NiSource(NI) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the full year 2021, the company reported non-GAAP diluted net operating earnings per share (NOEPS) of $1.37, an increase from$1.32 in 2020, reflecting strong financial performance [15][36] - The company reaffirmed its 2022 guidance for NOEPS in the range of $1.42 to$1.48, with a long-term growth forecast of 7% to 9% compound annual growth rate (CAGR) from 2021 through 2024 [15][36] Business Line Data and Key Metrics Changes - Gas Distribution operating earnings for 2021 were approximately $674 million, a slight increase of about$6 million compared to the previous year, despite lower operating revenues due to the sale of Columbia Gas of Massachusetts [37] - Electric segment non-GAAP operating earnings for 2021 were about $387 million, an increase of approximately$25 million from 2020, driven by infrastructure investment programs and increased customer demand [38] Market Data and Key Metrics Changes - The company received final orders in gas rate cases across Pennsylvania, Kentucky, and Maryland, resulting in revenue increases of approximately $58.5 million,$18 million, and $2.4 million respectively [21][22] - NIPSCO's electric TDSIC plan received final approval for a$1.6 billion investment program aimed at enhancing service and reliability for customers [23] Company Strategy and Development Direction - The company is focused on investment-driven, long-term sustainable growth, with plans to invest $2.4 billion to$2.7 billion in capital expenditures in 2022 [16][42] - The strategic initiatives include transitioning to renewable energy sources and reducing Scope 1 greenhouse gas emissions by 90% by 2030 compared to 2005 levels [13][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current growth plan, emphasizing a strategic review to extend growth beyond 2024 and evaluate the performance of the existing portfolio [46][47] - The CEO highlighted the importance of operational excellence and cost management as key priorities in the first 100 days of leadership [85][88] Other Important Information - The company plans to issue its first annual sales report alongside its annual report, showcasing progress in various initiatives [19] - The company is actively engaging with producers and developers focused on renewable natural gas, hydrogen, and emerging storage technologies to support decarbonization efforts [32] Q&A Session Summary Question: Can you provide insights on the strategy update? - The CEO indicated confidence in the current growth plan and mentioned a comprehensive review of the portfolio to maximize shareholder value [46][47] Question: What are the criteria for potential asset sales or acquisitions? - The CEO stated that criteria are still being developed, emphasizing the need for a thorough evaluation of the portfolio [49] Question: Are the renewable projects on schedule? - Management confirmed that all renewable projects are currently scheduled to be operational by the end of 2023, with active monitoring in place [104] Question: What are the priorities in the first 100 days as CEO? - The CEO outlined key focus areas including NiSource Next, the retirement of coal plants, and evaluating the gas distribution system for decarbonization opportunities [85][87] Question: How will the strategic review impact capital allocation? - The CEO mentioned that any asset sales could eliminate the need for future equity, while also considering attractive investments for shareholder value [73][112]