01—Abstract
Summary
Summary of the 10-Q filed August 7, 2024. Cited figures are marked; the original filing is the authoritative source.
NiSource Inc. reported second-quarter 2024 results in its Form 10-Q for the period ended June 30, 2024.
Total operating revenues were $1,084.7 milliona for the three months, compared with $1,090.0 million a year earlier, while operating income rose to $237.0 million from $168.9 million. Net income attributable to NiSource was $85.8 million, up from $58.8 million, and diluted EPS was $0.19 versus $0.09. For the six months, net income available to common shareholders was $430.1 million, or $0.95 diluted EPS, compared with $359.1 million and $0.80 a year earlier.
The company attributed the improvement mainly to rate increases from regulatory outcomes and the elimination of preferred dividends after the Series A and B preferred stock redemptions, partly offset by higher net income attributable to noncontrolling interest following the NIPSCO Minority Interest Transaction. The balance sheet shifted meaningfully during the first half. Cash and cash equivalents fell to $101.2 millionb from $2,245.4 million at December 31, 2023, as the company repaid $1.65 billion of term credit agreements and reduced commercial paper and short-term borrowings to $644.0 million from $3,048.6 million.
Long-term debt, excluding current portion, rose to $12,809.6 millionc from $11,055.5 million, reflecting 2024 senior and junior subordinated note issuances totaling $1.75 billion in face amount. Net available liquidity was $1,577.6 million at June 30, 2024, and the debt-to-capitalization ratio was 57.8% against a 70.0% covenant limit. Capital spending remained heavy.
Capital expenditures were $1,219.3 milliond for the six months, with milestone payments to renewable generation asset developers of $320.8 million. Management expects capital investments of $3.3 billion to $3.5 billion in 2024 and about $16.4 billion over 2024 through 2028.
The company is also pursuing its NIPSCO generation transition, including retiring the remaining R.M. Schahfer coal units by the end of 2025, and is evaluating data center development in its northern Indiana service territory.
02—Key points
Key Highlights
- Second-quarter operating income increased to $237.0 million from $168.9 million, while total operating revenues were roughly flat at $1,084.7 million versus $1,090.0 million.
- Diluted EPS for the second quarter was $0.19, compared with $0.09 in the prior-year quarter; for the six months, diluted EPS was $0.95 versus $0.80.
- Preferred dividends ceased after the March 15, 2024 redemption of Series B and B-1 preferred stock ($500.0 million total), following the June 2023 Series A redemption.
- Cash and cash equivalents declined to $101.2 million from $2,245.4 million at year-end 2023, as proceeds from the NIPSCO Minority Interest Transaction were used to repay $1.65 billion of term credit agreements.
- Long-term debt rose to $12,809.6 million from $11,055.5 million through 2024 issuances, including $650.0 million of 5.35% notes due 2034, $500.0 million of 6.95% junior subordinated notes due 2054, and $600.0 million of 5.20% notes due 2029.
- Management expects 2024 capital investments of $3.3 billion to $3.5 billion and approximately $16.4 billion over 2024 through 2028.
- Net available liquidity was $1,577.6 million at June 30, 2024, and the company reported a 57.8% debt-to-capitalization ratio versus a 70.0% covenant maximum.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 7, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $1.08B$1.09B | −0.5% |
| Operating Income | $237.00M$168.90M | +40.3% |
| Interest Expense | $129.30M$110.50M | +17.0% |
| Net Income | $85.80M$58.80M | +45.9% |
| EPS (Basic) | $0.19$0.10 | +90.0% |
| EPS (Diluted) | $0.19$0.09 | +111.1% |
| Shares Outstanding (Basic) | 448.50M413.30M | +8.5% |
| Shares Outstanding (Diluted) | 450.20M446.80M | +0.8% |
05—Questions
Frequently Asked Questions
Why did net income attributable to NiSource increase so much in the second quarter?
Net income attributable to NiSource was $85.8 million compared with $58.8 million a year earlier. Management attributed the improvement to higher revenues net of cost of energy, driven by rate increases from regulatory outcomes, and to the elimination of preferred stock dividends after the Series A and B preferred stock redemptions. Higher net income attributable to noncontrolling interest following the NIPSCO Minority Interest Transaction partly offset these gains.
What was the NIPSCO Minority Interest Transaction and how is it reflected in the results?
The transaction, which closed December 31, 2023, provided a $2.16 billion cash capital contribution from Blackstone-affiliated investors in exchange for equity interests in NIPSCO Holdings II. NiSource retains control and consolidates the results, so the investors' share appears as net income attributable to noncontrolling interest. Proceeds were used to repay short-term debt, including the term credit agreements.
How much debt did NiSource issue in 2024 and what are the terms?
Through June 30, 2024, NiSource issued $650.0 million of 5.35% senior unsecured notes maturing in 2034, $500.0 million of 6.95% fixed-to-fixed reset junior subordinated notes maturing in 2054, and $600.0 million of 5.20% senior unsecured notes maturing in 2029. The junior subordinated notes carry a deferral option of up to ten consecutive years, during which cash common dividends could not be paid.
What are the company's main capital spending plans?
Capital expenditures were $1,219.3 million for the first six months of 2024. The company remains on track for capital investments of $3.3 billion to $3.5 billion in 2024 and expects to invest approximately $16.4 billion during 2024 through 2028, including investments supporting its generation transition strategy. These forecasts are subject to ongoing review and adjustment.
What is the status of the planned equity issuance and liquidity position?
In February 2024 NiSource established an at-the-market equity program for up to $900.0 million through December 31, 2025, with approximately $400.0 million still available as of June 30, 2024. Net available liquidity was $1,577.6 million, compared with $3,070.8 million at December 31, 2023, and management believes these sources provide adequate capital for 2024 and beyond.
06—Continue