NiSource : 2023 Integrated Annual Report

Driving Consistent Execution, Growth and Value

NISOURCE 2023 ANNUAL REPORT

A MESSAGE FROM OUR PRESIDENT & CHIEF EXECUTIVE OFFICER

As a trusted energy partner, we are committed to putting our shareholders, customers, employees and the communities we serve at the forefront of everything we do. The numerous achievements of 2023 would not be possible without a clear strategy and strong, consistent execution by our employees and business partners. They enable us to deliver safe, reliable energy that drives value to our customers across six states.

In 2023 the NiSource team:

• • Executed on the financial plan we outlined at our November 2022 Investor Day, including delivering full-year earnings at the top end of our increased 2023 guidance range, supported by a superior regulatory and stakeholder foundation that differentiates us from our peers.

• • Completed a 19.9% indirect equity interest transaction for the company's Northern Indiana Public Service Company LLC ("NIPSCO") subsidiary with an affiliate of Blackstone Infrastructure Partners. The transaction provides NiSource with a stronger balance sheet and financing flexibility to support our long-term investment strategy and allows us to both optimize cost of capital for customers and ultimate return on capital for our shareholders.

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• • Invested a record $3.6 billion to drive enhanced safety, reliability, modernization and decarbonization for our customers and communities.

• • Delivered on our commitment to maintain flat operating and maintenance expenses, fueled by our continuous improvement efforts - generating efficiencies by doing things safer, better, more efficiently and with less cost. These areas of focus help fuel our ability to achieve operational excellence and support our goal of maintaining a safety and people-first mindset, in

  addition to driving industry-leading, risk-informed asset

  management capabilities across our gas and electric

  operations.

• • Extended our financial plan to 2028, with non-GAAP Net Operating Earnings per Share (NOEPS) growth expected to be 6-8% annually, driven by $16 billion in expenditures and 8-10% annual rate base growth through 2028. This increases the capital investments projected over the next five-year window by $1 billion vs. the 2022-2027 prior plan.

• • Significantly improved safety performance by delivering a 14% reduction in Days Away, Restricted or Transferred (DART), and are on a path to achieving

  our goal of top-decile performance. Additionally, we

  recorded a 16% reduction in Preventable Vehicle

  Collisions (PVCs).

• • Strategically invested in our energy infrastructure in a way that will enable us to meet our 2040 net zero commitments as the future of energy evolves, while enhancing energy diversification and resilience. For example, in October we launched a multi-phase hydrogen blending project - one of the first in the United States to use a blending skid in a controlled setting to mix hydrogen and natural gas at precise levels to determine optimal blend percentages and their environmental and consumer benefits.

• • Hosted the company's annual Supplier Diversity Day, an event designed to provide diverse suppliers with information, contacts and support that will strengthen their ability to access NiSource business opportunities. The day was launched as part of NiSource's larger commitment to increase diverse supplier spending

to 25% by the year 2025, ensuring our supply chain better reflects the customers and communities we serve.

• • Released our inaugural 2023 Environmental, Social and Governance (ESG) Report, Building Trust for a Sustainable Energy Future. The report highlights how our ESG objectives have been established as part of our overall corporate strategy, and how this framework is successfully aligning us with our business partners, customers, employees and the communities we serve.

• • Ranked above industry average in overall customer satisfaction in JD Power's 2023 Year-end Gas Residential Satisfaction Study across our Columbia Gas and NIPSCO businesses. Columbia Gas of Virginia is NiSource's top-rated brand and ranked 5th in the nation in overall satisfaction. Columbia Gas of Kentucky was ranked 1st in the Midwest Midsize segment.

• • Recognized by TIME Magazine as one of the World's Best Companies; named one of the Best Employers for Diversity by Forbes; reaffirmed to the FTSE4Good Index Series; named to the S&P Dow Jones Sustainability Indices for the 10th consecutive year; and received the SAP Innovation Award in the industry leader category for using digitization to serve customers.

We have a clear roadmap for executing and achieving our long-term growth plan. Our commitment to investors, employees, customers and regulators is central to everything we do and remains the driving force of this company. We look forward to expanding these efforts across the organization in 2024 as a trusted and premier utility company, and I am confident the NiSource team is prepared to deliver.

WE LOOK FORWARD TO CONTINUED SUCCESS IN 2024

THANK YOU

A MESSAGE FROM OUR CHAIRMAN

Kevin Kabat

EXECUTING ON OUR COMMITMENTS

2023 was a demonstration of strong, consistent execution on our business and financial commitments. The external environment presented economic and market volatility, but - in the spirit of doing what we say we are going to do - NiSource navigated these various challenges and delivered on our commitment and mission to advance our goal of delivering safe, reliable energy that drives value to our customers.

technology platform implementation. The project will drive operational efficiencies through standardized work practices and systems for our field employees, enhance access to safety and system-related information, and improve service to our customers. NiSource's continuous improvement efforts also remained on track, generating efficiencies by enabling us to do things safer, better, more efficiently and with less cost.

As a trusted, reliable energy partner, ensuring the safety of our customers, employees and communities is at the forefront of everything we do. In 2023, leaders across our organization conducted more than 53,000 field observations, reinforcing safety processes and providing coaching to our field employees, while holding each other accountable to perform with excellence and do the right things to keep the public and our employees safe above all else.

We are focused on affordability for our customers while delivering efficient, reliable and sustainable solutions that customers depend on.

In 2023, we began our five-year, approximately $1 billion transformation project with an initial $300 million investment in an SAP and Salesforce

All of this is expected to contribute to continued safety and customer service enhancements, while keeping total customer bill levels generally in line with inflation over our five-year financial plan.

Many of the self-service digital offerings NiSource provides are designed not only to enhance the experience for our valued customers but also to lower operating expenses to keep customers' bills manageable. In 2023, NIPSCO was the highest-ranked utility in the U.S. and Canada by ESource's Website Benchmark Study for user experience of utility websites accessed from mobile devices and desktop computers.

Columbia Gas of Ohio ranked fourth overall in the same category. NiSource also received the SAP Innovation Award in the industry leader category for using digitization to serve customers.

These achievements would not be possible without our dedicated employees and their commitment to our valued customers, communities and all NiSource stakeholders.

In response to climate transition risks and opportunities, we continued toward our goal of achieving net zero greenhouse gas emissions (GHG) from our operations by 2040 - also referred to as Scope 1 and Scope 2 emissions. Our net zero goal builds on GHG emission reductions achieved to date and demonstrates the ongoing execution of our long-term business plan aimed at driving further GHG reductions. We remain on track to achieve previously announced interim GHG 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 are strategically investing in our energy infrastructure in a way that will enable us to meet our customer commitments as the future of energy evolves, while enhancing energy diversification and resilience. In 2023, Columbia Gas of Pennsylvania partnered with EN Engineering to construct a hydrogen blending skid, which allows for the controlled blending of hydrogen into natural gas at the company's Training Center's Safety Town in Monaca, Pennsylvania.

To demonstrate the efficacy of the blended fuel, we built a specially designed on-site model home equipped with natural gas appliances to simulate everyday usage in a residential home environment. Ongoing field confirmations are evaluating hydrogen's effect on the

natural gas itself, equipment, piping, and the net change in carbon emissions from blending, with favorable results.

In addition to the steps we are taking toward our goal of net zero GHG emissions by 2040, NiSource was the only utility parent company to earn an "A" grade in the Sierra Club's 2023 report on the clean energy transition and was named to the S&P Dow Jones Sustainability Indices for the 10th consecutive year.

We remain on track to retire 100% of coal assets by 2028 and replace them primarily with renewables. All the company's renewable wind and solar projects remain on target. Our first two Indiana-based solar Build-Transfer Agreement (BTA) projects - Indiana Crossroads Solar and Dunns Bridge I - are in service, producing more cost- effective, cleaner energy for homes and businesses across the state. In addition, the Indiana Crossroads Wind II Power Purchase Agreement (PPA) project was completed in 2023. Two additional solar BTA projects and one additional solar PPA project are on track to be completed in 2024.

To support our ability to serve customers, strengthen our balance sheet and fund ongoing capital needs associated with the renewable generation transition underway, we announced the completion of a 19.9% indirect equity interest transaction for NIPSCO with an affiliate of Blackstone Infrastructure Partners, the dedicated infrastructure group of Blackstone Inc.

We delivered full-year earnings at the top end of our 2023 guidance range and extended our financial plan through 2028, demonstrating strong and consistentexecution since the initiation of our plan one year ago, as well as the resilience and duration of NiSource's fundamental drivers.

2023 completes another strong year building upon our track record of consistent execution and growth and provides a positive outlook for all that is to come in 2024.

On behalf of the Board of Directors, thank you for your continued support as we remain committed to serving our customers, employees and communities as a trusted and reliable energy partner.

BOARD OF DIRECTORS

Kevin T. Kabat

Chairman of the Board, NiSource Inc., and Retired Vice Chairman and CEO, Fifth Third Bancorp

Peter A. Altabef

Chairman and CEO, Unisys Corporation

Sondra L. Barbour

Retired Executive Vice President, Information Systems & Global Solutions, Lockheed Martin Corporation

Theodore H. Bunting, Jr.

Retired Group President, Utility Operations, Entergy Corporation

Eric L. Butler

President and CEO, Aswani-Butler Investment Associates, and Retired Executive Vice President, Union Pacific Corporation

Deborah A. Henretta

Partner, G100 Companies, and Retired Group President, Procter & Gamble Co.

Deborah A. P. Hersman

Retired Chair, National Transportation Safety Board

Michael E. Jesanis

Co-founder and Former Managing Director, HotZero, LLC, and Retired President and CEO, National Grid USA

William D. Johnson

Retired President and CEO, Pacific Gas and Electric

Cassandra S. Lee

Chief Audit Executive, AT&T Inc.

John McAvoy

Retired President and CEO, Consolidated Edison, Inc. and Retired CEO, Consolidated Edison Company of New York, Inc.

Lloyd M. Yates

President and CEO, NiSource Inc.

BOARD OF DIRECTORS DIVERSITY STATS

12 Total

67% Men, 33% Women 33% Ethnically Diverse

ALL INFORMATION ON THIS PAGE IS AS OF APRIL 1, 2024.

SENIOR MANAGEMENT TEAM

Lloyd M. Yates

President and Chief Executive Officer

Shawn Anderson

Executive Vice President and Chief Financial Officer

Melanie Berman

Chief Human Resources Officer and Senior Vice President, Administration

Melody Birmingham

Executive Vice President and President, NiSource Utilities

Kimberly S. Cuccia

Senior Vice President, General Counsel and Corporate Secretary

William (Bill) Jefferson

Executive Vice President, Chief Operating and Safety Officer

Michael Luhrs

Executive Vice President, Strategy and Risk and Chief Commercial Officer

SENIOR MANAGEMENT TEAM DIVERSITY STATS

7 Total

57% Men, 43% Women 43% Ethnically Diverse

SCHEDULE 1

Reconciliation of Consolidated Net Income (Loss) Available to Common Shareholders to Net Operating Earnings (Loss) Available to Common Shareholders (Non-GAAP)

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NiSource Inc. published this content on 27 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 April 2024 13:20:19 UTC.