
Asset retirement obligations	268.5			262.6
Other noncurrent liabilities	187.8			200.5
Total Other Liabilities	4,821.1			5,110.3
Commitments and Contingencies (Refer to Note 14, "Other Commitments and Contingencies")	—			—
Total Capitalization and Liabilities	$	19,269.5		$	18,691.9

NiSource Inc. Condensed Statements of Consolidated Cash Flows (unaudited)

Nine Months Ended September 30, (in millions)	2017			2016
Operating Activities
Net Income	$	180.9		$	242.7
Adjustments to Reconcile Net Income to Net Cash from Continuing Operations:
Loss on early extinguishment of debt	111.5			—
Depreciation and amortization	428.5			406.0
Deferred income taxes and investment tax credits	96.3			137.7
Other adjustments	28.5			24.5
Changes in Assets and Liabilities:
Components of working capital	32.6			(52.0		)
Regulatory assets/liabilities	(12.9		)	(202.2		)
Postretirement and postemployment benefits	(314.5		)	(20.9		)
Other noncurrent assets	(3.7		)	(3.0		)
Other noncurrent liabilities	(17.7		)	—
Net Operating Activities from Continuing Operations	529.5			532.8
Net Operating Activities from (used for) Discontinued Operations	0.1			(0.8		)
Net Cash Flows from Operating Activities	529.6			532.0
Investing Activities
Capital expenditures	(1,216.4		)	(1,083.4		)
Cost of removal	(78.9		)	(79.5		)
Purchases of available-for-sale securities	(139.4		)	(33.4		)
Sales of available-for-sale securities	129.4			25.9
Other investing activities	(0.8		)	2.2
Net Cash Flows used for Investing Activities	(1,306.1		)	(1,168.2		)
Financing Activities
Issuance of long-term debt	2,750.0			500.0
Repayments of long-term debt and capital lease obligations	(1,352.4		)	(210.9		)
Premiums and other debt related costs	(139.8		)	(0.3		)
Change in short-term borrowings, net	(644.9		)	491.6
Issuance of common stock	332.6			16.8
Acquisition of treasury stock	(5.9		)	(8.1		)
Dividends paid - common stock	(170.2		)	(152.3		)
Net Cash Flows from Financing Activities	769.4			636.8
Change in cash and cash equivalents from (used for) continuing operations	(7.2		)	1.4
Change in cash and cash equivalents from (used for) discontinued operations	0.1			(0.8		)
Cash and cash equivalents at beginning of period	26.4			15.5
Cash and Cash Equivalents at End of Period	$	19.3		$	16.1



As of September 30, (in millions)	2017		2016
Non-cash transactions:
Capital expenditures included in current liabilities	$	219.1	$	131.2
Dividends declared but not paid	$	58.9	$	53.1



(in millions)	Common Stock		Treasury Stock			Additional Paid-In Capital		Retained Deficit			Accumulated Other Comprehensive Loss			Total
Balance as of January 1, 2017	$	3.3	$	(88.7	)	$	5,153.9	$	(972.2	)	$	(25.1	)	$	4,071.2
Comprehensive Income (Loss):
Net Income	—		—			—		180.9			—			180.9
Other comprehensive income, net of tax	—		—			—		—			(18.6		)	(18.6		)
Common stock dividends ($0.70 per share)	—		—			—		(229.3		)	—			(229.3		)
Treasury stock acquired	—		(5.9		)	—		—			—			(5.9		)
Stock issuances:
Employee stock purchase plan	—		—			3.7		—			—			3.7
Long-term incentive plan	—		—			11.2		—			—			11.2
401(k) and profit sharing	—		—			28.8		—			—			28.8
Dividend reinvestment plan	—		—			6.3		—			—			6.3
ATM program	0.1		—			314.6		—			—			314.7
Balance as of September 30, 2017	$	3.4	$	(94.6	)	$	5,518.5	$	(1,020.6	)	$	(43.7	)	$	4,363.0



Shares (in thousands)	Common Shares	Treasury Shares		Outstanding Shares
Balance as of January 1, 2017	326,664	(3,504	)	323,160
Treasury Stock acquired		(245	)	(245	)
Issued:
Employee stock purchase plan	155	—		155
Long-term incentive plan	241	—		241
401(k) and profit sharing	1,188	—		1,188
Dividend reinvestment plan	261	—		261
ATM program	11,931	—		11,931
Balance as of September 30, 2017	340,440	(3,749	)	336,691


Three Months Ended March 31,(in millions)			2024
Cash and cash equivalents			102.2
Restricted Cash			38.3
Total Cash, Cash Equivalents and Restricted Cash			140.5

























(in millions)	Common Stock		Preferred Stock		Treasury Stock		Additional Paid-In Capital		Retained Deficit		Accumulated Other Comprehensive Loss		Noncontrolling Interest in Consolidated Subsidiaries		Total
Balance as of January 1, 2024	$	4.5	$	486.1	$	(99.9)	$	8,879.5	$	(967.0)	$	(33.6)	$	1,866.7	$	10,136.3
Comprehensive Income:
Net income	—		—		—		—		365.0		—		35.3		400.3
Other comprehensive loss, net of tax	—		—		—		—		—		(0.2)		—		(0.2)
Dividends:
Common stock ($0.53 per share)	—		—		—		—		(237.6)		—		—		(237.6)
Preferred stock (See Note 6)	—		—		—		—		(8.1)		—		—		(8.1)
Noncontrolling Interests:


Distributions to noncontrolling interests	—		—		—		—		—		—		(3.0)		(3.0)


Stock issuances (redemptions):

Series B and B-1 Preferred Stock Redemption	—		(486.1)		—		—		—		—		—		(486.1)

Series B and B-1 Preferred stock redemption premium	—		—		—		—		(14.0)		—		—		(14.0)
Employee stock purchase plan	—		—		—		1.4		—		—		—		1.4
Long-term incentive plan	—		—		—		3.3		—		—		—		3.3
401(k) and profit sharing	—		—		—		2.6		—		—		—		2.6

Balance as of March 31, 2024	$	4.5	$	—	$	(99.9)	$	8,886.8	$	(861.7)	$	(33.8)	$	1,899.0	$	9,794.9
















	Preferred	Common
Shares (in thousands)	Shares	Shares	Treasury	Outstanding
Balance as of January 1, 2024	40	451,345	(3,963)	447,382
Issued (Redeemed):


Employee stock purchase plan	—	53	—	53
Long-term incentive plan	—	663	—	663
401(k) and profit sharing	—	100	—	100


Series B and B-1 Preferred Stock	(40)	—	—	—
Balance as of March 31, 2024	—	452,161	(3,963)	448,198














	Preferred	Common
Shares (in thousands)	Shares	Shares	Treasury	Outstanding
Balance as of January 1, 2023	1,303	416,106	(3,963)	412,143
Issued:


Employee stock purchase plan	—	48	—	48
Long-term incentive plan	—	695	—	695
401(k) and profit sharing	—	97	—	97

Balance as of March 31, 2023	1,303	416,946	(3,963)	412,983



	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(in thousands)	2017	2016	2017	2016
Denominator
Basic average common shares outstanding	331,139	322,318	326,662	321,445
Dilutive potential common shares:
Shares contingently issuable under employee stock plans	604	228	503	146
Shares restricted under employee stock plans	653	1,372	866	1,606
Diluted Average Common Shares	332,396	323,918	328,031	323,197



(in millions)	September 30, 2017		December 31, 2016
Risk Management Assets - Current⁽¹⁾
Interest rate risk programs	$	—	$	17.0
Commodity price risk programs	0.2		7.4
Total	$	0.2	$	24.4
Risk Management Assets - Noncurrent⁽²⁾
Interest rate risk programs	$	20.1	$	17.1
Commodity price risk programs	0.7		7.5
Total	$	20.8	$	24.6
Risk Management Liabilities - Current⁽³⁾
Interest rate risk programs	$	36.9	$	15.3
Commodity price risk programs	3.3		1.5
Total	$	40.2	$	16.8
Risk Management Liabilities - Noncurrent
Interest rate risk programs	$	—	$	24.5
Commodity price risk programs	28.7		20.0
Total	$	28.7	$	44.5



September 30, 2017 (in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale securities
U.S. Treasury debt securities	$	34.3	$	—	$	(0.1	)	$	34.2
Corporate/Other debt securities	104.2		1.3		(0.4		)	105.1
Total	$	138.5	$	1.3	$	(0.5	)	$	139.3
December 31, 2016 (in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale securities
U.S. Treasury debt securities	$	35.0	$	0.1	$	(0.6	)	$	34.5
Corporate/Other debt securities	98.7		0.3		(2.0		)	97.0
Total	$	133.7	$	0.4	$	(2.6	)	$	131.5



(in millions)	Carrying Amount as of September 30, 2017		Estimated Fair Value as of September 30, 2017		Carrying Amount as of Dec. 31, 2016		Estimated Fair Value as of Dec. 31, 2016
Long-term debt (including current portion)	$	7,808.4	$	8,550.7	$	6,421.3	$	7,064.1



(in millions)	Gas Distribution Operations		Electric Operations		Corporate and Other		Total
Goodwill	$	1,690.7	$	—	$	—	$	1,690.7



	Pension Benefits						Other Postretirement Benefits
Three Months Ended September 30, (in millions)	2017			2016			2017			2016
Components of Net Periodic Benefit Cost
Service cost⁽¹⁾	$	7.4		$	7.7		$	1.2		$	1.3
Interest cost⁽¹⁾	17.1			22.4			4.5			5.5
Expected return on assets	(30.8		)	(33.2		)	(4.0		)	(4.3		)
Amortization of prior service credit	(0.1		)	—			(1.1		)	(1.2		)
Recognized actuarial loss	13.2			15.3			0.7			0.8
Settlement loss	10.6			—			—			—
Total Net Periodic Benefit Cost	$	17.4		$	12.2		$	1.3		$	2.1



	August 31, 2017		December 31, 2016
Weighted-average Assumption to Determine Benefit Obligation:
Discount rate	3.50	%	4.03	%
Weighted-average Assumptions to Determine Net Periodic Benefit Costs for the period ended:
Discount rate - service cost⁽¹⁾	4.40	%	4.24	%
Discount rate - interest cost⁽¹⁾	3.31	%	4.24	%
Expected return on assets	7.25	%	8.00	%



Three Months Ended September 30, 2017 (in millions)	Gains and Losses on Securities⁽¹⁾			Gains and Losses on Cash Flow Hedges⁽¹⁾			Pension and OPEB Items⁽¹⁾			Accumulated Other Comprehensive Loss⁽¹⁾
Balance as of July 1, 2017	$	0.4		$	(18.8	)	$	(17.2	)	$	(35.6	)
Other comprehensive income (loss) before reclassifications	0.1			(9.7		)	—			(9.6		)
Amounts reclassified from accumulated other comprehensive loss	—			0.4			1.1			1.5
Net current-period other comprehensive income (loss)	0.1			(9.3		)	1.1			(8.1		)
Balance as of September 30, 2017	$	0.5		$	(28.1	)	$	(16.1	)	$	(43.7	)

Nine Months Ended September 30, 2017 (in millions)	Gains and Losses on Securities⁽¹⁾			Gains and Losses on Cash Flow Hedges⁽¹⁾			Pension and OPEB Items⁽¹⁾			Accumulated Other Comprehensive Loss⁽¹⁾
Balance as of January 1, 2017	$	(0.6	)	$	(6.9	)	$	(17.6	)	$	(25.1	)
Other comprehensive income (loss) before reclassifications	1.1			(23.3		)	0.2			(22.0		)
Amounts reclassified from accumulated other comprehensive loss	—			2.1			1.3			3.4
Net current-period other comprehensive income (loss)	1.1			(21.2		)	1.5			(18.6		)
Balance as of September 30, 2017	$	0.5		$	(28.1	)	$	(16.1	)	$	(43.7	)



	Three Months Ended September 30,									Nine Months Ended September 30,
(in millions, except per share amounts)	2017			2016			2017 vs. 2016			2017			2016			2017 vs. 2016
Total Net Revenues	$	683.4		$	643.1		$	40.3		$	2,443.6		$	2,245.9		$	197.7
Total Operating Expenses	583.8			529.4			54.4			1,803.0			1,612.6			190.4
Operating Income	99.6			113.7			(14.1		)	640.6			633.3			7.3
Total Other Deductions, net	(83.1		)	(81.5		)	(1.6		)	(362.5		)	(263.4		)	(99.1		)
Income Taxes	2.5			8.5			(6.0		)	97.1			130.6			(33.5		)
Income from Continuing Operations	14.0			23.7			(9.7		)	181.0			239.3			(58.3		)
Income (Loss) from Discontinued Operations - net of taxes	—			3.5			(3.5		)	(0.1		)	3.4			(3.5		)
Net Income	14.0			27.2			(13.2		)	180.9			242.7			(61.8		)
Basic Earnings Per Share from Continuing Operations	$	0.04		$	0.07		$	(0.03	)	$	0.55		$	0.74		$	(0.19	)
Basic Average Common Shares Outstanding	331.1			322.3			8.8			326.7			321.4			5.3



~~(4.1)~~(3.1)			~~Form~~Certificate of ~~3.490% Notes due 2027~~Elimination of the Company with respect to the Series B Preferred Stock and the Series B-1 Preferred Stock, dated March 18, 2024 (incorporated by reference to Exhibit 3.1 to the NiSource Inc. Form 8-K filed on March 18, 2024).

(4.1)			Form of 5.350% Notes due 2034 (incorporated by reference to Exhibit 4.1 to the NiSource Inc. Form 8-K filed on ~~May 17, 2017)~~March 14, 2024).

~~(4.2)~~(10.1)			~~Form of 4.375% Notes due 2047~~Separation Agreement dated March 15, 2024, between NiSource Inc. and Donald Brown (incorporated by reference to Exhibit ~~4.2~~10.1 to the NiSource Inc. Form 8-K filed on ~~May 17, 2017)~~March 15, 2024).

~~(4.3)~~(10.2)			~~Form~~Second Amended and Restated Limited Liability Company Agreement of ~~3.950% Notes due 2048~~NIPSCO Holdings II LLC, dated January 30, 2024 (incorporated by reference to Exhibit ~~4.1~~10.44 to NiSource Inc. Form 10-K filed on February 21, 2024).

(10.3)			Form of 2024 CEO RSU Award Agreement (incorporated by reference to Exhibit 10.1 of the NiSource Inc. Form ~~8-K~~10 -K filed on ~~September 8, 2017)~~February 21, 2024).

~~(12)~~(10.4)			~~Ratio~~Form of ~~Earnings~~2024 CEO PSU Award Agreement (incorporated by reference to ~~Fixed Charges.~~Exhibit 10.2 of the NiSource Inc. Form *10-K filed on February 21, 2024).

(10.5)			Form of RSU Award Agreement (for awards on or after 2024) (incorporated by reference to Exhibit 10.3 of the NiSource Inc. Form 10-K filed on February 21, 2024).
~~(31.1)~~
(10.6)			Form of PSU Award Agreement (for awards on or after 2024) (incorporated by reference to Exhibit 10.48 of the NiSource Inc. Form 10-K filed on February 21, 2024).

(31.1)			Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

(31.2)			Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

(32.1)			Certification of Chief Executive Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).*

(32.2)			Certification of Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).*

(101.INS)			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

(101.SCH)			Inline XBRL Schema Document

(101.CAL)			Inline XBRL Calculation Linkbase Document

(101.LAB)			Inline XBRL Labels Linkbase Document

(101.PRE)			Inline XBRL Presentation Linkbase Document

(101.DEF)			Inline XBRL Definition Linkbase Document

(104)			Cover page Interactive Data File (formatted as inline XBRL, and contained in Exhibit 101.)

*			Exhibit filed herewith.
**			Schedules and similar attachments to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the U.S. Securities and Exchange Commission (the “SEC”) upon request