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Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to Q2 2025 NiSource Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Durgesh Chopra, Head of Investor Relations. You may begin.

Thank you, Bella. Good morning, and welcome to NiSource's Second Quarter 2025 Investor Call. Joining me today are President and Chief Executive Officer, Lloyd Yates; Executive Vice President and Chief Financial Officer; Shawn Anderson; Executive Vice President of Technology, Customers and Chief Commercial Officer, Michael Luhrs; and Executive Vice President and Group President of NiSource Utilities, Melody Birmingham. Today, we'll review NiSource's financial performance for the second quarter and share updates on operations, strategy and growth drivers. We'll open the call for your questions after our prepared remarks. Slides for today's call are available in the Investor Relations section of our website. Some statements made during this presentation will be forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements. Information concerning such risks and uncertainties is included in the Risk Factors and MDA sections of our periodic SEC filings. Additionally, some statements made on this call relate to non-GAAP earnings measures. Please refer to supplemental slides, segment information and full financial schedules for information on the most directly comparable GAAP measure and a reconciliation of these measures. With that, I'll turn the call over to Lloyd.

Good morning, everyone. Let's begin on Slide 3. At NiSource, our mission remains clear and consistent, deliver safe, reliable energy that drives value to our customers. We do this through disciplined capital deployment, operational excellence and fostering constructive regulatory relationships. We believe these fundamentals will continue to drive strong results, balance sheet strength and a dependable dividend. These principles form the cornerstone of NiSource's business strategy, consistently providing excellent value to shareholders. By focusing on regulated utility operations in high-quality regions, maintaining diversity across areas and energy types and disciplined capital investment, NiSource continues to excel. Turning to our key priorities on Slide 4. Our constructive regulatory foundation is further evidenced having received final orders in Virginia and Indiana this quarter. Our ongoing focus to refine our operations through AI efficiency and continuous improvement initiatives is transforming the way we work. We're pleased to report second quarter adjusted EPS of $0.22, bringing our year-to-date total to $1.19. This performance keeps us firmly on track to deliver on our full year commitment. As a result, we are narrowing our 2025 adjusted EPS guidance to the upper half of the previously stated range of $1.85 to $1.89. Let's move to Slide 5. Our operational excellence differentiates us. We are rapidly advancing our internal AI capabilities to transform how we operate and create a sustainable competitive edge at NiSource. Our work management intelligence solution is now fully deployed across all NIPSCO and Columbia operating companies delivering up to 24% improvement in steel productivity, equivalent to more than 83,000 incremental work hours through smarter analytics-driven scheduling and greater efficiency in dispatch time. Building on this success, we are expanding AI into other critical areas of the business. In supply chain, we have launched a generative AI-powered analyst initiative to transform procurement processes, unlocking greater efficiency and deeper insights by leveraging the full scale of the NiSource platform. We are also exploring how AI can support system reliability and improved storm response during severe weather events. AI and analytics are becoming foundational to how we deliver value. We remain committed to scaling these capabilities to optimize performance, elevate service and support our long-term strategic goals. Using our advanced mobile leak detection capabilities to address large volume leaks across our territory, we completed 9,966 miles of leak survey in the second quarter bringing our total miles driven to 18,665 year-to-date, exceeding our goal. We also launched the final phase of our Work & Asset Management, or WAM. This marks a major milestone in our digital transformation. The WAM program delivers enterprise impact reaching nearly 5,000 end users. It has converted over $500 million records and integrated data from 23 host systems, thus underscoring the scale and complexity of this initiative. We have now successfully standardized how we manage field work and assets across the enterprise, improving asset visibility, streamlining scheduling and enabling real-time decision-making. On Slide 6, we continue to make strong progress on our regulatory agenda. Since our last call, our Virginia rate case was approved. The final order authorized a $40.7 million revenue increase and a 9.75% ROE with rates already in effect. This outcome supports $442 million in investments from 2023 through 2025, including critical safety, compliance and reliability capital additions. It also reflects our continued ability to work constructively with stakeholders to deliver timely and balanced outcomes. In Indiana, our NIPSCO Electric rate case will approve in June providing $257 million in revenue uplift. This marks our seventh settlement in the last 10 years across both electric and gas businesses in the state. These outcomes reinforce the strength of our stakeholder relationships and the predictability of our regulatory environment. Our work in Pennsylvania continues to demonstrate the value of our risk-reduction strategy and alignment with stakeholders. We continue our track record of constructive regulation working through our rate case, expecting a final order in the fourth quarter. Building on our regulatory momentum, we are also advancing initiatives that support broader economic development. These efforts strengthen our existing communities by expanding the customer base and helping to distribute fixed costs more efficiently. For example, our team strategically revitalized a dormant point of delivery station in Skippers Virginia, unlocking the capacity to support 2 new industrial customers. Both companies are leaders in sustainable innovation. One, transforming municipal waste into renewable energy and the other repurposing coal ash through advanced recycling processes. This initiative not only reactivates critical infrastructure, but also drives forward environmentally responsible industrial growth. NIPSCO continues to drive strategic growth across the service territory, supporting a diverse range of new developments in advanced manufacturing, logistics and technology. Notable projects include GI Tech's first U.S. manufacturing facility in Merrillville, Slate Automotive 1.4 million square foot electric truck plant in Warsaw and FedEx' $60 million investment in new distribution center in Gary, collectively projected to generate over 2,600 jobs. These investments underscore the state's emergence as a hub for innovation, sustainability and workforce development. Now before I hand it off to Shawn, I want to give you an update on our strategy to support data center development in Northern Indiana, our application to the IURC to support the GenCo operating model remains under review, and the settlement modification on July 18 was further evidence of our ongoing efforts to address stakeholder concerns. We continue to believe GenCo offers a compelling option to meet data center needs, while also driving differentiated value to the region, including our existing customers. We still expect no order in the third quarter. Regarding our data center engagement, we continue to have constructive dialogue with a range of counterparties interested in the compelling fundamentals, which our service territory can provide for data center investment. We know well the state of Indiana is great for energy development. We are excited about the prospects our strategy can provide to new customers and the growth it could bring to the state and our local communities. Our team is very focused on maximizing this opportunity for the many stakeholders involved, our existing customers, our communities, our policymakers and of course, our shareholders. We remain hard at work to convert this opportunity into a reality and continue to believe we are on track. Shawn, I'll now turn it over to you.

Thanks, Lloyd. I'd like to start on Slide 7. Our generation transition began in 2019 with the launch of a multiyear strategy to enhance energy capacity and improve our energy footprint in Indiana. As part of this initiative, we executed a series of strategic projects that have significantly expanded our renewable energy portfolio. This includes short-term contracted capacity resources, expanded demand-side management programs, solar facilities, battery storage and new natural gas peaking resources. Today, the portfolio is nearly complete with Gibson approaching finalization and Templeton Wind progressing according to schedule, on track for commercial operation in 2027. We are proud to report we've been able to deliver these investments on time and within budget, a testament to our disciplined planning and execution. Our ability to successfully execute this large-scale multiphase initiative not only demonstrates our operational excellence, but also reinforces our confidence in tackling complex endeavors, particularly when called upon to enhance the safe and reliable energy delivery to our communities. With the same strategic rigor and commitment to execution, we are well positioned to deliver resilient infrastructure, which supports increasing energy demands while managing stakeholder needs. With this in mind, I'd like to briefly address 2 policy-related items, which relate to our financial strategy and our infrastructure development plans. First, the recently enacted One Big Beautiful Bill does not impact our renewable development project plans. The remaining project scheduled to come online after 2025 is Templeton with a commercial operation date in 2027. And importantly, it still qualifies for tax credits under IRC Section 45. Second, as we discussed in our Q1 earnings call, we remain on track to retire Schahfer by the end of 2025 and Michigan City by the end of 2028. We are continuing to work with policymakers to evaluate alternatives to this plan, including the potential to utilize these facilities on an extended time line. We'll work closely with federal and state regulators to ensure we make decisions that are in the best interest of our customers and all stakeholders. Our capital investment outlook shown on Slide 8, emphasizes the flexibility across our portfolio as we assess the best fit plans for our stakeholders. Our $19.4 billion 5-year capital plan remains diversified and executable. We are not reliant on any single project or technology. Our growth across 6 states demonstrates the strength and diversification of investment driving our best-in-class development plans. In addition to the substantial electric generation investments I highlighted a moment ago, 48% of our base plan is attributed to gas system hardening, supporting the modernization of our gas infrastructure. Our ability to allocate capital across states and between gas and electric, enables NiSource to optimize recovery and respond dynamically to evolving needs. Additionally, we continue active engagement to advance the commercial development of over $2 billion of identified upside projects and look forward to sharing a more comprehensive update during our third quarter plan refresh. Beyond these plans, Slide 9 highlights our incremental investment opportunities, data center generation and T&D facilities, MISO transmission, FIMSA compliance and more. These are not included in our base or upside plans, but represent meaningful long-term value creation opportunities. We are working to commercialize these initiatives while building the investment thesis with stakeholders to optimize the value these opportunities can create. Turning to Slides 10 and 11. Our second quarter adjusted earnings per share was $0.22 and $0.01 above the same period last year. Year-to-date, adjusted EPS was $1.19, up $0.13 from the same period last year. This growth is driven by strong performance in both our NIPSCO and Columbia segments, which continued to outperform expectations. Our commitment to operational excellence through initiatives like Project Apollo and WAM has enabled our businesses to deliver consistent and high-quality results. We are reaffirming all long-term financial commitments on Slide 12, 6% to 8% annual adjusted EPS growth, 8% to 10% rate base growth, and 14% to 16% FFO to debt through 2029. Additionally, we are narrowing our 2025 adjusted EPS guidance to the upper half of the range. We've seen growth in our economies driving tailwinds into year-to-date results from increased customer count and usage as well as constructive financing success and regulatory execution. Our plan is built on a realistic foundation and modest demographic growth assumptions. We are seeing strong tailwinds across our jurisdictions. For example, metro growth in Columbus, Ohio, was 38% higher than the national average last year, and we're observing similar trends in other parts of our service territory. Over the trailing 12-month period ending in June, we observed customer growth at nearly 1% in our electric business and 0.6% in our gas business, both surpassing our forecast. Let's turn to Slide 13. In the second quarter, we advanced our financing plans with the issuance of $1.65 billion of senior notes. This builds on our first quarter activity and positions us well to meet our 2025 funding needs while maintaining our 14% to 16% FFO to debt target. Over the summer, S&P, Moody's and Fitch each completed their annual credit reviews and reported no changes to ratings and maintaining stable outlooks, which reflect the strong credit profile of NiSource. We believe the successful refinancing of our $1.25 billion August maturity effectively eliminates any near-term refinancing risk. This proactive step not only secures our capital structure, but also reinforces our financial flexibility and stability. With this transaction behind us, our forward-looking debt profile is significantly derisked and we now face minimal refinancing exposure in the foreseeable future. This positions us to focus on strategic growth initiatives with confidence backed by a strong and resilient balance sheet. We use practical interest rate assumptions in our plan despite a persistent high rate environment. And the economic growth across our service territories continues to advance. These fundamentals give us confidence in our 2025 earnings outlook and leaves NiSource well positioned to deliver strong financial results as we narrow to the upper half of our 2025 adjusted EPS guidance range. We continue building a track record of execution and growth on Slide 14. Our commitment to investors, employees, customers and all our stakeholders is central to everything we do. Our regulatory execution, year-to-date financing activity and thoughtful investment plans position us well for 2025, and we expect will continue across the planned horizon. Even with this upward trajectory and guidance for 2025, we continue to project an annual 6% to 8% growth rate, the value of which compounds through our planned horizon with continued outperformance. NiSource offers investors a diversified and fully regulated utility, with the opportunity to invest in programmatic gas infrastructure and long-term energy transition for a fully integrated electric business. The emerging opportunity to support unprecedented energy development and power demand, resulting from robust economic development onshoring as well as new data center developments, truly differentiates the value proposition relative to many alternatives in the marketplace today. And with that, we'll open the line for questions.

[Operator Instructions] Your first question comes from the line of Julien Dumoulin-Smith with Jefferies.

Look, if I can, I'm just trying to marry up some of the comments from your call here. Given how fast the data center market is evolving and given the comments you just made about the Columbus metro area, for instance, amongst other service territories here, how are you thinking about that opportunity, especially in the NIPSCO territory? Your load forecast, your '24 IRP, could you potentially view that as stale at this point? And how do you think about the scale and scope of the opportunity, especially since it hasn't fully come together yet? Is it -- is there an upward bias of the numbers there of the 2.6%, for instance?

So let me -- oh boy, that's -- those are a lot of questions in that one question. Let me start there. I wouldn't characterize it as an upward bias in the numbers, first of all. I think the way to think about this is there's a huge demand for data centers in Northern Indiana. And that hasn't backed off at all. What I'll tell you is that we're taking the time to really execute this opportunity in a thoughtful and disciplined manner. And we're guided by 4 principles, and I've talked about these before, right, protect the existing customer base, serve new customers with speed and agility, earn appropriate adjusted return for our shareholders and maintain NiSource's financial integrity. I've talked about this being a 2025 event. I talked about that in the fourth quarter of last year. And as I said in my script, we're very focused on that. And I believe we're right on track. We're where we need to be with respect to this opportunity. And when we have something to tell you, it will be comprehensive, and we'll get that to the market as soon as possible. We'll be very transparent with that. So that's where we are right now.

Yes. And Julien, maybe I'll just add one bit, which is we have seen demand across the gas footprint in Ohio and Virginia, specifically for pipeline expansions to serve on-site generation for data centers. Those inquiries continue to come in, and we continue to work collaboratively with our states and with our communities as there's a lot of excitement to expand the infrastructure development across all of our states.

Got It. And then if I can marry that up a little bit with the conversation on timing, right? Because I think you guys just said a second ago in the prepared comments about your confidence in the final order here, I suppose, on the GenCo by the end of September. How do you think about potential to provide any kind of example transaction or something that is a little bit more tangible for the stakeholders to look at and understand what you're proposing here as well as just maybe commentary about the time line itself on these larger loads.

So you just kind of married 2 process together, which we look at as separate and distinct. One is the GenCo declination process. That process is moving down the path. We're confident that we'll get an order by the third quarter of this year. Independent of that, but related is the process with the counterparties. And as I said, those conversations are ongoing. I think they're complex. If you go back to the 4 pillars I just talked about, we're really focused on meeting those 4 pillars. And when we have something to announce with that process, we'll let you know. But 2 separate processes.

Okay. All right. Fair enough. Lloyd, I definitely didn't mean to open that can of worms on marrying those 2 together, all right?

I'm glad to keeping the can open.

Question comes from the line of Nicholas Campanella with Barclays.

I'll just ask one more follow-up, if I could. Just 2 separate processes. You have the counterparty contract process. You also have a third quarter update where I think you're going to be refreshing the long-term plan, it sounds like. How do those 2 juxtapose against each other?

Let me point back to Shawn on the third quarter plan. Shawn?

Yes, Nick. I appreciate the question. We've been pretty sure to update the plans whenever we have the information credibly in front of you, whether that's quarter-by-quarter or if we do a full-blown refresh. So on the first instance, what we know about our regulated utility business is that it continues to need infrastructure investments, and we're going through the process of refreshing the $19.4 billion base plan to better understand the timing of cash flows and how those would sequence forward. What's driving that is increased need for generation, transmission, distribution and system maintenance across the gas and the electric side of the business, same fundamental drivers that we're seeing those in place. We're also seeing more economic development and strategic growth initiatives. So we're focused on refreshing that plan, and plan to have an update on the third quarter call. That said, we've got $2.2 billion of identified upside CapEx, and we'll see some of that upside CapEx flow whenever we see those projects become commercially viable and socialized with stakeholders. We don't have any of those to change place right now, but we do expect those to come to fruition here before the beginning -- or before the end of this year. So the $2.2 billion of upside CapEx plan will be another piece that we're trying to refresh and flow into the base plan as identified over the next 5 years. And then beyond that, we've got the incremental investment opportunities and specific to the data center opportunity itself. Once we have those concrete answers, we'll start to flow that information through our plans. And once we reach the same standard, credibility with counterparties, stakeholders and surety of the cash inflow and outflow, we'll also roll those through our plan and make sure that we understand what the forward-looking guidance would be around our financial commitments. So all three of those could work at any time. We're not going to wait just for the third quarter call to do that per se. But obviously, we see that as an opportunity to refresh thoughts on all 3 of those elements and plan to do so in Q3.

All right. That's very helpful. And then just a quick one, if I could. You're at the high end or you're above the midpoint, I guess, of '25 and you have an annual EPS growth target. So are we now kind of -- when we think about where you could be in that target on the base plan today, '26 and '27, should we be basing that off of 188 today? Is that the way to think about it?

Yes, the base would be how we achieve results at the end of this year and then 6% to 8% annual growth rate beyond those actual results. That's exactly right, Nick.

Your next question comes from the line of Richard Sunderland with JPMorgan.

Thinking about the supply picture overall, could you speak to turbine queue positions and just your confidence in ability to deliver new supply to meet any large load growth? And then I'm curious kind of related to that, you made some comments around the planned coal retirements and potential longer life for those assets. How does that fit into the supply picture as you add load?

I'm going to throw this over to Michael Luhrs.

So I appreciate the question. And I would just say Lloyd's highlighted -- and Shawn have highlighted our disciplined approach associated with this. What I'll say and what we provided is that we have put ourselves in a beneficial position associated with queues in order to be able to have the equipment necessary to deliver on the opportunities. So we feel like we are in a good place and in a strong position to deliver on the fundamentals, including being able to serve new customers with that speed and flexibility.

He talked about the extension of the coal plants. Melody, why don't you talk about where we are with respect to coal plant extensions?

Sure. So as you all know, the President passed an executive order earlier this year in April, and that order was shortly followed up by an executive order that was issued by Governor Braun in Indiana. And the order did call for the continued operation of all plants, all generation to meet the capacity needs. We've been working very closely with the state of Indiana, our President, Vince Parisi, our team in Indiana has worked closely with the governor and his office to understand what that will look like in Indiana. Our plan is still the same to retire our Schahfer plant by the end of this year. However, we will make sure that we work closely with the state so that we're aligned. And so no changes have been made as of this point, but we will ensure that we understand what the governor's direction is and that we support that direction. But nonetheless, our plan is and remains the same for Schahfer.

Understood. And then turning to the financing strategy. How do you see the GenCo playing into this in terms of potential impact to near-term or medium-term earnings with the GenCo structure before assets are in service or, I guess, abilities to structure around that and avoid any financing impacts until assets are in service? Do you see a path forward there without any earnings impacts? How do you think about that overall?

Thanks, Rich. I'll take that. I think we see a lot of flexibility in the structure as well as in the negotiations with customers. And then on top of that, the flexibility that we've built by strengthening the balance sheet over time, being thoughtful around raising equity as needed and delivering on the commitments that we've committed in front of us. That includes the outperformance of the base business, which continues to strengthen funds from operation and cash flow quality derived just from the work that we do each and every day. That's a critical element that continues to strengthen our financial flexibility. And we believe that, that can help support the operations that we need to as we move forward into the future flexibility needed. We've not disclosed exactly how we'll finance GenCo. We'll retain the flexibility to evaluate that once we have the use of cash and the customer contracts that we will be delivering upon in front of us. That will be something that we'll evaluate to optimize the overall value and minimize the financing cost and friction involved with bringing on the infrastructure that we've talked about. So we retain a lot of the flexibility and the outperformance, both in terms of strengthening the balance sheet and the base business producing incremental cash flows has put us in a great position to capitalize on this opportunity fairly efficiently.

Your next question comes from the line of Ryan Levine with Citigroup.

I have a couple of questions. In terms of the practical dynamics, so if the GenCo application is approved in September and at that point, is there a lot of the contract terms that have already been prenegotiated? Or would that cascade a series of negotiations and legal discussions to be able to hit your targeted goal of achieving deals by the end of the year?

Yes. So thanks for the question. As I said earlier, those are 2 separate processes. We continue to -- our discussions with the counterparties and there will be a set of terms associated with that, The GenCo declination process, we expect to get an order in the third quarter of this year. Those are 2 separate processes. So we would not go back and renegotiate, another way to think about it, yes.

Yes. But I mean if you don't get the declination filing, I mean that presumably stops that process and that -- and you're saying that you're just working ahead regardless of the outcome.

Well, remember, the declination filing, the order is a tool for us to -- it gives us the opportunity for -- remember, I talked about our second pillar, speed and flexibility for our new customers. This is just a tool that facilitates that speed and flexibility. If there's a negative order, there are other tools, including House Bill 1007 out of Indiana that allows us to implement these large low customers. So it is not the only tool to utilize this. Michael, do you want to add anything to that?

The only thing I would add to it is saying as we're working this, we're working multiple and parallel streams on many items. As was mentioned earlier, there's items of equipment. We're working those streams. We're working the regulatory streams as well, contractual streams as well as many other parts of the processes. In doing that, and as mentioned before, we'd like to ensure that we consider all the alternatives that occur within those different processes so that in the end, we can deliver on the opportunities both for our customers and for our stakeholders. So it's not one or the other or one in spite of, we are working multiple components to be able to ensure that those paths can come to fruition.

Okay. And then an unrelated question on Schahfer, given HB1007 and some of the recent state policies, can you speak to some of the cost recovery attributes of the recent initiatives in the state that are in place now to ensure timely recovery of any ongoing costs associated with keeping Schahfer on longer and how that could impact the review that's underway regarding potential life extension.

I think there's some things that got matched in there. House Bill 1007 has nothing to do with keeping Schahfer operating. I think Melody mentioned earlier, we're in conversations with the state and at the federal level to understand that if we keep shape or operating what those cost recovery mechanisms look like. So those conversations are still ongoing.

Your last question comes from the line of Steve Fleishman with Wolfe Research.

So just one on the GenCo declination case. Could you just remind us what process is left from here? I think there's filings from the parties. The non-signing parties do Friday. And is that the last event until we get an order pretty much?

Yes. Friday 8. Right. Yes. So that is the last step of the process. All the phase -- all the final filings are due, and then we continue to expect an order from the commission by the end of -- by the third quarter.

And then lastly, Lloyd, sorry, I'm going to ask you to repeat this. But just -- I heard in your prepared remarks that you're very focused on converting this into reality and on track, but I didn't hear 2025. And then I heard in a question earlier that you're committed and expecting to get this done during 2025. Could you just clarify that you think you can convert this into reality in 2025?

Absolutely. I said this is a 2025 event, and we are on track to execute that. And I said we're 2.5 quarters into the year, and we are on track to execute this opportunity. We're right where we need to be.

That concludes our Q&A session. I will now turn the call back over to Mr. Lloyd Yates, CEO, for closing remarks.

Yes. Again, we continue to thank you for the questions and your interest in NiSource and hope you have a great rest of the day.