Nisource Stock

Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to Q2 2026 NiSource Earnings Conference Call.

[Operator Instructions]

I would now like to turn the call over to Durgesh Chopra, Head of Investor Relations. Please go ahead.

Thank you. Good morning, and welcome to NiSource's Second Quarter 2026 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, Customer 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. Following our prepared remarks, we'll open the line for your questions.

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 financial measures. Please refer to the 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.

Thank you, Durgesh, and good morning, everyone. I'll begin on Slide 3. At NiSource, our strategy remains grounded in delivering safe, reliable and affordable energy while creating long-term value for our customers, communities and shareholders. Disciplined capital deployment, operational excellence, along with constructive regulatory and stakeholder relationships across our jurisdictions continue to support successful execution. Our value proposition is anchored and regulated utility operations across 6 states, providing diversification in both asset mix and regulatory environment.

Our base business provides stability and flexibility as we continue to modernize our electric and gas infrastructure. Our data center strategy as a differentiated growth platform returning an expected $1.4 billion in savings to our customers over the lives of our data center contracts. Together, these businesses position NiSource to deliver on our commitments while supporting the significant energy needs emerging across our service territories.

Turning to our key priorities on Slide 4. Regulatory execution continues to advance our strategy and support the financial plan as evidenced by rate case filings in Virginia and Kentucky as well as several regulatory advances in our data center strategy, including IURC approvals of our data center agreements.

At the same time, we continue to advance operational improvements through AI-enabled efficiency and continuous improvement initiatives, helping us work more effectively and strengthening execution across the business. Today, we reported second quarter consolidated adjusted EPS of $0.16, bringing our year-to-date consolidated adjusted EPS to $1.22. With strong visibility into second half performance, we remain firmly on track to deliver on our full year commitments.

Moving to operational excellence on Slide 5. Safety remains our top priority in the foundation of how we serve our customers. This quarter, our teams responded safely and effectively to multiple severe weather events across our service territory. 2026 has been an unusually active year with a record number of tornadoes, driving increased outages and system impacts. Our field teams supported by operations and customer care worked around the clock to assess damage, restore service and support impact immunities as quickly and safely as possible.

This quarter reinforced by proactive investment in our systems and technology matters. We continue to harden our distribution systems to improve resiliency while enabling employees to interact with enterprise data through AI-powered experiences that accelerate decision-making beyond traditional reports and dashboards. This system, our speech analytics and storm response solution is another example of how Project Apollo leverages artificial intelligence, advanced analytics and other technology-enabled tools to standardize work improve visibility and reduce waste.

On Slide 6, we continue to make strong progress on our regulatory agenda. In Ohio, we received approval of key infrastructure and safety-related tracker mechanisms. And since our last call, we filed rate cases in Virginia and Kentucky to support time and recovery of critical investments that improve system safety and reliability.

As we modernize our systems, we remain focused on managing the pace of investment and the resulting impact on customer bills. We expect decisions on both filings by the first half of 2027. At NIPSCO, we continue to invest in projects that strengthen system reliability and deliver customer value. We're reviewing the order issued today from the IURC regarding our continued gas modernization investments and safety and reliability, which informs our program going forward and the meaningful progress we have made, modernizing NIPSCO's natural gas system over the past decade. We remain confident in the investment thesis as Indiana offers multiple pathways to recover prudent investments for the MCA and/or base rate cases. Notably, the commission recognized the need for continued investment and encouraged us to pursue recovery while demonstrating the specific benefits delivered by the individual projects. In June, we were issued a third federal order requiring the continued operation of the Shaker coal plant.

We are pursuing recovery of the associated compliance calls through a FERC Section 205 filing and seeking approval within 60 days. As we navigate these federal directives, our plan remains flexible and focused on balancing reliability, customer impacts and our financial commitments. Recently, CNBC named its ranking for America's top state for business, which includes several of the states we serve, led by Ohio #1 and two others in the top 10 and Virginia and Indiana. This recognition underscores the strong economic development momentum we are seeing across our service territories, bringing jobs and investment to the communities we serve.

For example, in Virginia, 2 major aerospace and defense manufacturers have announced projects representing more than $1.7 billion of planned investment in over 1,300 new jobs. These projects highlight the importance of reliable natural gas infrastructure and supporting long-term growth in our communities.

Turning to updates across our state operations, we believe Pennsylvania remains a constructive regulatory environment. We continue to proactively engage with all stakeholders, including the Governor's office and the commission as we evaluate our investment plans and regulatory requirements. Our planned 2026 capital program is fully supported under the framework established in our most recent rate case. And as we move forward, we will continue to evaluate trackers and other recovery mechanisms to support future investments.

Moving to Indiana. The recent approvals of our Amazon and Alphabet agreements reinforce the constructive regulatory support we continue to see for GenCo. Together, our data center agreement support continued economic growth and investment in the state while providing substantial bill relief for existing customers. We are engaged in the affordability discussions underway while the commission is evaluating a range of issues. We're encouraged by the collaborative and constructive nature of the discussion scheduled to begin on August 7. We expect the process to remain balanced and focused on enhancing customer affordability through economic development, greater build transparency and thoughtful targeted refinements to the state's regulatory framework.

Importantly, state leaders have acknowledged the significant customer savings delivered through our GenCo strategy and continue to recognize the role that economic development and investment recovery mechanisms play in supporting the reliable infrastructure our customers depend on. The diversity of our portfolio helps mitigate risk and preserve respectability as jurisdiction-specific developments evolve. Affordability and customer outcomes remain central to the regulatory dialogue, and we believe economic development is an important part of the solution.

We will continue to engage openly with our state commissions and other stakeholders as these efforts advance. We continue to identify opportunities to help manage customer costs through disciplined planning and constructive stakeholder engagement.

In Indiana, the IURC's recent 2026 residential electric bill survey shows our customers' bills declining year-over-year, driven in part by our strategic investments in renewable generation and the associated cost efficiencies those resources provide. In Ohio, we are continuing to pursue avenues to reduce property taxes that create ongoing savings for customers. In addition, an approved economic development agreement for a peaking plant project in Jasper County, Indiana is expected to lower property taxes by nearly 40% over the life of the investment, generating meaningful customer savings and supporting long-term affordability.

These actions complement our broader affordability-focused efforts, including our GenCo strategy. We remain focused on capturing the benefits of growing energy demand while protecting our existing customers, as shown on Slide 7.

Our agreements with Amazon and Alphabet are expected to provide approximately $1.4 billion of bill reductions for existing NIPSCO electric customers over their respective contract terms. For an average residential customer, that equates to up to $124 annually or roughly 1 month of an electric bill. We expect these benefits to begin flowing to customers as early in the fourth quarter of this year, and we see further opportunity for this to grow as we advance opportunities through our pipeline on Slide 8.

Demand from large low customers remains robust with 3 gigawatts in active strategic negotiations and line of sight to approximately 2 gigawatts of additional potential customers. We remain disciplined in pursuing opportunities that align with our customer protection, commercial requirements and return expectations as we look forward to providing updates as these discussions advance.

We continue to see favorable market dynamics that could expand opportunities beyond our current 9 gigawatt pipeline and are assessing execution pathways to advance and integrate that additional growth into our pipeline.

Slide 9 highlights the continued progress we are making to move our data center strategy from commercial agreements through regulatory approval and execution. In June, the IURC approved the original Amazon special contract, the related power purchase agreement and the generation resources proposed to support the agreement. Parties also agreed to support expedited procedural schedules of 90 to 120 days for future agreements.

This approval represents an important validation of the structure and establishes the foundation for advancing future data center agreements. On July 17, we filed NIPSCO's request for approval of amendments to its existing Amazon data center, electric service agreement and the associated PPA with GenCo. Collectively, the amendments increased Amazon's contracted low by 400 megawatts, which we announced with our first quarter earnings and are already incorporated in our near and long-term guidance. We are seeking final order by November. We also continue to execute on our Alphabet partnership receiving IURC approval of the agreement in July. We are ready to energize this project, which is on track to occur this summer with load expected to ramp to full capacity by 2030. We are encouraged by the progress we have made and remain focused on converting this momentum into disciplined execution. Our teams are advancing the regulatory, commercial and operational work necessary to serve these customers successfully and deliver the benefit embedded in our agreements. With that, I'll turn the call over to Shawn.

Thanks, Lloyd, and good morning, everyone. Turning to Slides 10 and 11. Second quarter consolidated adjusted earnings per share was $0.16 compared with $0.22 for the same period last year. This brings our year-to-date consolidated adjusted earnings per share to $1.22, an increase of $0.03 versus the same period last year. Our year-over-year results reflect increased revenue from new rates and recovery mechanisms, including the continued benefit of rate implementation at NIPSCO Electric and Columbia Gas of Ohio and Pennsylvania. These benefits were offset by higher O&M, reflecting higher-than-usual storm activity and elevated expense to maintain workforce continuity during the ongoing union negotiations. These investments support a safe and reliable service and strengthened operational readiness across our business.

Second quarter results typically exhibit a shorter quarter for our business and regulatory activity begins to phase in across the quarter and will strengthen as recovery mechanisms are implemented throughout the year. Based on first half results and our current run rate, the business remains on track. Many of the principal drivers supporting our 2026 outlook are already in place, reinforcing our confidence in our full year guidance. We expect earnings growth to be more weighted towards the second half, supported by improved recovery mechanisms, new regulatory activity in Virginia and Ohio, and Alphabet's energization activity, which remains on track for the second half.

We also have line of sight to over $40 million of cost optimization initiatives across the business as part of our broader efforts to reduce costs for our customers. These initiatives include process improvements, technology-enabled efficiencies and and other actions designed to lower overall costs while maintaining service quality and execution against our broader financial plan.

Many of these initiatives are expected to continue to improve our cost structure beyond 2026 and will have a direct benefit to our customer rate structures. Our 5-year capital investment outlook remains unchanged, shown on Slide 12 with $21 billion of base business investment, $2 billion of upside opportunities and $7.6 billion of Genco capital investment supporting data center customers. Our consolidated plan remains diversified and highly executable. Investments span our gas and electric businesses across 6 states, providing flexibility to allocate capital based on customer needs, regulatory frameworks and the timing of recovery.

Slide 13 highlights additional investment opportunities that are not currently included in our base or upside plans, including electric generation to meet MISO resource requirements, gas and electric transmission and system modernization to enhance the resiliency of our systems, MISO long-range transmission projects to expand grid reliability, FEMSA compliance, and advanced metering infrastructure to enhance safety and service for our customers.

We are actively advancing these opportunities and developing the investment thesis in collaboration with stakeholders. As these projects progress, we will remain disciplined in selecting investments that deliver attractive risk-adjusted returns while supporting constructive recovery and creating meaningful value for our customers and communities.

Slide 14, while unchanged, continues to highlight the generation additions and project pipeline supporting NIPSCO's ability to meet growing customer demand and advance the energy transition.

Turning to Slide 15. We are reaffirming NiSource's 2026 consolidated adjusted EPS guidance range of $2.02 to $2.07 per share. We are also reaffirming our annual base plan adjusted EPS growth rate of 6% to 8% through 2030 and our consolidated adjusted EPS compound annual growth rate of 9% to 10% from 2026 through 2033. Our capital investment plan supports base plan rate base growth of 8% to 10% through 2030 and consolidated rate base growth of 9% to 11% from 2026 through 2033. These commitments reflect our confidence in efficiently converting capital investment into earnings growth in a manner that is accretive to shareholder value.

With the IURC's approval of our Amazon and Alphabet special contracts, Genco remains on track to deliver incremental value to NiSource's consolidated earnings for 2026 and beyond, as shown on Slide 16. We look forward to sharing additional updates as we progress through the year and as we build on our momentum with confidence to deliver incremental value as a result of our data center agreements.

Slide 17 highlights our 5-year financing plan. We remain committed to maintaining FFO to debt of 14% to 16% in each year of the plan, supported by a balanced mix of cash from operations, long-term debt, annual equity issuance of approximately $400 million to $600 million in minority interest contributions. As we execute, we will continue to evaluate financing decisions based on market conditions, project timing, credit metrics and long-term shareholder value. This disciplined approach allows us to derisk the plan while preserving the flexibility necessary to advance future opportunities.

And finally, Slide 18. We remain confident in our ability to deliver our 2026 outlook and long-term financial commitments. Our regulatory execution provides visibility into earnings and cash flow, our capital investment plan is diversified across businesses, jurisdictions and investment categories. Our operational initiatives are supporting productivity and cost discipline. Our data center strategy adds a meaningful layer of growth while protecting existing retail customers.

We continue to build a strong track record of execution. Our commitment to customers, investors, employees and all our stakeholders remains central to everything we do. NiSource offers 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. We believe continued progress accessing unprecedented energy development and power demand resulting from robust economic development, onshoring as well as new data center development, truly differentiates the value proposition relative to many alternatives in the marketplace today. And with that, operator, please open the line for questions.

[Operator Instructions]

And our first question comes from the line of Julien Dumoulin-Smith with Jefferies.

Nicely done again. Look, maybe just to kick off here in light of the news this morning. Can you talk about the affordability backdrop and specifically today's disk order, if you can use that acronym that way or pronounce it that way. How are you thinking about tracker recovery and multiyear rate plan risk at this point? Again, I don't think today's development was necessarily surprising or shocking per se, but I'm curious on how you think about the road forward here specifically in response to the latest outcome this morning.

Yes. Julien, thanks for your question. So let me say, first of all, we are still in the midst of evaluating that order that occurred probably less than an hour ago. As we take a look at it, I will tell you that this decision is that really a reflection of the broader regulatory environment in Indiana. We believe Indiana will continue to be a constructive regulatory environment for NIPSCO. So the decision doesn't preclude us from seeking recovery of that investment in future regulatory proceedings, including applying for other trackers for recovering those costs and rate case. I think the signal we got out of that order is we need to continue to invest but do a better job of demonstrating the benefits of those investments, which we will do.

So we are confident that this commission is constructive. They want us to continue to invest in the natural -- because this was a natural gas, to say want to continue to invest in the natural gas system to a better time to demonstrate the benefits and come back on the recovery of those costs.

I think with respect to broader affordability, of course, when you think about all the affordability issues that are occurring, they've occurred mostly on the electric side. here in Indiana. I think for us, so I'd say, gas is not in the cross here, but we'll pay attention to affordability. We want to invest prudently.

We continue to do a good job of taking cost out of the business, making sure we're allocating capital efficiently, and we'll -- we're happy to engage with the commission on any other affordability issues they have associated with the gas business in Indiana.

Excellent, right. But it doesn't change your rate case timing right, obviously.

It does not.

Right. Excellent. And then if I can get back more to an ongoing question here. I mean, can you speak a little bit to the backdrop here on the 3 gigawatts. I mean, Lloyd, I certainly heard the tone of your voice in talking about where you stand on these strategic negotiations, how advanced are they? And specifically, there's been some public reporting around these large on developments in La Porte County specifically. I'd love to hear your latest thoughts and any color you can add around where those, in particular, stand state seems very keen to see some of this stuff materialize. Can you comment at all?

So what I'll comment is we -- I think we did a joint announcement with Microsoft back in 2024, and we've been talking to Microsoft since then, but I'm not going to comment on that specific opportunity. What I will comment on is I talked in my comments about we signed 4 gigawatts. We're active with strategic negotiations for another 3 gigawatts, and we have another 2 gigawatts behind that. We're also looking at the system to see how we can expand beyond those 9 gigawatts. So we like where we are. We think the data center business is a huge opportunity for NiSource/NIPSCO. We think that a key to affordability is this Genco model, the fact that we're giving back $1.4 billion to our customers. And as we add more data centers, that number grows, not including the thousands of jobs that will occur as a result of data center development.

So I know I didn't answer you directly in commenting on Microsoft and Laport. I do say we like where we are. We're confident that we're going to execute and looking forward to reporting more information to you guys as soon as we have it. Michael, do you want to add anything to that?

No, I would just echo the comments that we're very confident in our pipeline. We only have more confidence in it as we continue to have these discussions and negotiations. And just like we've done previously as they come to fruition. We will be very disciplined in communicating those once they occur.

Our next question comes from the line of Shar Pourreza with Wells Fargo.

Actually, it's Andrew Kadavy on for Shar. I was wondering, could you guys maybe give us some expectations for what we should expect out of the August 7 Technical Conference on the ROEs and the trackers.

So our expectation is, I think the results will be balanced. They will be collaborative I think that when you look at the affordability report, they looked a lot of build transparency. I think that we want to take a hard look at a group around multiyear rate planning and the ROE in how much risk should be applied to ROEs with respect to multiyear rate planning. A lot of this was contemplated in House Bill 1002 in that legislation. So we're optimistic here. We think it will be balanced. We think it will be, again, be good for customers, we think we'll have a lot of input into the results of that. Melody, anything you want to add to that?

You summarized it, I would say, Lloyd, completely. We do believe it will be balanced. And we understand the importance of the commission having this hearing on the seventh. And so we're just awaiting any findings, and we'll participate and cooperate with the IURC.

And then switching gears a little bit to Genco. With earnings starting this year, when should we expect kind of the segment be broken out should be this year, maybe next year or when there's more ramp load?

Shawn, do you want to add that?

Yes, absolutely. Yes, we continue to be on track to start reporting segment information by the end of the fiscal year.

Next question comes from the line of Nick Campanella with Barclays.

Maybe just really quick on the T disk. I know you're still digesting it, but just mechanically, if you could just kind of clarify for folks, is a capital tracker that would kind of [indiscernible] up in '27, if I have that right? And how much is the capital? And just is there a way to think about the EPS impact?

Shawn, you want to look at that?

Yes. What I'd answer, Nick, is Lloyd hit the important point, which is the thesis and the need for this investment inventory is unchanged. In fact, the commission is encouraging NIPSCO to invest in all reasonable and necessary projects. Then we need to focus on demonstrating these projects as reasonable and necessary, which was part of our filing. We'll look at options for us to include this CapEx across either the T disc mechanism itself, the FMCA, which is another mechanism that can account for and qualify some of this investment as well as in rate case activity at NIPSCO Gas, which can include a forward look on CapEx investments. So we don't believe the CapEx plan is unchanged. We'll look at the flexibility we have across the array of options that we have in Indiana to recover that CapEx. So we're not reporting any change in CapEx plans or any change in EPS outlook as of today.

Okay. And then maybe just kind of going back to the 9 gigawatts and doing the study to see what you can do beyond that. It just it seems like you're progressing well on the data center pipeline. I mean is it possible that you've executed agreements that just haven't been disclosed yet? And if so, what's preventing you from talking about those?

Again, I would say, let me just -- things are progressing well. I think that we have a lot of confidence in our ability to execute those agreements. And when we have the appropriate information to disclose to the market, we'll get it to you as soon as we can.

Next question comes from the line of Nick Amicucci with Evercore ISI.

Just a couple of quick ones for me. I know -- so obviously, a lot of political rhetoric is kind of out of Indiana and I guess if we could just kind of level set at the risk of kind of sounding like a broken record, I feel that we asked this quarter-on-quarter. But just I guess what is the governor's kind of ultimate objective? And how do those align with what you guys are seeing and -- across the state?

Yes. The way I think about it in spite of the activity that you're seeing in Indiana and specifically around the commission changes, we believe and we -- and some of our conversations believe that Indiana will continue to be a very constructive regulatory environment. I think when you look -- we talk to the governor and all the relevant stakeholders, I think everyone is aligned on the importance of economic development. The growth is the key to affordability in Indiana. And we believe that the data center opportunity, reshoring manufacturing all of those things, not only I'll deal with affordability. If you think about what we're doing, the $1.4 billion back to customers, but the thousands of jobs being created in the state of Indiana as a result of that economic development. So I think there's significant alignment around that. I think that we're all focused in that area, and

I think that, that's what the market should pay attention to because I mean no one is deviating from that at all. We also understand affordability is important, but the key to that is economic development.

And then as we think about -- so obviously, just kind of looking at Slide 12 here, very helpful. And as we kind of think about the upside to the base plan, I guess, how -- just because there's a little bit layered in 2026 and a little bit in 2027. And so it seems, obviously, '29 and 2030 kind of the [indiscernible] of it. Just as we think about like the needed expectation for some type of an announcement or the ability to execute on that upside? Like how -- from a timing perspective, is it -- is that upside able to be pushed into 2027 and then you still hold the entirety of that $2 billion in the capital plan? Or just trying to think through that.

Shawn, why don't you handle that?

You bet. Just to square the upside point, just to clarify, pertains only to the base business, it does not include any Genco CapEx. So the $2 billion inventory is largely attributed to generation, some gas AMI and FEMSA-related work. economic development, T&D on the electric side. So there's an array of options in there. They don't require disclosure. We can usually work those directly into our plan in the context of either the tracker programs or the regulatory recovery mechanisms we have. We still have the flexibility to do that. And we still believe that some of the 2026 CapEx will get executed and it doesn't change the outlook of either the $21 billion inventory, the current year guidance nor the outlook that up to $2 billion of upside could still flow. So no change to any of that. The thesis of that is currently being worked into our existing programs and plans, and we still retain the flexibility to achieve all of that either in '26, '27 and beyond.

Next question comes from the line of Travis Miller with Morningstar.

Just to stay on the whole affordability theme. Can you talk a little bit about how you're thinking about schedule and time line as you move through this affordability discussion overlaying your rate case potential filing at some point in the next year or 2. What's your thought in terms of that timing element do you want to get through all the affordability discussions before doing a rate case in Indiana or are you happy to do them together?

I think August 7, we'll learn more about the affordability conversations and more importantly, the outcomes of those conversations. Those are not connected to our rate cases yet. We are studying when we're going to file our rate cases and when we need cost recoveries associated with those. So I would not connect those two. I think that the August 7 conversations and the outcomes will inform when we decide to file rate cases. I mean we know that we have to go into -- in terms of multiyear rate planning and filing the second half of 2028, and that hasn't changed at all.

Is the rate case filing a -- rate case filing the way that you'll return those customer savings from the data centers? Or is there a separate mechanism for you to do?

No. Once we energize -- after you get the appropriate regulatory approvals, and we energize those savings will start to flow immediately. And [indiscernible] show up as debt [indiscernible] the customers' bill.

[Operator Instructions]

Next question comes from the line of Stephen D’Ambrisi with RBC Capital Markets.

Just a follow-up, and you made a comment in response to Julien's question, just about looking at the system and potentially seeing how you can expand beyond the 9 gigawatts I guess can you just explain what you mean by that? And/or what would be required like across the system? Is it other than just more generation? Is it transmission? Is it -- and then just also does that mean, like I might to interpret that, that the up to 9 gigawatts is like a constrained pipeline and that there's developing opportunities or some other bucket beyond that? I just want to understand kind of the commentary there.

I am going to throw this question to Michael Luhrs, our Chief Commercial Officer.

So basically, I mean, it's just part of our normal process that we work through. And it's not pointing to any specific constraints with the 9 gigawatts. It's literally what Lloyd said, it's looking beyond the 9 gigawatts and the opportunities there. So we're consistently looking at the pipeline and facilitating that and also what we could do an expansion beyond it, given the demand we're seeing from counterparties and that means we're looking at all the factors related to that, whether that be land, zoning, transmission, fuel supply, equipment, et cetera, and just planning ahead like we've consistently done to enable that pipeline growth as we see it occur. We feel good about it. We feel good about the opportunities, and you should not interpret that we're looking at the ability to expand further as any sign of a constraint, but more is preplanning so that we can focus on execution.

Understood. Very clear. And then just as a follow-up, I understand you're still digesting the order, but from my read, it looked pretty clear that they are indicating that you should use the FMCA at a minimum and maybe some other preapproval tools. So can you just highlight, I guess, roughly how much of the ask from a capital standpoint was federally mandated spending?

We don't disclose the breakdown in the inventory by state nor by mechanism. But we're confident we have recovery mechanisms to secure all of our 2026 and 2027 CapEx and earnings guidance. We'll continue to work with stakeholders to understand on a longer-term basis, how the multiyear view of this inventory should get recovered. However, we're confident that we have the avenues in play for the near term.

There are no further questions at this time. I would like to turn the call back over to our CEO, Lloyd Yates.

Again, thank you for your interest in NiSource. We appreciate the questions and look forward to talking to you soon. Thanks.

Ladies and gentlemen, that concludes today's call. Thank you all for joining and you may now disconnect.

Hello, and welcome to NiSource First Quarter 2026 Earnings Conference Call. Please note that this call is being recorded. [Operator Instructions]. Thank you. I would now like to turn the call over to Durgesh Chopra, Chief Head of Investor Relations. Please go ahead.

Thank you. Good morning, and welcome to NiSource's First Quarter 2026 Investor Call. Joining me today are President and Chief Executive Officer, Lloyd Yates; Executive Vice President and Chief Financial Officer, Sean Anderson; Executive Vice President of Technology, Customer and Chief Commercial Officer, Michael Lowers; and Executive Vice President and Group President of NiSource Utilities, Melody Birmingham.

Today, we'll review NiSource's financial performance for the first quarter and share updates on operations, strategy and growth drivers. Then we'll open the call for your questions. 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 NDA sections of our periodic SEC files.

Additionally, some statements made on this call relate to non-GAAP financial measures. Please refer to the 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.

Thank you, Durgesh, and good morning, everyone. We appreciate you joining us today. I'll begin on Slide 3. At NiSource, our mission is to deliver safe, reliable and competitive energy that drives value for our customers. Our disciplined capital deployment, operational excellence and constructive regulatory frameworks remain the foundation of our business strategy. The first quarter of 2026 reflects continued execution of this strategy, supported by a robust regulatory foundation, ongoing operational improvements and a commitment to our customers.

NiSource's value proposition is anchored in regulated utility operations across 6 highly constructive jurisdictions, providing diversification in both asset mix and regulatory environment. As we continue to modernize our electric and gas infrastructure, we are delivering on our core objectives by advancing innovative solutions such as NIPSCO Genco, partnering with Amazon and now Alphabet, to recognize higher and faster savings to customers. In addition to the announcements made a few weeks ago, I am pleased to share another expansion, an incremental 400 megawatts of capacity serving Amazon.

Given the present inflationary climate, the value of these partnerships is tremendous, unlocking cost savings totaling approximately $1.4 billion for our existing customers over the next 15 years. Moving to Slide 4. Collaborative regulatory and stakeholder relationships while operating with excellence paves the way for NiSource to execute on its financial commitments. NiSource continues to work alongside stakeholders through regulatory processes to ensure resources are available for critical investments to protect our system, serve our customers reliably and grow local economies all while balancing the impact these investments have on our customers.

Working collaboratively with stakeholders were able to support enhanced rate making practices in our jurisdictions and advanced legislative priorities. Such as Indiana House Bill 1002 and Ohio Senate Bill 103 to help ensure fair, balanced outcomes for our customers and our communities. A key tenet to our operating plan is to work efficiently and improve our systems and processes, leveraging AI and technological upgrades to improve both efficiency and reliability for our customers. Today, we reported first quarter 2026 consolidated adjusted EPS of $1.06, which accounts for 52% of our projected midpoint earnings guidance.

We are reaffirming our 2026 consolidated adjusted EPS guidance of $2.02 to $2.07 per share, and we are increasing our consolidated adjusted EPS CAGR 100 basis points for 2023 to 2033 to 9% to 10% towards the high end of that range through 2030. We driven by the robust portfolio of investment opportunities supporting data centers. Turning to Slide 5. At NiSource Safety remains our top priority and the foundation of operational excellence and our first quarter results reflect the strength of that commitment. We delivered the safest first quarter on record for employee injuries dating back to 2016 through strong winter preparedness and disciplined field execution.

We also continue to advance our proactive risk reduction programs across the system, completing over 11,000 miles of leak survey in the quarter, helping identify and mitigate 113 large volume leads well above plan. We exceeded our targets for both electric pole inspections and replacements for the quarter and maintain strategic execution in our cross-border program reinforcing the long-term resilience of our infrastructure. These results underscore the operational discipline of our teams and our continued commitment to delivering safe, reliable service across our footprint. The Apollo continuous improvement team is focused on boosting operational efficiency via programs like Fleet focus to reduce idling and rightsized fleets, streamlining IT applications and using AI to improve permitting, invoicing and locate screening.

AI and analytics are improving NiSource's operations via the work management intelligence platform. enhanced spend visibility and supply chain enables faster procurement while AI contract tools have increased productivity over 20%. These solutions are expanding to customer and back-office functions for greater efficiency and service quality. We continue to engage proactively with stakeholders and regulators in all jurisdictions as shown on Slide 6.

Our regulatory strategy is informed by thoughtful, careful consideration of customer affordability and cost pressures, ensuring we proceed in a manner that balances these concerns. As a strategic organization, we adapt to evolving sensitivities, ensuring we operate with both efficiency and effectiveness as we navigate new opportunities and challenges. We remain committed to engaging transparently throughout the regulatory process, providing timely updates to stakeholders on our investment plans and priorities only as they advance through proper channels. This approach ensures all parties are informed by respecting regulatory protocols and supporting safe, reliable service.

Leveraging riders has consistently practiced in Ohio and other states enabled us to address affordability issues for customers by minimizing the need for frequent rate cases and by better timing capital allocation and recovery. This method supports continued investment in our infrastructure, maintaining safety and reliability while offering a balanced solution for system integrity and customer interest. We also support legislation such as Indiana House Bill 100 a that adopts measures like levelized billing to protect customers from bill fluctuations caused by weather-related usage spikes.

In Pennsylvania, we have flexibility in our plan to address system modernization at a patient method of recovery, which reflects stakeholders' feedback while also ensuring service can be safely delivered. As we prioritize supporting our communities through capital investment that ensure safe, reliable service and foster economic development, we are in an active dialogue with stakeholders to highlight the value of our partnership and investments. In March, NIPSCO issued a second federal order requiring the continued operation of our Shaper coal plant.

Our planning corporate testability to accommodate this directive reflecting our commitment to full regulatory compliance while maintaining customer affordability, financial stability and reliability. We're finding ways to drive direct savings to our customers by entering into strategic partnerships with data center customers. By leveraging the Genco regulatory model, our agreements with Alphabet and Amazon are expected to deliver annual savings up to $124 per year for residential customers, offering greater benefits that now accelerated time line than initially forecasted.

Our commitment remains to transparently communicate with all stakeholders, providing timely updates on regulatory outcomes, project development and anticipated benefits for both customers and communities. Our priority is delivering sustainable solutions that fulfill present in future demand while maintaining our promise of value and excellence in service. With that, I'll turn it over to Michael Luhrs to dive deeper into the new data center strategies.

Thanks, Lloyd. I'll begin on Slide 7. Genco was designed for speed and flexibility to support growing energy demand in Northern Indiana, while simultaneously achieving cost savings for existing customers and driving economic growth in the communities we serve.

NiSource remains steadfast in fulfilling the commitments we have made to stakeholders, regulators and customers and our ongoing focus ensures that promises may or promises delivered, reflecting our integrity and reliability in every aspect of our operations. We have recently made several advances on this initiative that now support $1.4 billion in customer savings. A new energy infrastructure agreement with Alphabet, 2 expansions on the Amazon agreement to accelerate and increase our service and the creation of the pooled resources approach, which enables both new and ongoing customer needs, which I'll speak more about shortly.

These developments highlight Genco's unique innovative approach to serving data centers by providing speed to market, shielding retail customers from investment costs while reducing their monthly bill and strengthening shareholder value. Now on to Slide 8. We're excited to be launching a new partnership with Alphabet. By employing 340 megawatts of pool resources, including advanced battery solutions and utilizing available market resources will begin service this summer, and we'll expect to achieve full ramp by 2030.

This 15-year contract will provide faster access to energy than previously anticipated and accelerate savings benefits to customers. Moving to Slide 9. In Amazon has continued to emphasize investing in the state of Indiana, and we are very pleased to report both an expanded collaboration with Amazon by growing their ultimate investment in the state and also in an accelerated time line to deliver energy to Amazon. Over 400 megawatts of contracted generation will serve the enhancements to the existing Amazon data center strategy and will help our retail customers realize savings faster and ultimately grow their total bill savings up to $124 per customer per year.

To support growing large load demand, we are pursuing a pool generation strategy that allows us to efficiently develop and manage a diversified portfolio of resources access through Genco, as shown on Slide 10. The pool operates as an aggregation of assets similar to a traditional utility portfolio, matching large load customer demand with a flexible asset base. As we add new data center customers, the asset pool scales accordingly. This initial pool of approximately 800 megawatts is sized to meet load requirements plus applicable reserve margins.

The pool provides flexibility to add assets over time as new customers come online. Importantly, the structure ring fences costs and risks so that the costs associated with these large loads are isolated from our broader retail customer base and are recovered through our bilateral contracts, while still allowing us to optimize resources, cost and system reliability. The incremental and accelerated megawatts of these agreements enabled by Genco will increase savings to existing customers. The Alphabet and Amazon investments will also drive economic development by creating new jobs, expanding the tax base and supporting the development of a skilled workforce in Indiana. This positions the state as a leader in technology-driven growth and energy infrastructure advancement.

This differentiated business model of Genco and pool assets protects and benefits existing customers and enables us to serve new large load customers with speed and flexibility. We have a strong pipeline of opportunities to serve new and existing customers, as shown on Slide 11. We are moving customers through the pipeline, progressing them from developing opportunities to strategic negotiations and into signed contracts.

Even after securing approximately 800 megawatts of additional capacity to serve Alphabet and Amazon, demand remains robust with 3 gigawatts of strategic negotiations and line of sight to approximately 2 gigawatts of developing opportunities. We believe there is a well-defined path for scaling through sustainable growth and we are committed to pursuing it in a thoughtful and differentiated manner. As demonstrated on Slide 12, we are progressing our strategy through achievement of regulatory and construction milestones. The original Amazon contract is pending commission approval and is expected in June ahead of civil site work later this year and load energization beginning in 2017. Upon IURC approval of the Amazon contract settlement, our new Alphabet and the Amazon agreements will be subject to an expedited regulatory review process of 90 to 120 days for approval resulting in anticipated orders later this year. We are well positioned to execute these projects efficiently, safely and in tandem with our ongoing operations.

We remain active in the commercial supply chain to capitalize on available opportunities and our strong Quanta partnership positions us to successfully secure skilled labor to execute. Together, these advantages enable us to deliver on our commitments and drive long-term value for our customers and stakeholders. With that, I will turn the call over to Shawn.

Thank you, Michael, and good morning, everyone. I'll pick up right where you left off, highlighting the advancements in our data center business. The Genco business model offers differentiated flexibility to achieve speed to market for new customers disciplined savings for our existing customers and advancing economic development locally for our communities. As we pursue opportunities to serve data center customers we have designed these strategies with multiple layers of risk protection to Safeguard shareholders and existing customers. Rate structures and contractual terms are designed to provide full cost recovery and achieve appropriate risk-adjusted returns. Revenue strategies, such as minimum demand charges and long-term commitments, helped establish a secure revenue floor.

Credit and counterparty risk is managed through credit support requirements by diversifying exposure across highly rated counterparties. Contractual protections allocate construction, operating and market risks to the party's best positioned to manage those. We have embedded risk management into our framework for contracted capacity purchases, which are secured, reducing our reliance on future market volatility. Importantly, the structure is designed to ring-fence this activity from the core regulated business. preserving balance sheet strength and minimizing volatility, all while enabling disciplined capital deployment into a strategic and growing investment plan.

We will continue to be thoughtful of how to best protect all stakeholders while we advance this unprecedented growth opportunity. Now let's focus on Slides 13 and 14 in our financial results for the quarter. First quarter consolidated adjusted EPS was $1.06, an $0.08 per share increase versus the $0.98 reported in the same period last year. This 8% year-over-year increase is primarily driven by regulatory execution across our base business, recovering capital investments from 2025's capital and regulatory plans. By achieving 52% of our midpoint earnings guidance through Q1, NiSource is well positioned to achieve our full year financial objectives.

Shown on Slide 15, our 5-year capital investment remains unchanged for our base business, which includes $21 billion in investments and $2 billion in upside opportunities. Our consolidated plan is now enhanced by $7.6 billion in Genco and data center-related capital. We are actively advancing incremental investment opportunities shown on Slide 16, which include electric generation, gas and electric transmission and system modernization, MISO long-range transmission projects FEMSA compliance and advanced metering infrastructure. These initiatives are not part of our base or upside plans, yet they present significant potential for long-term value creation.

We are actively pursuing commercialization efforts in developing the investment thesis in collaboration with stakeholders to maximize the value generated by these opportunities. Reviewing Slide 17, the NIPSCO system continues to experience significant progress through consistent addition of generation capacity and with a substantial pipeline of projects underway to address growing customer needs and drive diversification in generation technology. Notably, the figure for signed Genco contracts has increased reflecting momentum in securing new agreements that will further strengthen grid reliability and diversification.

These advancements underscore NiSource's consistent track record in delivering large-scale construction projects. positioning the company to serve a broader customer base, foster data center expansion and advance its long-term strategic goals. Turning to Slide 18. We are reaffirming NiSource's consolidated adjusted EPS guidance range for 2026 of $2.02 to $2.07 per share. We have increased our long-term guidance by 100 basis points and expect to deliver 9% to 10% consolidated adjusted EPS compound annual growth through 2033 and with performance tracking towards the high end of that range through 2030.

We continue to demonstrate disciplined capital deployment with Genco expected to deliver returns that support increasing our earnings growth rate stemming from our projected 9% to 11% rate base growth. This guidance reflects our confidence in efficiently converting capital into earnings in a manner that is accretive to shareholder value. We have started 2026 strong and are confident in our plan. We are committed to keeping O&M costs steady during the planning period to ensure sustainability and reduce potential risks.

Our plan remains highly executable. Projecting modest customer demand of less than 1% across all customer classes and which applies conservative financing assumptions through 2030. The regulatory actions completed last year have improved our visibility into 2026 performance, aligning with the regulated revenue increases necessary to achieve our stated guidance range. Looking ahead, Slide 19 reflects our improved outlook for Genco as it is poised for incremental earnings accretion in the future years. We have increased our 2030 Genco EPS guidance now projecting $0.25 to $0.35 per share. Our 2033 outlook is also higher as we're now guiding to $0.40 to $0.60 per share.

These updates reflect our strong momentum and confidence in delivering incremental value as a result of our new and enhanced data center agreements. Slide 20 highlights our 5-year funding plans, we are reaffirming 14% to 16% FFO to debt in all years of the plan, a balanced mix of cash from operations, new long-term debt and $400 million to $600 million of equity each year is expected to further strengthen the balance sheet. This reflects a $600 million increase in our CapEx plan. The financing implications of contracted capacity and a pipeline of investment opportunities that continues to strengthen. Based on our consistent disciplined execution, derisking the plan while preserving flexibility we believe a balanced financing plan will help sustain the demand we continue to see across the pipeline.

And finally, Slide 21, we've had a strong start to the year and remain on track to achieve our 2026 financial targets. We are confident in our strategy and our ability to deliver sustainable value for our customers and shareholders. NiSource offers 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. We believe continued progress accessing unprecedented energy development and power demand resulting from robust economic development, onshoring as well as new data center development truly differentiates the value proposition relative to many alternatives in the marketplace today. And with that, operator, please open the line for questions.

[Operator Instructions]. Your first question comes from the line of Shahr Pourreza of Wells Fargo.

This is actually [ Andrew Cadaivi ] in for Shahr. Can you talk about what you're seeing in discussions with potential customers that has allowed you to firm the 1 to 3 gigawatts in your strategic negotiations bucket to 3 gigawatts?

So yes, Andrew, I can talk about that. To date, we've signed approximately 4 gigawatts of capacity per day to the centers when you couple that with our current engagement with multiple counterparties and strong demand, I think those facts support our confidence in advancing the 3 gigawatts of pipeline opportunities that are in active negotiations. I think you also add to that the Genco model represents a compelling opportunity and a competitive advantage to serve these large-scale growth while benefiting our existing customer base. So we're very confident in our ability to execute on that.

And then with only $600 million of CapEx to serve the, I guess, incremental 1 gigawatt of hyperscaler load it's a pretty capital-light construct. So with the market capacity purchases you're making, how do you earn on those purchases. Is there -- can you give us some detail or color on how that flows through to earnings?

Shawn, do you want to address that?

Yes. So as we think about the way that NiSource and really Genco can create value for stakeholders, we look at the total amount of capacity that we're going to be able to generate what the cost is for that and what an appropriate risk-adjusted return is when you net those 2 out, that's what creates the earnings per share. As you mentioned, some of that is through capacity purchases. Some of that will be through constructing assets. And the net of that is what we guide to in the Genco guidance.

Your next question comes from the line of Bill Appicelli of UBS.

Just maybe along the similar lines of the question was just asked, but I mean when we think about the incremental needs here to service what could be part of the additional megawatts to come under strategic negotiations. I guess, how do we think about that resource mix in terms of whether it's additional generation to be built? And then sort of related to that, I guess, how do we think about the incremental earnings benefit of this, right? Is this more linear? Or does the accretion improve as you scale the size of the Genco?

Shawn?

Yes, I don't think it's linear. I do think it's project-specific and largely driven by what a customer needs and when they need it by. From there, we try to find the most attractive resource that's appropriate to serve that demand, both short term and long term and the most reasonable cost to achieve that on a long-term risk-adjusted basis.

Okay. So I guess you'll just sort of update that. As you announced, it will be, to your point, bespoke for each deal, right, in terms of what the actual earnings benefit will be.

That is correct. The Genco model allowed us to provide bespoke solutions to our counterparties. And as we add to that coal will make it clear that we're adding that capacity in and how we're serving that customer.

Okay. And then just under the framework of the affordability, you've increased customer benefits here today. I mean, how is that resonating with the customer base with the sort of the stakeholders, both on the political and regulatory front. Maybe just speak to that, if this is being well received? Or how should we think about the impacts here?

So we believe it's being well received, not just the customer base, but the regulators. If you think about -- I mean, again, we keep talking about the benefits of the Genco model, but we're going to provide $1.4 billion of benefit back to customers, which is $124 per year of real money going back to customers and at the same time, we're building in state of Indiana, and we're creating jobs and benefiting the communities we serve. So we think that this model is a competitive advantage is compelling and being well received by all of our active stakeholders.

Your next question comes from the line of Steve Fleishman of Wolfe's Research.

Good morning. So I guess what's kind of interesting with these two recent deals as you're providing kind of time to power availability, which obviously is hard to find, and people pay for. How much more timely like time to power the next few years access could you feasibly do because that clearly is something that I think a lot of customers want.

Michael?

So we haven't disclosed like the exact amounts of what we could do, but I will say that we continue to be very active in the commercial supply chain and we are focused on that speed to power. So we try to ensure that the capabilities, the resources, the comp structure there, everything from site development through to execution. So what I would say is at this point, though, we're very focused on making sure we execute these effectively. We are also very focused on continuing to execute on that speed to power in this near-term time frame to be able to provide counterparties with what they need and feel strongly about -- that's why we feel strongly about our 3 gigawatts in our strategic negotiations.

Okay. And then just the 9 gigawatt total not to get too dreamy here, but just is that some kind of limit on the opportunity in the region or maybe just on your transmission system? Or is that something that would actually be larger over time?

So I wouldn't view it as a limit. What I would view it as is we're very disciplined and methodical in how we proceed through our pipeline in negotiations. We like to provide strong confidence in our execution and in our capabilities. And we will seek to maximize the opportunity that this can provide to stakeholders and our shareholders and our customers with what we do. And I would say that Indiana is a very strong territory by which to continue to develop opportunities given the geographics of the area, given its proximity to large centers like Chicago, given the transmission system backbone that we've discussed before, that's 345 with lots of redundancy, the gas supply situation.

So I would look at that 9 gig as what we are focused on in that pipeline, but not what the ultimate opportunity might be.

Okay. And then switching gears, I have to ask just on the recent governor letter to utilities in Pennsylvania and what your how you're interpreting that? And what does it mean for your future rate case strategy and investment in Pennsylvania, if anything?

So Steve, right now, I'd say we're actively engaged intensively with all the stakeholders as we develop a response to Governor superiors letter. If you think about last year, we came out of December and we had a very constructive regulatory outcome for a rate case, and we're evaluating future regulatory mechanisms such as looking at our trackers, to support future capital investment. So we do have mechanisms that can support future tracker investments. our 5-year financial plan that we have is built with a lot of flexibility, and that allows us to adopt to both opportunities and challenges.

So as we work with those stakeholders to address the governor's concerns, we will continue to emphasize the importance of safety and federal and state requirements and investments that we need to make to operate the system reliably. At the same time, we want to highlight the need to maintain a strong balance sheet to support those critical investments and then adjust accordingly. So it's something that me and the entire team were engaged in making sure that we're on top of this thing. We've seen and had great experience in Pennsylvania as a constructive regulatory state and we're going to try and understand what this means so that we can maintain and run our system efficiently and effectively.

SP1 Your next question comes from the line of Julien Dumoulin-Smith of Jefferies.

I appreciate it. Nicely done. Yet again, I got to say. Maybe just to pick it up on the earnings composition question. I know I'm not keen to disclose too much on the $0.15, $0.18 move up and guide. But how do you think about bifurcating that between sort of the rate base and own gen portion versus contracts? Then maybe the more critical question here is -- how do you think about the ability to own more of that gen over time? You talked here about this 800-megawatt pool. Is that something that over time you effectively would in-house, if that's the term -- and is that kind of another element of compounding growth maybe beyond the 2030 to 2033 period? How do you think about the evolution of your ability to own the related [ Gen ]?

I think that our -- as Shawn mentioned earlier, we get more customers and build what alcohol provide bespoke generation solutions. We will own some of that yet. We will own a -- probably a significant amount of that generation and try to provide what trying to provide the best solution to the customer as we negotiate these contracts. Michael, you want to add to that at all?

Yes. What I would add to it is, it might be helpful to talk just a little bit more about when we talk about bespoke solutions. We insured within the Genco model that we have the capability to serve 3,000 megawatt increments and also serve 300-megawatt increments. And in doing that, we've created the capacity to do those bespoke solutions that can meet those. The pool resources that we have -- that is the mechanism by which we will own all these resources that provided to NIPSCO to meet the resource adequacy. So our druthers and our focus has been to not have commodity risk or market exposure. So when we go out, we are getting contracted generation capacity 1 way or the other. I would look at it as we own effectively all of it when we're doing it. We are bringing it into that portfolio to serve those customers in a holistic fashion with speed to market.

Yes. And then the only piece I'd add to this, Julian, would be because it is not functioning directly off of a return on rate base model, the accretion dilution that we guide to both short term and long term and how we think about the potential for value creation over time doesn't necessarily require us to own it. It really helps us best monetize the capacity attributes in a way that's attractive to stakeholders both to our retail customers as we're exemplifying with the $1.4 billion in savings as well as to our shareholders as we expect really return on and of the cost of those assets over the life of the customer agreements and making sure that, that financial stability maintains.

Got it. Excellent. And then just to needle a little bit on this 3 gigawatt strategic negotiation here. How should we think about the gating items for conversion there? Is it dependent at this point on getting the approvals of Amazon and now Alphabet here? Is there some sort of serial nature to just get putting this in front of the IRC, et cetera? Or is it not necessarily precluded as far as you would set expectations. Obviously, you've delivered well against these targets, and it seems like you still got a ways to go against that 3 gigawatts too?

As I've said in the past, these are complex transactions and these negotiations take time. I wouldn't limit these to just Amazon and Alphabet. I've said earlier in the script and Michael said that we have -- we're talking to multiple counterparties here. And I think it takes -- it just takes time to get these things done. And get them done correctly. We've set our organization up and structured ourselves to execute more efficiently and more effectively, and that gives me a whole lot more confidence that we're going to get these done.

Got it. Excellent. And then just quickly on the ATM, how much latitude do you have for more deals now that you raised the ATM range? Or is that effectively utilize the CapEx increase there? I suspect you have some latitude.

Yes. We absolutely have a lot of latitude and our financing plan, the $400 million to $600 million annually that we disclosed today is already contemplated in the filed ATM structure. Therefore, we've got the capacity to handle that type of volume without impact.

Your next question comes from the line of Eli Jossen of JPMorgan.

Just wanted to circle back a bit to the speed to market theme that was touched on earlier, maybe within the context of the resource mix for the pool strategy, we've seen you use a mix thus far, but is there sort of a resource priority list that you have just in terms of executing that speed to market? And then maybe more broadly, do you have a an update on where you are in terms of land and equipment acquired for those new assets that we're adding?

Michael?

What I would say on the speed-to-market aspect is Other than -- we make sure that we are meeting our reliability, MISO, accreditation, IRC requirements and what we need to ensure that we're good stewards of the system and what we're doing for our customer base. We try to make sure we are deploying resources and capabilities across a broad spectrum of resources and bringing them into that pool and bringing them into that resource mix to do just what you said, which is to ensure speed to market and ensure the capability to be able to provide what the customers need and what our shareholders need in returns with those.

So it's not a prioritization of assets within that asset pool. It's really making sure that they meet that reliability requirements. They meet the necessity for being able to have the time to market, speed to market with the customers and meeting the MISO and accreditation. And we are very active in that. We are very consistent in that -- and I think what you're seeing here and how we're growing the portfolio from having CCGTs, having batteries, adding in additional contracted generation assets being things that are confirming market capabilities and resources is that continued mix will continue to grow, and we will add to that.

Understood. And then maybe just thinking about the upcoming URC approval process. I know you have a very helpful slide in your deck, walking through some timeline milestones. But can you just kind of provide increased color on what the next steps are procedurally and the time line for some of the review coming up? And maybe just to add on to that. I know there's been some discussion of development in La Porte County, where there's Microsoft has been active. So those have come out in the URC filings as well. Any color there would be helpful.

Go ahead, Mike.

So what I would say is Slide 12, I think, is a good representative slide of the progression and the progress that we have made through our regulatory process and how we're really executing on this in a defined sustainable and methodical manner. And you can see that as we've gone through it, it includes everything from like the zoning application approval in February, the acceleration amendment filed with the IURC. As we mentioned before, if the settlement is approved that, that would lead to an expedited approval process of these special contracts, which is 90 to 120 days, which just highlights another advantage of how we've structured this Genco model and the capabilities around it.

But we feel we have a great regulatory team regulatory team is working these through. We feel confident relative to these approvals and moving them through the process, and we will just continue to execute on that, and you can see the dates associated with -- we expect those by first half of 2026 and then moving into the actual construction phases with them.

Your next question comes from the line of Nick Amicucci of Evercore ISI.

Given kind of the time line, I think you guys might have just touched upon it, but I just want to kind of clarify -- just given the time lines, and we kind of have the data center pipeline through 2035, I guess, and then the -- it seems like there's the expedited approval process could aim is. But I just want to be clear, when we think about those up to 2 gigawatts of developing opportunities kind of later date, like what -- how quickly would we need to see those be brought into the fold of the pipeline? Are into kind of actually like signed capacity for them to actually be COD by 2035?

I think that those are -- those 2 gigawatts are what we call development opportunities. I think that how quickly they get bought into strategic negotiations kind of remains to be seen. What I'll tell you is there's significant demand in the Indiana region for hyperscalers and data centers I think as we think about more developmental opportunities up there. We'll study things like that. So there's no real time line for how quickly they get bought it. We have a long queue, and we have a lot of work to do that demand is high, and we'll get to it as our resources and equipment and things allow us to.

And as we've mentioned earlier, we'll continue that disciplined methodology. And as we discuss with the strategic negotiations and as was mentioned in the question prior around Microsoft and that the fact that land in Lepore. We continue to work those opportunities in just a very methodical manner. And as we do, we will continue to update like which gigawatts are in which portion of that pipeline of the portfolio.

Got it. And then just wanted to clarify, too. So there's no increase in guidance there's no consideration of the 3 gigawatts in strategic negotiations embedded within that, correct?

That is correct.

Your next question comes from the line of Paul Fremont of Ladenburg.

Great update. I guess -- my question is, I'd like to maybe better understand the role of Shafer generation potentially under a PPA in that 800-megawatt pool. And do you have sort of the ability for -- to shift the operating costs that are now being picked up by retail customers to the data center customers?

So today, the way we look at the shape, as I mentioned in my script, the second 202 order and we consider the shape or units part of our retail customer capacity. Our goal here is to continue to recover costs through the FERC process. And has there been no real consideration today of shifting that over into a PPA.

Okay. So there -- the pool of resources doesn't include any surplus generation that you're now getting from the Shafer plant?

That is correct. Shafer is not a Genco asset. Paper is a NIPSCO asset. So it is not part of the pool, and it is not part of those resources.

Yes. It's a regulated light asset.

And there's no PPA connection either to Genco?

That is correct. And there are no NIPSCO base assets that are serving our existing base customers that are within the pool or PPA to the pool.

And then I guess my next question is how long would it take to supply generation to prospective new customers. And I guess that would include these two customers or the expansion of AWS and Alphabet?

So remember, as part of the Genco model, every solution is a bespoke solution and they have bespoke ramp rates and all of those things go into consideration of timing and kind of generation we provide.

Great. And then I guess since Genco is growing as a percent of your total contribution, when can we sort of expect to see separate financials?

Shawn?

Yes, we'll break that out once we get to a place where Genco is a more material contribution to NiSource's ongoing financial results.

Your next question comes from the line of Travis Miller of Morningstar.

Fortunately or unfortunately, I'm going to follow on here a couple of lines of questions in your comments earlier. The pool strategy, do you need approval from the IRC for any new assets or any contracts outside of approval for just the data center contract? Essentially, are you able to serve that data center contract with any assets and purchases without regulatory approval.

SP1 So the existing process that we have with the IRC as Genco is a regulated entity as we filed a special contract with the IURC for approval. As we file those special contracts with the IURC 4 approval, we do provide them with information relative to what assets are being added to the system. The special contract is approved, that information on what assets are being added is typically within the special contract but does not require like a separate CPCN approval with it. So the pool strategy is a mechanism by which that we're able to effectuate through Genco in directly. And that comes out as special contracts with counterparties that the IURC will approve, if that makes sense.

Yes, absolutely. Okay. Sounds good. One other quick clarifying. I think you might have raised -- you might have answered this early, but just to clarify, the 9% to 10% growth includes only the existing Amazon, Amazon expansion in the half of that, right?

Correct. The 9% to 10% grower only includes signed customer contracts, not any no strategic negotiation.

Okay. Got it. And then the mechanism for flowing savings back to customers. I wonder if you could talk a little bit about that in terms of the $1.4 billion number, how that actually gets back to NIPSCO customers.

So that $1.4 billion is a defined mechanism within each special contract that distinctly lays out how that -- how those funds will be accretive and then provided back to the NIPSCO base. And in the end, it is a credit against the bills of those retail customers and of those customers that are on the electric generation side for NIPSCO. So it is a -- it is not a volumetric reduction it is a credit to those customers from what we're doing within these contracts.

Thank you. I'd now like to hand the call back to Lloyd Yates for closing remarks.

I want to thank all of you for your questions and your continued interest in NiSource. We appreciate it. Have a great day.

Thank you for attending today's call. You may now disconnect. Goodbye.

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 2025 NiSource Earnings Conference Call. [Operator Instructions].

I would now like to turn the call over to Durgesh Chopra, Vice President of Investor Relations. Durgesh, please go ahead.

Thank you, Tiffany. Good morning, and welcome to NiSource's Fourth 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, Customer 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 fourth quarter and share updates on operations, strategy and growth drivers. Then we'll open the call for your questions. 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 financial measures. Please refer to the 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.

Thank you, Durgesh, and good morning, everyone. We appreciate you joining us today. I'll begin on Slide 3. At NiSource, we exist to deliver safe, reliable and competitive energy that drives value to our customers. Creating that value depends on disciplined capital deployment, operational excellence and constructive regulatory frameworks that enable timely recovery of investments. These core principles generate competitive returns, strengthen our balance sheet and form the foundation of our business strategy.

Before we cover our standard business updates, I'd like to highlight the successful year for NiSource. In 2025, we effectively executed an agreement with Amazon and as detailed in our special contract filing with the IURC, we are anticipating $1 billion to flow back to NIPSCO customers, equating to an estimated $7 to $9 per customer per month upon Amazon's full ramp.

Our base business continues to deliver for our shareholders, achieving a full year adjusted EPS of $1.90 per share and FFO to debt of 16.1%, both results surpassing our guidance range. Today, NiSource's value proposition is driven by our regulated utility operations across 6 highly constructed jurisdictions, providing diversification in both asset type and regulatory environment. As we continue to invest in modernizing our electric and gas infrastructure, we remain focused on supporting economic growth, advancing innovative solutions like our GenCo model and maintaining a strong commitment to our customer affordability and stakeholder value.

On Slide 4, we highlight our key priorities. Delivering value for our customers has always been and continues to be one of our highest priorities. We have proactively deployed proven regulatory and rate design tools to mitigate bill impact and protect customers from external cost pressures. In Pennsylvania, customers benefit from the weather normalization mechanism, which prevents bill spikes during colder months and from a higher fixed charge that helps stabilize the impact of changing usage. These protections were negotiated during our last rate case and have already prevented heightened bill increases since implementation in January.

Similarly, in Ohio, our fixed variable rate design smooths the bill impacts associated with necessary investments to maintain system safety and reliability and can cut total bill increases in half relative to higher volumetric rate design structures. Our landmark agreement with Amazon further demonstrates our commitment to affordability. This agreement will return approximately $1 billion in value to our Indiana customers, translating into meaningful bill reductions over a 15-year period.

Customers also benefit from NiSource's scale and disciplined planning. During the recent severe winter storm, we leveraged low-cost gas from our storage assets, which serve roughly 75% of our total load at below market prices, which help limit customer bill impacts. In addition, our flat O&M objective across the platform constrains cost growth and reduces the pass-through of investment-related expenses to customer bills. Together, these proactive measures enable us to invest approximately $28 billion over the next 5 years to modernize and maintain our infrastructure while continuing to prioritize safety and reliability and targeting average annual bill increases of less than 5%.

We have advanced our gas system support by securing a final order in Pennsylvania and adding supportive legislation in Ohio, which will improve ratemaking and reduce regulatory lag. In Indiana, our contract with Amazon is pending before the IURC, with a decision expected in the first half of this year.

Today, we reported fourth quarter adjusted EPS of $0.51, bringing our year-to-date total to $1.90, and we are reaffirming 2026 consolidated adjusted EPS guidance of $2.02 to $2.07. Despite these strong financial commitments, we believe significant upside remains across the outlook of our plan from developing projects supporting data center growth, onshoring of manufacturing and robust economic development across our territories.

Now let's turn to Slide 5. At NiSource, safety is our top priority and the foundation of operational excellence. In 2025, we maintained ISO 55001 and API 1173 certifications, underscoring our commitment to a strong Safety Management System. Our investments in system resilience and emergency preparedness proved invaluable this winter. During one of the most significant storms in the last decade, while many communities across the country experienced widespread outages, our customers remain safe and warm with limited service disruption across our footprint. Over the past year, we accelerated critical safety initiatives, including installing over 545,000 smart meters and surveying more than 41,000 miles of pipelines with advanced mobile leak detection technology, both exceeding targets and enhancing system reliability.

Operational performance was further strengthened by leveraging AI, analytics and our work management intelligence system, which improved productivity and is being expanded into supply chain and reliability functions. Project Apollo continues to drive cost savings and process improvements, enhancing service quality, and we remain focused on customer affordability, targeting annual bill increases below 5% across our territories over the plan horizon.

Regarding our regulatory agenda on Slide 6, we secured important outcomes in the fourth quarter, including approval of our Pennsylvania rate case in December and continued progress across our tracker platforms. We expect to benefit from improved regulatory support in Ohio following recently enacted utility legislation. Together, these developments reduce regulatory lag, align cost recovery with investment timing and reinforce our constructive jurisdictional framework.

In Indiana, we continue active engagement with the IURC as we advance filings tied to generation transition, fuel recovery and our economic development initiatives. In 2025, the Indiana economic development team managed one of the strongest pipelines in recent years, supporting over 140 active projects across the service territory.

In Virginia, which remains the data center capital of the world, our team is filled at more than 40 data center inquiries in 2025. We are currently engaged in approximately 2 dozen active data center projects, advancing gas infrastructure opportunities to support customer needs.

As we look forward to our regulatory agenda in 2026, we currently do not have any pending rate cases. But as typical for our business, some level of regulatory activity will likely occur. We are committed to working collaboratively with stakeholders to make investments that maintain safe, reliable service for our communities. We also continue to engage actively with policymakers at both the federal and state level. In December, NIPSCO received a federal order directing continued operation of our Schahfer coal plant beyond its planned retirement. We will comply with this and any future orders we might receive.

Our capital strategy remains adaptable to meet regulatory requirements and to maintain financial stability. We filed a proposed new schedule for cost recovery with FERC in line with the DOE mandated coal plant extension. Our commitment to providing safe and dependable energy remains steadfast. We are monitoring developments related to EPA reliability regulations, MISO accreditation changes and state-level customer initiatives. Our diversified footprint and integrated electric and gas operations positions us well to adapt to evolving policy.

We have a well-defined plan for executing our data center initiative marked by key milestones as noted on Slide 7. Right now, we're advancing the Amazon project, and we are on track. On February 2, our zoning application for 5 parcels was approved by the Jasper County Commissioners, a key step for our data center strategy. This approval reflects our commitment to transparency and stakeholder collaboration as well as Indiana's support for economic growth.

Our next major milestone includes IURC approval of the special contract and commencing civil site work. We'll update you as we reach and progress towards key milestones over the next several quarters. We're focused on disciplined construction execution, leveraging our proven track record of delivering large-scale generation projects on time and on budget.

And with that, I'll turn the call over to Shawn.

Thank you, Lloyd, and good morning, everyone. I'll begin on Slides 8 and 9 with our financial results for the fourth quarter and full year. 2025 continued NiSource's track record of disciplined capital allocation and cost management to deliver on our financial commitments. The outperformance across 2025 was driven by strong financial management of capital, better-than-expected financing costs, outperformance from retail sales and sound cost management and constructive regulatory execution across all of our states.

For the fourth quarter of 2025, we reported adjusted earnings of $0.51 per share compared to $0.49 for the same period last year. For the full year 2025, adjusted earnings were $1.90 per share compared to $1.75 in 2024. Results reflect regulatory execution in Indiana, Pennsylvania and Ohio, partially offset by increased operating and interest expenses. Significant weather effects also impacted the fourth quarter, contributing about 70 basis points in FFO to debt for the full year. The impact was mainly due to the timing of weather events and a portion is expected to be passed back to customers in 2026 through regulatory mechanisms.

Our capital plan on Slide 10 includes $21 billion of base utility investment over the next 5 years focused on grid modernization, gas infrastructure replacement, safety and reliability. The Amazon project at GenCo represents $6 billion to $7 billion of capital investment through 2032 with the majority falling within the 5-year planning window. The contract is designed to align cash inflows with customer ramp rate and incorporates protections that support both credit quality and financial flexibility.

In addition to these guided CapEx plans, we maintain approximately $2 billion of upside capital investments, which supports our base business utility operations. Key investments include electric generation investments to comply with MISO's reliability standard and planning projects related to system hardening.

Beyond the base and upside plans, our teams continue to advance the incremental investment opportunities shared on Slide 11, including MISO's long-range transmission planning process and the development of Tranche 2 projects, PHMSA compliance and advanced metering infrastructure. We are evaluating these opportunities and we'll incorporate these projects into our base capital expenditure plan once we've completed the scope and estimation work necessary to launch those projects.

Our data center pipeline is shown on Slide 12 and remains robust, reflecting our ability to actively develop and serve a growing roster of new customers. We continue to engage in strategic negotiations for 1 to 3 gigawatts of new capacity, underscoring the strength and scale of demand in our markets. In addition to these advanced negotiations, we've identified up to 3 gigawatts of further developing opportunities positioning NiSource as a key energy partner for data center expansion and broader economic development objectives across our service territories.

On Slide 13, you'll notice that since 2021, we've nearly doubled the generation capacity of the NIPSCO system and built a robust pipeline of projects to meet rising customer demand and support the energy transition. These additions enhance grid reliability and diversification while demonstrating NiSource's proven ability to execute large-scale construction projects. They also position us to serve an expanding customer base, support data center growth and deliver on our long-term objectives.

Slide 14 captures a summary of our financial commitments. We are reaffirming NiSource's consolidated adjusted EPS guidance range for 2026 of $2.02 to $2.07 per share, which represents approximately 8% year-over-year growth compared to 2025. This is fueled by the base business guidance of $2.01 to $2.05, which is expected to grow 6% to 8% off of the $1.90 adjusted EPS achieved in 2025. In addition, in 2026, we expect GenCo to contribute $0.01 to $0.02 as it begins to ramp up its earnings contribution to NiSource. This drives a compound annual growth rate of 8% to 9% through 2033, supported by a 9% to 11% consolidated rate base CAGR through 2033.

We are committed to keeping O&M costs flat over the plan horizon to support sustainable operations and reduce future risks. In 2025, we proactively funded incremental initiatives focused on cybersecurity improvements, expanded leak repair activity and better leak detection, initiatives that lower system risk and protect our infrastructure. Our plan assumes modest customer growth of less than 1% across all customer classes and conservative financing assumptions through 2030.

Our regulatory execution in 2025 has increased visibility into 2026 results, with the regulated revenue increases necessary to achieve our guidance range, either already reflected in rates or pending approval. Our forecasts incorporate continued use of long-established capital trackers in nearly all our jurisdictions and are based on what we believe are realistic regulatory outcomes.

And I am pleased to announce another successful year of dividend growth for our shareholders. In January, the Board approved a 7.1% increase in the dividend for 2026 compared to 2025, reflecting our commitment to aligning dividend growth with earnings growth and maintaining our target payout ratio of 55% to 65% as outlined in our strategic plan.

The strength of our balance sheet is highlighted on Slide 15. We remain committed to maintaining FFO to debt between 14% and 16% throughout the planned horizon. In 2025, we achieved 16.1%, an increase of 150 basis points, exceeding our targeted guidance range. This was aided by strong internally generated cash flows from capital execution, increased equity issuances via the at-the-market program, junior subordinated note issuances and higher than typical cash flow receipts from the above-normal weather conditions we experienced in 2025. This positions us well as we look to execute on our financial plan through 2033.

We expect to fund our capital needs through a combination of operating cash flow, long-term debt and $300 million to $500 million per year of maintenance ATM equity at the parent. At the GenCo level, we retain the flexibility to leverage minority equity and project-level debt to minimize financing friction and maximize long-term shareholder value.

Turning to Slide 16. GenCo remains poised to deliver incremental value beginning in 2026 with guidance of $0.01 to $0.02 per share. We are confident in our strategic direction and look forward to sharing additional updates as we progress through the year as we monitor the IURC's decision on the special contract filing.

The year also extended outperformance as shown on Slide 17. By consistently following our business plan and rigorous capital allocation principles, we have shown ongoing growth and solid financial outcomes, which compound over time. NiSource has met or exceeded the upper end of its guidance range each of the last 5 years. Each time this target is achieved, we adjust our future adjusted EPS guidance upwards to reflect these accomplishments. This approach has set us apart by creating real value for our shareholders.

The effect of our outperformance in annual rebasing compounds, amplifying our achievements and sets the stage for even greater financial momentum in the years ahead. For example, 2026's implied midpoint is now 8.8% higher than originally forecasted in 2022. That exceeds the upper range of 1 full fiscal year of earnings power since our strategic business review in 2022.

Our track record of exceeding expectations has set a new benchmark for NiSource's performance, delivering 8.5% adjusted EPS since 2021 compared to the industry median growth of 6.4%. This growth in earnings power for NiSource, coupled with a greater than 7% increase in dividend to our shareholders for 2026 will enable us to achieve double-digit annual total shareholder return, which endures and grows over the business plan horizon. 2025's 9% year-over-year adjusted EPS growth rate continues a trend of over 8% growth already achieved annually in our business since 2022. And we expect this to continue as we look further out to our long-term guidance range. We continue to forecast a consolidated guidance of 8% to 9% compounded annual adjusted EPS growth through 2033.

This consistent demonstration of strong execution and growth is further reflected on Slide 18. We strengthened our long-term financial profile, delivered disciplined cost management and advanced a major new contracted growth opportunity through the Amazon agreement. Our team is executing with discipline, and we enter 2026 with confidence in our strategy, our financial commitments and our ability to deliver sustainable value for customers and shareholders.

The value proposition NiSource continues to offer investors is diversified and regulated utility assets with the opportunity to invest in both programmatic gas infrastructure and the long-term energy transition story of a fully integrated electric business. These elements have been core to our story and the emerging opportunity to support economic development, onshoring and data center development truly differentiate our value proposition relative to many alternatives in the market today.

And with that, operator, please open the line for questions.

[Operator Instructions] Your first question comes from the line of Nicholas Campanella with Barclays.

I just wanted to probe a little. I know you talked about reaffirming the 3 gigawatts of strategic negotiations for GenCo in slides today. And maybe you can kind of talk about what investors should be looking for to know you're making kind of further progress as it relates to that figure? And maybe just kind of confirm where you stand in the supply chain, if you do think you can kind of deliver another gas solution this year or if it would be more renewable and batteries. Just any forward-looking thoughts there.

So I'll start, and I'll ask Michael Luhrs to weigh in here. If you think about the GenCo order that we received last September, NiSource is in a position to offer what we said is a unique solution to potential large load customers. When you combine the order with our excess transmission capacity, and our supportive policy in Indiana, we feel like we're in a really strong position to grow our data center load business. We've also created what I'll say -- we created an organization under Michael Luhrs, led by Dan Douglas, who you probably don't know, but the sole purpose of the organization now is to execute on this opportunity.

So with that being said, I mean, those guys wake up every day to execute on the data center opportunity. So I don't think future transactions will take as long as Amazon. When we did the Amazon deal, we had a bunch of people working part time to accomplish that. But I think what we have now is better focus and better processes, which should lead to faster execution.

Now I'll turn it over to Michael to talk about the discussions with the counterparties and then the queue and backlog.

Sure. Thank you, Lloyd. The discussions with the counterparties are progressing well. We have multiple counterparties that are in that pipeline that we continue to develop. We feel very positive relative to those negotiations. And I do believe that the GenCo solution that we've designed and put forward has been advantageous to those discussions. Relative to the supply chain and the pipeline, as we've discussed before and as we continue to do, we are facilitating that pipeline through investment in long lead time equipment, turbine reservations, breakers, transformers, et cetera, to help make sure that we can meet counterparty demand in a very timely way. Speed to market is one of our core tenets, and we're investing in that speed to market.

Okay. And I appreciate that. Maybe just the commentary in the prepared around no pending rate cases outstanding. Can you just give us an idea of how you're thinking through your Pennsylvania strategy and what the considerations there are?

So right now, we're not planning a rate case in Pennsylvania. I know there's been a lot of commentary about Pennsylvania. We just had a rate case. We finished a rate case last December. In that rate case, we increased revenue $55 million at a 10% ROE. We had great conversations with the commissioners. One was to continue to invest and replace plastic pipe, first generation plastic pipe in Pennsylvania and continue along with that investment. At the same time, they don't come in for rate cases so frequently. So we're in the midst of trying to solve that conundrum with some kind of regulatory solution that we're working through right now, but we don't have anything new to tell you about that.

Your next question comes from the line of Julien Dumoulin-Smith with Jefferies.

This is Spark on for Julien. I appreciate the color on the supply chain. And maybe just a quick follow-up on timing. Should we think about announcement of the next GenCo deal as contingent on receiving the first IURC approval for the special contract filing? Or could the second project be announced ahead of that milestone?

So as we mentioned earlier, let me say we're executing on our strategy. We have a specific team working on that strategy. We have more focus and better processes, but we don't have a date. I think that we're dealing with -- I know that we're dealing with a portfolio of customers. These are complicated transactions. They take a lot of time. And with that portfolio of customers, we don't have specific time to lay out to you right now. When we know something, we'll communicate it appropriately.

Michael, do you want to add anything to that?

The only thing I would add to that is the -- another opportunity is not dependent upon the IURC approval of the first opportunity with Amazon. That is not a condition precedent in what we're doing with additional development of the pipeline.

Okay. Appreciate the color. And maybe if I can quickly pivot to regulatory front, and I appreciate the color on Pennsylvania rate case filing. Maybe just how should we think about the timing for the NIPSCO gas rate case filing this year? Are you on track? Or do you plan to file for that rate case this year just based on historical cadence?

Melody, why don't you handle that?

Yes. At this time, we have not made the determination to file for a rate case. We're taking everything into consideration. But at this time, no.

Your next question comes from the line of Bill Appicelli with UBS Securities.

Just following up on the same theme here. As far as those conversations are going, can you speak to maybe the scale of the opportunities? I mean, obviously, the initial announcement was quite large. I mean, should the expectation be smaller contract sizes moving forward? Or any thoughts there about how you guys are framing out the size and scale of the incremental opportunity?

So we haven't disclosed the size and scale. What we've said is we are in strategic negotiations with 1 to 3 gigawatts and that entails a portfolio of customers and could be multiple sizes and shapes. Michael, anything to add to that?

The only thing I would add to it is if you remember our criteria around making sure for stakeholders that we're maintaining the balance sheet, the speed to market, providing a benefit to customers, we really look at those criteria for the determination of what deals we pull through. If customers meet those opportunities, those deals and we can effectively serve them and execute on those, then we will continue to do that. So it's more about the capabilities and the contractual agreements than it is about the specific size of the counterparties.

Okay. And has the pace of those conversations picked up at all just in the last few months as we've seen some slowdowns in other regions? I'm just curious on that front.

I'd say the pace of the conversation and discussions have picked up. Our organization speed has picked up. We have a lot of confidence in our ability to execute on the strategy.

Okay. Great. And then just one other topic here. Can you maybe explain a little bit around the significance of Senate Bill 103 and what that could mean for large load customer opportunities in Ohio? And I guess, are any of those contemplated within the base capital or the $2 billion of upside base CapEx?

Shawn?

Yes. Thanks, Bill. Appreciate the question. We've not incorporated any upside from economic development or the procurement of large load customers into the Columbia Gas of Ohio forecast yet. We're currently working on optimization based on the outcome that we received in December and the new law signed to help us optimize both the regulatory strategy as well as minimizing the regulatory lag potential, get tighter and more certain capital recovery time lines and then certainly how we can action alongside Michael's team, the upside that could come from economic development and data center opportunities in Ohio. But none of that's reflected in the COH plan at this point.

Okay. Is that something you could fold in later this year?

Yes, absolutely. Throughout the year, even at that point, we wouldn't need to wait until a typical full plan refresh for us to provide guidance, whether it's on individual projects or the upside CapEx, as we've shown in the past, we'll flow those potential upsides into our plan all along the way.

Your next question comes from the line of Eli Jossen with JPMorgan.

Just wanted to start on some of the recent developments across Indiana as it pertains to the base business. Can you remind us where we are on House Bill 1002 and frame potential impact of that legislation? And maybe just speak more broadly to some of the IURC appointment changes and their overall view of your business and the affordability backdrop.

So let me start with -- we're supportive of House Bill 1002. Today, it's in, I think, Senate Appropriations in the state of Indiana. The session ends March 15. So I'm not sure whether it will get out of appropriations in time for the approval process. But overall, I think it will be good for us. I mean the bill has 4 big components, multiyear rate plans, some performance-based components. It has a mandatory budget billing with an opt-out. -- then it has a low income plan, funding for a low income plan, which we already have in the state of Indiana.

So we think the bill is ultimately good. We support the bill. I think we've had good input into the bill, and we like where it is. I think with respect to the commissioners, the 3 new IURC appointments. I think they'll be balanced. We're very familiar with all 3 of the new commissioners. And again, I think Indiana will continue to be a very constructive regulatory jurisdiction.

Awesome. And then can you explain -- but can you remind us if the high end of the GenCo range reflects the full upper bound of Amazon's ramp? Or is that a more conservative scenario? Just trying to understand sort of the total possibility there on the GenCo contributions.

Yes. So this is Shawn. There's a range of scenarios which have the potential to impact the positioning of where we're at within the range. The most notable are related to financing costs and construction time lines. Faster-than-anticipated construction leads to lower financing costs, thus positioning us likely higher in the range. Slower construction time lines could lead to more financing costs and thus a lower position within the guided range. In addition, we've got some opportunity to optimize that financing cost overall. We're evaluating those scenarios, and we could see some outperformance of where we are within our point estimate, which would ultimately strengthen the earnings contribution to NiSource.

So we have a range of scenarios reflected in the guidance that we provided for all years. Certainly, incremental customers or changes to the current time lines could represent upsides and strengthen where we're at, but those are further out as we look at the 2033 guidance range.

Your next question comes from the line of Travis Miller with Morningstar.

Quick one on Schahfer. I'll save you from all the data center questions here. So 2 unrelated ones. Schahfer, economics, run time, plans to retire, -- what's besides what you said in the opening comments, what's a more detailed plan for Schahfer, do you think right now?

So as you know, we received a 202 order on Schahfer. I think it was December 23. We were going to retire that plant December 31. We filed with FERC and going down the path for cost recovery. Right now, in terms of our capital plan, we have enough flexibility in our capital plan where running Schahfer as an alternative is not going to have a big impact on our capital plan. I think run time will be determined by MISO in terms of demand and availability. But we are putting ourselves in a position to be able to operate Schahfer, operate it reliably and effectively.

I think longer term, there are some environmental constraints that will prevent it from operating at really long term, but those are subject to change with some of the EPA regulations that are being changed right now. So we expect to receive maybe another order every 90 days until the federal government changes the way that process works, we're going to operate Schahfer and comply with all the orders that we receive.

Okay. Makes sense. And then a higher-level question. What are you seeing across your jurisdictions in terms of electric and gas coordination, so either timing or supply coordination that's an issue that's been coming up here recently. What's the status, do you think in your jurisdiction as you obviously add more gas generation and have that gas supply side?

I'll talk about this not as my source, but as the former Chair of the AGA. We've been intimately involved Will Mojica, who's our Senior Vice President of Operations, has led the GEAR task force, which is really the point on the spear from the AGA perspective and with -- on the electric side of the business of figuring out how to more effectively coordinate gas and electric across the entire United States. So I'd say this is a U.S. thing -- this is the United States thing, not just our region issue is an important issue. I think it's getting better. I think the processes are being developed to be much more effective and have much tighter coordination than we have in the past, which I think will really be important for reliability and resilience.

Your next question comes from the line of Paul Fremont with Ladenburg.

Congratulations on a great year. I guess my question has to do with what should we expect with respect to reporting for the GenCo. Right now, you've got Columbia operations, NIPSCO, Corporate and other, should we be looking for a fourth segment for the GenCo or how do you plan on showing that in terms of the financials?

Shawn?

Paul, we do anticipate as GenCo becomes more material to NiSource's operations to break out as its own segment. Obviously, we haven't done that yet for 2025 reporting. But as we step into 2026's results, we would anticipate growing to provide incremental disclosure around that.

So I mean, should we begin to see something like in the first quarter? It will be -- will it be more towards the end of the year or several years out when the EPS contribution goes higher?

I'd expect it in 2026 fiscal results. So I would start to build that out in your models. We haven't disclosed the exact timing of when we'll do that. We're underway to make sure we can get that disclosure out there.

Okay. And then last sort of question, will it be -- when you do break it out, will it be a full income statement or just partial?

We'll be sure to get that information out to you, Paul. We haven't exactly disclosed those plans yet, but we'll get that updated for you and help you if you need any side conversations on what to start to build out.

That concludes our question-and-answer session. I will now turn the call back over to Chief Executive Officer, Lloyd Yates, for closing remarks.

First of all, thank you for your questions and your interest in NiSource. I do want to take this opportunity because I know they're listening to thank all of the NiSource employees and contractors for Winter Storm Fern. Our performance was exceptional. We had very few customers interrupted. Our customers stayed safe and warm, and we recognize the hard work that went into that.

So thank you to the team. Have a great day.

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.

Ladies and gentlemen, thank you for standing by. Hello. My name is Dustin, and I will be your conference operator today. At this time, I would like to welcome you to the third quarter of NiSource Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Durgesh Chopra, Vice President of Investor Relations. Please go ahead, sir.

All right. Thanks, Dustin. Good morning, and welcome to NiSource's Third 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, Customer 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 third 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 the 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.

Thank you, Durgesh, And 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. The NiSource team has been focused on executing our premier business plan. We have advanced the work to develop data centers in Indiana, and we refresh the long-term outlook for our business. As a result of this, we've strengthened our financial commitments, demonstrated a disciplined and well-defined base business plan and have capitalized on emerging data center opportunities. through approximately $7 billion of Genco investments, generating approximately $1 billion in savings to be flowed back to our existing customers. This business model serves as a scalable platform for growth. .

These commitments are backed by our efficient capital deployment and safe and reliable operations within our robust regulatory framework. The refresh of our strategic plan outlook enables updated financial guidance while reaffirming our confidence in delivering sustainable value and extends the company's growth targets. This supports a 6% to 8% annual adjusted EPS growth rate in the base business through 2030 and we are now introducing an 8% to 9% adjusted EPS compound annual growth rate for the consolidated business through 2033. This transparent approach drives predictability and aligns our financial plan with long-term stakeholder value. Turning to our key priorities on Slide 4. This quarter, we secured approval of the Genco model in Indiana and full ownership of the Templeton Wind asset, reinforcing the strength of our constructive regulatory foundation. Our ongoing focus to refine our operations through AI efficiency and continuous improvement initiatives supports our steadfast commitment to customer affordability, ensuring that our investments and operational decisions are made to support our goal of keeping energy costs reasonable and predictable for the communities we serve.

Today, we reported third quarter adjusted EPS of $0.19, bringing our year-to-date total to $1.38. We are reaffirming the upper half of our 2025 adjusted EPS guidance of $1.85 to $1.89. We're also announcing 2026 consolidated EPS guidance of $2.02 to $2.07. Despite these strong financial commitments, significant upside remains as we continue to invest in regulated infrastructure to better serve our communities, developing projects supporting data center growth, or insuring of manufacturing and economic development across our territories remains robust across the outlook of our plan. Some of that robust pipeline has been realized through the recently executed contract with a large investment-grade data center customer. Let's move to Slide 5. Our AI and digital strategy is measurably driving efficiency scalability and better experiences for employees and customers. Our AI work management intelligence continues to deliver sustained fuel productivity uplifts of over 20%. And as measured through work hours achieved, less idle time and less rework.

Building on this success, we are expanding AI into additional high-value areas, including a new supply chain program to reinforce our focus on customer affordability. We are also piloting AI for system reliability and faster storm response, including average prediction and resource staging. Across the enterprise, we're employing AI through secure, role-based tools and strong governance. These initiatives are outcome-driven, along with our regulatory commitments and designed to capture sustainable O&M efficiencies while improving service quality. We're making deliberate investments in the people and capabilities required to meet the growing needs of our data center customers. Our ability to execute large-scale construction projects stems from a proven track record of project management, deep technical experience and a culture of accountability. These efforts align directly with our commitment to operational excellence, ensuring we're not only prepared to deliver the position to lead this next phase of growth.

On Slide 6, we continue to make strong progress on our regulatory agenda. We're advancing our tracker programs in Ohio and Indiana and our Pennsylvania rate case remains on track with a final order expected by year-end. We're also advancing initiatives that promote economic development. These efforts expand the customer base, which leads to more efficient distribution of fixed calls. Columbia Gas Virginia's partnership in delivering natural gas to Eli Lilly's company's newly announced $5 billion manufacturing facility near Richmond, exemplifies a proactive approach to economic transition and infrastructure development. The state-of-the-art facility is projected to create 650 permanent jobs and 1,800 construction jobs, showcasing how strategic investments can drive both immediate and long-term economic benefits for local communities. Columbia Gas and Virginia's collaboration with state and local agencies on the core commitment to attracting high-impact investments and building foundational energy infrastructure that supports ongoing economic growth.

In parallel with these economic initiatives, NiSource remains focused on its energy transition strategy by advancing coal plant retirement, including Schafer at the end of 2025 and Michigan City in 2028. The company continues to closely monitor executive orders and regulatory developments and is working with federal and state officials and MISO to ensure these transitions are managed responsibly. The goal is to provide the best outcomes for customers and communities, ensuring reliability and affordability. These efforts, together with investments in new facilities and infrastructure reinforces NiSource's commitment to supporting both community prosperity and a sustainable energy future. The IURC's approval of Genco unlocks a unique business model designed to protect existing customers, serve new customers with speed and flexibility and maintain the financial integrity of NIPSCO. The Genco strategy goes beyond simply providing power. It establishes a framework that strengthens our system, supports local communities and drives long-term sustainable growth for all stakeholders.

Last month, we executed a data center contract with a large investment-grade customer to support significant gas and battery storage build out in Northern Indiana, representing approximately $6 billion to $7 billion in capital investment. This project fully aligns with our strategic priorities, enabling affordability for customers, supporting economic development in the communities we serve, enhancing shareholder value for a strengthened financial profile and prudent risk management. I want to emphasize that customer affordability remains central to our strategy. The special contract ensures that growth enhances value for our existing customers going well beyond cost neutrality. The counterparties use of the NIPSCO's infrastructure will generate significant bill savings for our retail customers. while investments in grid modernization will enhance reliability and reduce long-term operational expenses.

This project also delivers meaningful economic development benefits, including job creation, workforce development and tax revenues that support public services and infrastructure across Indiana. Lastly, this agreement enhances our existing financial commitments and will diversify and strengthen NiSource's earnings, cash flow and growth profile, as Sean will touch on later.

But first, I'll turn it over to Michael to walk us through the agreement in more detail.

Thanks, Lloyd. I'll begin on Slide 8. I'm happy to share this breakthrough infrastructure agreement driving significant energy development in Indiana. Due to confidentiality agreements and ongoing discussions with other parties, we are limited in the details we can share at this time, but we are excited to share these developments. Under this agreement, Genco will construct 2 combined cycle gas turbine power plants, each with a nominal output of 1,300 megawatts and 400 megawatts of battery storage capacity. Drawing on our expertise in the energy sector, these technology solutions were designed to ensure cost effectiveness, long-term value and meet system reliability standards. Our approach delivers benefits across the board, providing customer benefits, state-level energy planning and regulatory compliance, community economic development, shareholder benefits and aligns with MISO's capacity requirements.

This collaborative model ensures that all stakeholders, customers, the state, community, investors and MISO are positioned for success. These assets will support transmission and substation infrastructure representing a total capital investment of approximately $6 billion to $7 billion. The agreement outlines a multiphase development plan with a clear demand aligned ramp for efficient and scalable employment of resources. We plan to submit the special contract agreement to the IURC for review before year-end and expect approval in the first half of 2026. The agreement is structured with a 15-year initial term providing long-term stability. Our returns will be generated under a fixed rate contract structure with consistent capacity payments and pass-through treatment of certain costs. Termination protections also helped mitigate early exit risk and further safeguard financial integrity.

Furthermore, we have entered into an engineering, procurement and construction agreement with a joint venture between Quanta Infrastructure Solutions Group and Zachry Industrial for development of the 2G Vernova state-of-the-art CCGT stations. Additionally, we have signed a separate EPC contract with Quanta to lead the construction of our advanced battery storage facilities, reinforcing our commitment and capabilities to deliver effective, reliable and sustainable energy solutions for Indiana. We're confident in our ability to execute this project effectively safely and with minimal disruption to our existing operations. As Lloyd noted and as highlighted on Slide 9, affordability is central to our strategy. particularly in an inflationary environment where energy costs can pose significant challenges. This project has been carefully structured to uphold NiSource's commitment to customer affordability so that growth does not come at the expense of existing customers.

NiSource has a prioritized customer affordability by structuring a contract that ensures NIPSCO retail customers are not financially responsible for the infrastructure costs associated with serving this large load customer. These protections apply both during the contract term and at its conclusion. This arrangement will allow for approximately $1 billion to be passed back to our existing NIPSCO electric customers, creating bill savings over the contract life. Through the construction and development of new assets, we are building a more resilient future ready grid.

Moving to Slide 10. This project drives meaningful economic development in Indiana. creating more than 2,000 jobs, spanning a range of skill levels in industries and contributes to long-term employment opportunities. The boost to local and state tax revenues from an investment in this magnitude is tremendous. enhancing the overall value and sustainability of the community by supporting public services and infrastructure. Beyond direct financial contributions, the initiative promotes workforce development in our communities while also attracting top talent, energizing India's economic economy and positioning the region for the sustainable economic growth. We continue to see strong momentum from large load customers. Combined with the recent commission approval of the Genco structure, we are unlocking a differentiated business model, One that protects the benefits and provides benefits to existing customers while enabling us to serve new large load customers with speed and flexibility. These developments give us a high confidence in the pipeline, which Lloyd will speak to later.

I'll now turn things over to Shawn.

Thanks, Michael. Good morning, folks. I'll start on Slide 11. As Lloyd and Michael have both highlighted, the Genco investments we plan to develop will enhance the value proposition business delivers to its customers in Indiana and will enhance long-term shareholder value. This partnership represents an investment inventory of approximately $7 billion incremental to our refreshed $21 billion base plan capital expenditures forecast. Consistent with rate designs from our base business, Genco's capital investments, are designed to drive revenue and earnings growth immediately and will track the rate of deployed CapEx, which will bolster NiSource's financial profile. This partnership is projected to be accretive for MISO shareholders in 2 key areas. First, over the initial term of the contract, the returns generated are forecasted to achieve a rate of return greater than NIPSCO's regulated rate of return. Second, the project is accretive to NiSource's earnings per share forecast in all years of the plan.

Strong cash flow returns are forecasted from this project which will provide a broad range of financing solutions to achieve 2 primary goals: one, maintain our commitment to credit quality and achieve a 14% to 16% FFO to debt in all years of our plan. and two, maximize the long-term value creation to shareholders by minimizing financing costs. Genco investments are expected to strengthen NiSource's financial position by diversifying and increasing its earnings and cash flow potential while also establishing a new platform for long-term growth and development.

Turning to Slide 12. We recognize the tremendous growth potential ahead and have carefully and diligently built comprehensive risk management protections into our plans to protect the long-term stability of our enterprise operations. Importantly, the contract provides for a fixed rate structure, which mitigates exposure to dispatch, fuel and merchant power risks, providing stable, predictable earnings and enhances long-term planning confidence. To further safeguard value creation, the termination payment mechanisms will mitigate early exit risk and uphold financial integrity throughout the life of the contract. The contract includes certain cost-sharing arrangements designed to mitigate construction execution risk. The rate design is developed to allow for recovery of our currently projected construction costs over the agreements term.

We are confident that the provisions we've incorporated in this contract will enhance our financial flexibility and positions NiSource for continued success. Looking ahead on Slide 13, we have a clearly defined path towards successful execution of this initiative, supported by key milestones. As announced last month, this data center contract is a strategic step forward in our long-term vision and approval of the Genco model supports the speed to market customers need to ramp their services. The additional financial disclosures provided today extend our long-term business and financial plan and build upon a premium-based business. Our future trajectory is enhanced through this project's multiyear development cycle and achieved full growth potential by 2032.

Shifting gears, Slides 14 and 15 detail our third quarter adjusted EPS of $0.19 per share compared to $0.20 per share for the same period last year. Earnings benefited from constructive regulatory outcomes at NIPSCO Electric and Columbia operations. These gains were offset by depreciation from new assets placed in service, the impact of higher balances of long-term debt, and increased operating expenses. On Slide 16, we refreshed our 5-year capital expenditure plan outlook, starting with a base capital plan of $21 billion which supports our 6-state traditional utility footprint. The refresh in our base capital plan is $1.6 billion larger than our prior base plan. CapEx increases are driven by several projects, moving from our upside plan, including MISO long-range transmission Tranche 1, PHMSA compliance in Ohio and customer transformation initiatives supporting the enterprise.

In addition to the base plan investment, we are now introducing approximately $7 billion of data center investment at Genco for a consolidated total of $28 billion of capital expenditures over the next 5 years. The magnitude of this new capital plan is substantial, signaling one of the largest investment cycles in NiSource's history. This significant increase, nearly 45% higher than the previous 5-year outlook demonstrates the company's proactive response to evolving market demands and invests in safe and reliable energy systems to support our communities, especially as the sector approaches a generational opportunity driven by digital transformation across industries. Beyond the refresh in the base capital plan, we have also updated the upside capital portfolio of projects supporting our traditional utility operations. These projects now estimate that $2 billion of CapEx and reflect MISO DLOL compliance projects, electric transmission investments and system modernization and enhancement.

These projects remain outside our current guidance. And once they reach our threshold to be included in our base plan, we will flow these through the full plan. As we assess market and system requirements, new long-term investments arise beyond our base and upside plans. These are highlighted on Slide 17. All of these projects require further development and we are actively pursuing their commercialization. Consistent financial execution has strengthened our balance sheet allowing NiSource to be flexible in capital allocation and be opportunistic to invest more in our system to enhance safety and reliability when necessary. Our updated long-term financial commitments are shared on Slide 18, which reflect the increased investment opportunity we are now positioned to access. There is no change to our current year projection. We are reaffirming 2025 adjusted EPS guidance of $1.85 to $1.89, expecting to achieve results in the upper half of this range.

As Lloyd highlighted earlier, we have bifurcated the cash flow returns associated with our existing utility operations and are defining those through our base plan guidance. We are introducing new disclosure for the cash flow profile of the Genco business model now that it has been approved by the IURC. This new investment thesis will combine with the base plan guidance to produce consolidated financial returns and guidance range. We expect our base plan adjusted EPS to grow annually at [indiscernible] from 2026 through 2030, incorporating the refreshed financials in our plan. This provides the foundation for our 2026 guidance range, which we are initiating. Consolidated adjusted EPS of $2.02 to $2.07 per share. Included in this range is $0.01 to $0.02 per share coming from the development of Genco-related assets. Beyond 2026, we expect our base plan to continue to grow annually at 6% to 8%, which is fueled by a continuation of the 8% to 10% rate base growth planned across the next 5 years to support safe and reliable operations across our 6-state utility portfolio.

Similar to 2026, we are now incorporating returns associated with new data center investments which now produce a forecasted consolidated rate base growth of 9% to 11% over the same 5-year horizon. The returns associated with these investments provide for a consolidated adjusted EPS CAGR of 8% to 9% through 2033. Importantly, we will continue to rebase our annual base plan adjusted EPS growth guidance off of actual results, allowing for outperformance to compound across the plan horizon. We are committed to minimizing the financial impact that our safety, reliability and compliance investments have on our customers. The Genco structure enables an increase in capital investment without those expenditures flowing to existing customers. In addition, the customer flowback mechanism from this contract refund system costs to customers while eliminating risk associated with fuel costs for large load generation assets.

And finally, operational excellence and innovation in our operations project flat O&M over the life of the plan, all of which help support annual bill increases of less than 5% across NiSource. Additionally, we remain committed to 14% to 16% total debt in all years of the plan. Slide 19 details our financing plan. Our credit metrics have continued to improve and strong operational cash flow continues to support capital investments. Long term, Genco will further strengthen our balance sheet while we maintain financing flexibility to meet our strategic goals. We're excited to expand our partnership with Blackstone Infrastructure Partners through Genco as minority interest holders Blackstone will contribute 19.9% of all investments, supporting both current initiatives and future growth opportunities.

Blackstone has committed $1.5 billion in equity which reinforces our capital structure and positions Genco for long-term success in meeting the evolving energy demands of data centers. Efficient financing plans help to avoid financing drag and minimize public equity dilution to our shareholders, thereby maximizing overall return. We continue to favor utilization of our ATM structure. As of September 30, we have settled all forward agreements under the ATM, which approximately $50 million of remaining capacity in the program. We expect to issue $300 million to $500 million of maintenance ETM equity annually across the 5-year plan to support our consolidated capital expenditures. Turning to Slide 20. The company's adjusted EPS trajectory reflects strong and consistent execution with adjusted EPS increasing from $1.37 in 2021 to a projected adjusted EPS of $1.88 this year based on our guided midpoint, representing an impressive 8.2% CAGR over the 5-year period.

This performance underscores the resilience of our base plan. which has historically outperformed expectations and is projected to sustain 6% to 8% annual adjusted EPS growth through 2030. With that in mind, I'll point out the midpoint of our 2026 consolidated adjusted EPS guidance range of $2.02 to $2.07 represents an 8.8% growth from our 2025 midpoint. Building on this proven foundation, the introduction of Genco adds a meaningful layer of growth, contributing an incremental $0.10 to $0.15 per share in 2030 and growing to $0.25 to $0.45 per share through the horizon for a consolidated adjusted EPS CAGR of 8% to 9%. The Genco EPS contribution range incorporates the recently announced data center agreement and contemplates multiple customers at the top end. Our strategic negotiation pipeline of 1 to 3 gigawatts, which Lloyd will touch on momentarily, offers us the opportunity to exceed the top end of the range.

We have consistently demonstrated strong execution and growth as reflected on Slide 21. Our dedication to customers, investors, employees and all stakeholders remains at the core of what we do. Strong execution of our base plan including operations, financing, regulatory and prudent investment strategies position us favorably as we step into 2026 and beyond. The value proposition NiSource continues to offer investors is diversified and regulated utility assets with the opportunity to invest in both programmatic gas infrastructure and the long-term energy transition story of a fully integrated electric business. These elements have been core to our story and the emerging opportunity to support economic development, onshoring and data center development, truly differentiate our value proposition relative to many alternatives in the market today.

And with that, I'll turn things back over to Lloyd.

Thank you, Shawn. We are proud [indiscernible] data center contract with a creditworthy commercial partner, positioning us to deliver on all of our key strategic objectives as outlined on Slide 22. Our teams engaged across an array of stakeholders to protect our retail customer base while expanding shareholder investment opportunities, diversify our earnings profile with stable, predictable contracted earnings and cash flow capitalize on low growth and data center opportunities, which validates our growth thesis in Northern Indiana and establish a customer-centric business model that supports our communities. This partnership strengthens our competitive position as we continue negotiations with additional prospective customers and advance our strategy to deliver long-term value to Northern Indiana and our stakeholders. .

Finally, moving to Slide 23. Our Genco strategy is underpinned by a robust and growing pipeline that positions us for long-term success in the data center market. This commercial partnership represents a proof set of the generation capacity opportunity we've highlighted for the past year. We have secured data center load that will be backed by 3 gigawatts of generation capacity with negotiations progressing on an additional 1 to 3 gigawatts of projects from new and existing customers, creating a clear path to scale. Looking ahead, developing opportunities could expand this pipeline even further by an additional 3 gigawatts, reinforcing our ability to deliver sustained growth. This opportunity showcases the strength of our team and the precision of our strategy. I'm incredibly proud of the discipline and focus that has brought us to this point. Our team's operational excellence, customer focus and accountability continues to set NiSource apart. And I'm confident it will be the driving force behind the successful execution of this initiative.

With that, we'll open up the line for questions.

[Operator Instructions] First question comes from the line of Shahriar Pourreza from Wells Fargo.

So just without going into specific names, can you just maybe speak to the quality of the customer kind of behind the agreement. So is it a true hyperscaler counterparty or a co-locator. And kind of now that you've secured this initial deal you sort of thinking about the broader pipeline as we think about that 1 to 3 gig in negotiations. So the broader counterparty quality and what it could mean to the CAGR?

So what I will say is this is a very large investment-grade data center customer that we're that will be served in front of them either via the NIPSCO transmission network. As mentioned in the -- as mentioned earlier, we're going to build 3,000 gigawatts, it will be 2.4 gigawatts of load. I think as we think about our pipeline, I think it was mentioned earlier, I think that we've unlocked is a new business model. We've got -- I think September '24, we got the Genco declination. I think you've seen through this transaction is really a blueprint of what we're going to execute on to go forward. So as we look at negotiating with subsequent counterparties -- we've shown you a blueprint of all the things that we're going to put in place before we announce this to the market. And I think the team knows that we've aligned the organization to focus on these things. And then we have a path towards execution on all of these subsequent customers and we're excited about it.

Perfect. Appreciate that. And then just maybe a quick one for Sean. I know obviously, just on credit, you talked about sort of the targets but focusing a little bit more on sort of the downgrade threshold, especially as you become more integrated. Any kind of sense on how they could think about the threshold as you become more and more integrated. I mean, it's obviously -- you guys have highlighted it's a new business model for them. Quantitatively, it seems to make a lot of sense. But just more on the qualitative aspects.

Yes, Thanks. Appreciate the question. So we've been actively engaged with our rating agencies while we've been developing this strategy. And candidly, we think that the thoughtful risk management provisions in the contract really provide for protection that's pretty similar to our existing base business. And we don't believe a change in threshold is warranted or will occur. Our current guidance is 14% to 16% in all years of our plan, and our downgrade threshold is 13%. So there's already adequate cushion baked in, and we think strengthening in the business, the cash flow profile of the business should continue that trend. .

Our next question comes from the line of Nicholas Campanella from Barclays.

Maybe you can just kind of talk a little bit about the $0.25 versus the $0.45 range and what puts you at the high end or low end of that contribution? And I just wanted to confirm that the 3 gigawatts in strategic negotiations is incremental to this figure?

Shwn, you want to take that one?

Yes, sure. So to retain our competitive advantage, we can't disclose the individual customer contributions. However, the Genco structure adds a meaningful layer of growth that we've highlighted here the [ 25 to 45 ] through 2033 contemplates multiple customers at the top end. But our full strategic negotiation pipeline 1 to 3 gigawatts would outperform the top end of that range. Now depending on customer preferences, choice and technology time line for that development to occur, customer ramp rate, it can move around a fair amount, which is why we've got a bit of a broader range but the squaring of this is [ 25 to 45 ], that range. The customer that we announced in September fits within that range. And then the top end of that range would include some portion of the advanced negotiations with the ability to outperform the range in total, if all of that were to be unlocked.

Okay. I appreciate that. I appreciate the clarification. You mentioned there's a $1.5 billion commitment, I think, to Genco from minority interest holders. Just what is the contribution then from the NiSource side from an perspective? Is it just 50% of that remaining $5 billion? How should we kind of think about that in terms of funding Genco and the capital structure?

Yes. All of the guidance -- the earnings guidance that we provided today is projected reflecting the total cost of financing, including all equity, all debt on noncontrolling interest associated with minority interest investors. So all of that's already reflected in the earnings per share contribution, the $300 million to $500 million equity is the total amount of equity in our guidance range for NiSource that supports the full $28 billion of capital expenditures that we've announced today. All of that is reflected in that range of $300 million to $500 million annually of ATM equity from NiSource.

Our next question comes from the line of Julien Dumoulin-Smith Juliano from Jefferies.

In fact, if I can push a little bit further. Look, Just with respect to the $0.25 to $0.45 here. Can you elaborate a little bit on what's reflected here? I mean, is it just the CapEx the first $7 billion here through the first 5 years, how should we think about like the totality CapEx to get you there? And then related in tandem, right, you have this 1 to 3 gigawatts of upside here. Can you talk about what's included in what that earnings profile would look like? Is it as simple as taking the $0.25 to $0.45 and, I don't know, say, doubling that for the argument's sake? How would you help frame out the sensitivity on that front, too?

Answer the same question, Shawn.

So the CapEx that we projected in our 5-year plan ranges from $6 billion to $7 billion, that supports Genco development. That includes all of the capital necessary to support the customer that we announced in September. It also reflects some capital allocation that allows us to competitively compete these large load opportunities and position us to access the strategic negotiations that Lloyd and Michael highlighted earlier. We've got no incremental disclosure in guiding within the range of $0.25 to $0.45. And that $0.25 to $0.45 of earnings power is reflective of the customer we announced in September and on the higher end, would reflect additional strategic negotiations flowing into it, but it's not required for us to reach that range.

Got it. All right. Loyd,Ican try asking again, right? Let me put this way. If you got the full amount of that 3. And again, I'd love to hear your confidence on being able to pursue this full 3 -- is that -- how would you characterize the sensitivity around that, if there's any other way to get at it. Again, I get that you don't want to be too overly specific here, but if you can a little bit in mind. And obviously, the timing on that 3.

So the part I'm going to talk to -- this is Michael. I'm going to talk to the 3 gigawatts and the opportunity in the pipeline, and then I'm going to let Shawn highlight a little bit more on how that 3 gigawatts would reflect into the earnings range on that. But let me hit a little bit of ore. I think 1 of the key points of this when you look at that 3 gigawatts and the executability of it -- the fact that we have the ability to move quickly on the regulatory model that we have the flow back to customers that we have the engineering procurement and construction partnership lined up that we have long lead time equipment secured and that we have the ability to be able to execute that and pull that through from a construction environment. that gives us a speed to market and execution that gives us high confidence in the ability to execute on other opportunities as we move those forward and we move those into commitment. So we feel very good about that 3 gigawatts from the aspect of that we can execute it. We can pursue it. But we will do that as we have here in a disciplined, methodical manner that supports our balance sheet supports our customers and lends to the overall accretion. Shawn?

Yes, then maybe 2 other points. As we think about other future customers, the choice of technology, the construction time line will matter and how it squares within the range. Some assets are more quick to construct such as battery that could accelerate itself into the construction time line versus something that might take multiple years such as some gas technologies. So that would be important to be able to answer your question, Julie -- Julien, so that customer preference does matter into how it would flow into the guidance range. That said, we do see an opportunity to accelerate customer demand ahead of even 2033. And so as we think about that CAGR, that $0.25 to $0.45 CAGR, we do see potential upside in our current forecast even with the existing customer we announced in September should we have the ability to accelerate customer demand and/or construction time lines, we could see that pull closer in our forecast.

Yes. Understood. Okay. Fair enough. Lloyd, quick squeezing this in thoughts on the state of Indiana your relationship. I'm sure you've talked with the governor's office, et cetera. Any 2 cents you'd offer here quickly. I'd love to get your candid assessment here.

Yes. I think that Indiana is open for business. I think that if you talk to the governor's office and when we have conversations with the government in his office, they like these economic development opportunities. they continue to be focused on affordability. So the idea that this transaction flows back over $1 billion of customers over the contract period. I think that the relationship is positive. I think that more, I think that they're interested in more of these opportunities, but I think affordability is going to be on the forefront, and we're very focused on that. And developing this Genco model helps with that in a great way.

Our next question comes from the line of Eli Jossen from JPMorgan.

Just wanted to start on kind of the learnings and business expertise gained in the first data center contracting announcement. I know that Genco probably plays a big role here, but just thinking about the keys to getting this project done and then how you guys can build on that and go ahead and execute additional contracting announcements going forward?

Michael, why don't you handle this one? .

So what I would say is that we feel like this really creates a strategic platform for growth for us. If you reflect on the comments that Lloyd mentioned earlier, we have a 2,400-megawatt system now. This will double that system and load. We're building 3,000 megawatts of generation to support this. So when you think about the business earnings, we have created a foundation and a platform. And as was mentioned earlier, through that regulatory, through the EPC, through the long lead time equipment, through the ability of execution, it only heightens our ability to be able to execute on future opportunities. So overall, we feel like there's plenty of learnings and we will continue to evolve. It really helps set us up in a strategic way to be able to develop the rest of that pipeline.

Awesome. And maybe just to expand on that a little bit. I think you talked a bit about kind of some of the downside and risk protections you have in the initial contracting -- and I recognize you just touched on that a bit. But just can you expand a little bit about that? Just what types of protections are in these contracts and how you can kind of -- and what those do for overall execution on these projects?

Yes. So 1 of the things I'll say to that is we started out with the fundamental pillar of that. In this Genco structure, we want to maintain NIPSCO's financial integrity, and we've given very thoughtful consideration to the risk profile of new investments. We have built protections into the various contracts to address these risks associated with either -- with multiple factors, and we've included features such as cost sharing provisions as well.

Our next question comes from the line of Bill Appicelli from UBS.

Just a question on -- if you could speak a little bit to maybe what the return profile or capital structure assumptions are within the Genco?

Shawn?

Yes. Thanks, Bill. Appreciate the question there. So we can't disclose the exact ROE as it's confidential with the customer. And we've not disclosed the targeted return for Genco, only that we expected to achieve an overall return realized greater than NIPSCO's regulated rate of return. That helps us support the development, construction and the ownership over the life of the investments. And then in terms of the cash structure itself, we saw for and were approved by the IURC some level of flexibility in the capital structure for Genco given the construction development cycles to support the speed to market for new customers, we'll strive to capitalize Genco in a manner to do 3 things. number one, support our existing financial commitments, including the 14% to 16% FFO to debt that we expect in all years of our plan. two, obviously, safely and reliably support the cash flows for construction and the development of these assets for our customers -- and then finally, maximize the long-term value to our shareholders, minimizing dilution and financing friction is the key. That helps us realize the greatest return possible over the life of the assets.

Okay. And then just a question around the timing. You talked about some opportunities for upside here and pulling forward or accelerating maybe the ramp. So I mean it looks like most of the capital based on the CapEx slide you have, I think, about $6.4 million of the gross CapEx for Genco is spent through by the end of but we're talking about sort of full ramp on 2033. So maybe you can speak to that sort of timing differential when most of the capital appears to have been invested versus the realization of the earnings?

Yes, Bill, the majority of -- sorry, Majority of the CapEx spend, Bill, occurs between 2025 and 2030. So additional work to complete the project that occurs outside of our 5-year plan horizon that we've guided to today. That's critical because that helps us get to the final energization steps necessary for the customer to conclude their ramp, which as we stated previously, finalizes in 2032. So it's slightly outside our planned horizon from a capital expenditure standpoint. When we think about the contract, it provides for a fixed rate structure, it functions like a straight fixed variable rate design. So as additional capital expenditures are developed, the recovery follows those investments Thus, you need to step through the completion of the construction cycle before you see the fixed rate contracts step up to a full rate and full return. So the structure provides for stable, predictable earnings. It enhances our long-term planning confidence but it's key to link both the conclusion of the construction time line to energize our customers at the highest possible ramp that they can then utilize if that all can accelerate, that's the pull forward that you could see and could frame as greater upside, both to the 2033 guidance range, the CAGR as well as the intermediate periods that we guided to ahead of that.

Okay. And then just to clarify, I mean, as far as the upside from the negotiations ongoing, I mean that can be realized within the same time period. I mean, obviously, I know it depends on how it plays out, but I mean is it practical from a just a planning perspective to assume that some of this could be stood up within this window through '33 in terms of the additional...

Yes. It is very practical.

Okay. And that could drive higher EPS upside?

That's correct.

Our next question comes from the line of Steve Fleishman from Wolfe Research.

Congrats. So just maybe this is a question kind of more on both the kind of earnings and cash flow profile of Genco. So if I take the incremental investment net to NiSource and just in a normal equity and return and such it would be, I think, maybe more than $0.10 to $0.15 at 2030, but you're also issuing like a lot less equity and than normal and such, and then you've got this ramp up in later years. So can you just give kind of -- feel like the contract has been structured in a way that kind of balances those 2 in some way? Could you just talk to that? And help us better understand how much more than is needed to get to this 2033 in terms of capital investment, if anything?

Shawn?

Yes, sure. So Steve, the $7 billion guided CapEx total to support Genco is the total amount of capital necessary for us to develop through 2032 and and would be enough capital for us to afford that full range of $0.25 to $0.45 through that horizon through 2033. To the extent that can accelerate meaning the capital could be consumed and the construction could occur faster. That could create upside for us as well as the customer as the customer then would be able to ramp faster than what the original time line for the construction was contemplated to be. Incremental to that would be the upside portfolio that Lloyd just answered the question to that Bill asked the question about, none of that CapEx is necessarily in the 5-year capital guidance, all that CapEx then would be incremental CapEx and thus potentially incremental financing, which would be necessary for us to realize greater returns over the 5-year horizon or as we look through 2033, greater returns outside the range of $0.25 to $0.45 per share.

Okay. So just to the $0.25 to $0.45 because that includes both the current deal plus the strategic negotiations, you don't need more capital to get to that range beyond what you said?

Just to clarify, Steve, the current customer and the current guidance range, the $0.25 to $0.45 is inclusive of just the customer that we've announced in September. There is the potential that additional customers could push us to the higher end of that range, and that would require incremental capital.

Okay. And then the developing opportunity is a whole other bucket?

You got it. That's exactly right.

Okay. And then the -- but in terms of the core customer, we're capturing most, if not all, the capital in the -- in the $7 billion.

In the $7 billion, yes. Inside the 5-year horizon, just due to the time line of the construction, you just don't see the 2031 and 2032 capital being allocated on the annual slide, but it's reflected in the in dollar bucket that we guided to.

And then the cash flow portion of this, relative to $7 billion when you look at the incremental equity for your plan, it's relatively modest. So assume there's stuff structured here to help has been able to help minimize equity needs?

Yes. It strengthens as we go. So you do see the increased cash flow profile start to strengthen once the customer begins ramping in 2027 and then grow more significantly around 2030. And the plan horizon itself doesn't give you annual guidance beyond 2030, but you'll see strengthening cash flows coming in that time period as the customer begins to ramp.

Our next question comes from the line of Nick Amicucci from Evercore.

Great. Yes. Sorry, Shwan. I'm going to pile on here, if I can. So just to think of it a little bit more simplistically. If we were to look at kind of the gigawatt addition and then kind of the EPS accretion is, I guess, roughly $0.08 per gigawatt, a good rule of thumb as we think about this? I know it's probably overly simplistic, but just for our sake.

We have no incremental guidance on earnings per share per gig because the customer technology choice, the construction time lines will all have an implication there, Nick. .

Fair. Shooters got to shoot. So -- and then as we think about kind of the procurement and the EPC contract associated with it, -- when we're thinking of the Quanta contract, is that strictly for the first 3 gig? Or is that -- does that kind of -- do you have the ability to kind of upsize that given the opportunity you have Yes. We've set up the structure and the partnership so that we intend to be able to upsize as we grow. We want to be able to have a very deployable and scalable platform, which is what we have. but the initial agreements cover the 2 CCGTs and the 400 megawatts of batteries and associated infrastructure.

I think let me add a little bit to that, Michael, and that we set this partnership of Quanta so that we can execute subsequent projects a lot faster as opposed to going out RFPs and other things that take a long period of time. I think that the collective idea here is to be able to execute on what the customers need in a way is agile and flexible. And I think this partnership allows us to do that. .

Perfect. And then if I could just squeeze 1 more in, just really quickly, too. When we think of the affordability theme, -- as we kind of size it up, should we expect -- is it kind of -- is the pitch, I guess, to the government's mentioned, incremental savings that as you kind of -- as you grow this, you could provide incremental savings to consumers?

That's our objective. As we add new customers and they utilize the transmission grid, because they're using the grid that was really paid for by our current retail base, we should flow back -- continue to flow back savings to our retail customers.

Our next question comes from the line of Travis Miller, Morningstar.

I'm going to go back to the cash flow profile 1 more time here. In the contract, is there any cash inflow from the customer before they start ramping. And then related to that, could the financing be more short term in nature to get you those kind of 3 to 4 years of cash outflow for the CapEx and then ultimately get paid back once the customer started paying. What do you think about cash flow profile?

Do you want to take that, Shawn?

Yes, sure. The contract has been structured to prioritize cash flow to aid in the construction time lines. And the total financing, net of all of that, the contract design as well as the debt equity and minority interest forecast that we've projected today is reflective in the $300 million to $500 million range of equity -- in terms of where we place debt or how much debt and when that flows, we'll continue to evaluate those options. We've got a range of different opportunities on how we could do that. And we'll strive for, obviously, the lowest cost that we can on a long-term basis.

Okay. So there would be some cash flow coming in before the customer ramps. Is that the way to interpret it?

Yes, before the customer fully ramps

Okay. Okay. And then 1 higher level question. Why battery? Why would you add a battery on to this?

When we look at the system reliability, there's multiple facets to it, batteries provide the capability for capacity and quick response. which when we look at the overall system, it requires a diversity of assets, everything from renewables to batteries to gas assets and more. And so we will continue to develop our system in a way to highlight that reliability and grid strength. And so when we put these solution sets, that was part of the answer.

Our next question comes from the line of [ Paul Fremont from Ladenberg ].

It sounds like part of the $7 billion is either transmission or distribution. Is that all going to be spent at the Genco -- or is some of that going to be spent at NIPSCO?

Yes. For guidance purposes, we're going to segment things into the Genco segment. Paul.

Right. But technically, -- in other words, is -- I get the guidance, but is the actual spending by taking place some of that at the utility and some of that at the Genco. That's really my question.

Yes. That is correct, Paul. And then can you give us a sense of how much of the $7 billion then would be pure generation spend? Is it I assume it's the majority, but it is the majority, but we're not in a position to guide within that range, Paul. .

Okay. And you can't -- can you give us a sense of like the cost per KW of the CCGTs or of the battery? .

You're asking competitive information also.

Great. And then just to clarify the 8% to 9%, is that essentially inclusive then of of the $7 billion and the lower 6% to 8% is excluding that $7 billion. Is that essentially the way to look at that?

Yes. Our base plan guidance reflects the 6% to 8% annual adjusted earnings per share growth rate that our base plan or traditional utility plant has achieved in the past and which is expected to grow annually off of actual results through the planned horizon of 2030. For the consolidated CAGR that reflects the $7 billion of CapEx that you highlighted as well as the returns associated with this customer, and that's what provides the range of $0.25 to $0.45 inside that 8% to 9% CAGR.

Great. So -- and then the last question that I have -- can you provide sort of the load that goes with each of the EPS data points that you're identifying for the Genco. So I guess it would be [ 26, 30 and 32 ] for this new customer .

Unfortunately, we are -- we cannot provide that information. .

Okay. And then maybe last question. In the Genco proceeding, some of the intervenors were looking to share returns above sort of NIPSCO's allowed return on equity. Is there a similar sharing mechanism that was ultimately contemplated as part of the Genco approval? Or is that yet to be determined as you go through the individual contracts?

So we'll submit the contract for this customer by the end of the year. And in that contract, -- there's a full back mechanism, as I've mentioned, over determined a contract to a little over $1 billion going back to our retail customers. There's no sharing of returns.

Next question comes from the line of Christopher Jeffrey from Mizuho.

Just regarding the decision to keep on Blackstone as a 20% stakeholder in Genco. Just kind of curious how much of a consideration there was to retaining 100% of the business and those earnings against insulating some of that financing risk.

Chris. Appreciate it. Well, we believe Blackstone is really the strongest long-term partner for Genco. It's a large-scale strategic investor, provides a robust platform for future investment. They've got familiarity and support for the state of Indiana -- they've been unwavering on how they support the growth and expansion in our communities -- they've been a great partner to date. The transaction itself helped reduces our overall financing needs. It reinforces our strong balance sheet. It lowers our cost of capital. It provides diversification from traditional capital markets the commitment of not only the $1.5 billion of equity, but really to grow these projects beyond is equal to 19.9% of the ultimate Genco pipeline. So it gives us a long surety and visibility to pricing certainty to grow -- to fund a growing business, all while construction is ongoing as well. So it gives us an immense amount of flexibility that we think drives greater value for our shareholders.

Great. And then maybe to ask 1 on Genco. Just as far as the base capital plan update, I just kind of noticed that it seems to be -- there seems to be a lot in 2029. And I was just wondering if that's any like specific bespoke projects or just kind of more clarity into that year?

Yes. Across the plan horizon, about 50% of the CapEx portfolio is natural gas investment 25%-ish is related to NIPSCO, traditional electric operations and about 25% ends up being Genco support on the generation build-out predominantly. So that's kind of the overarching profile of it. 2029 is where we start to approach DLOL compliance requirements that are necessary for us to invest in generation. We see some larger investments in 2029 associated with that. We also start to see PHMSA compliance requirements at Columbia Gas IO in 207 and '28. MISO long-range transmission also starts to pick up really actually in '29. So it's in that same year as well.

There are no further questions. I will now turn the call back over to NiSource team for closing remarks.

Thank you for your interest in NiSource. We're excited about this period of time of growth in our company and appreciate your questions and investments. Thank you.

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