NISOURCE INC.

Financial and operational data for the NIPSCO Operations segment, which services both gas and electric customers, for the three and nine months ended September 30, 2026 and 2025 are presented below.

Comparability of operation and maintenance expenses and depreciation and amortization may be impacted by regulatory and depreciation trackers that allow for the recovery in rates of certain costs.

The underlying reasons for changes in our operating revenues for the three and nine months ended September 30, 2026 compared to the same period in 2025 are presented below.

Weather

The results of operations for the NIPSCO Operations segment include income from both electric and gas services. In general, we calculate the weather-related revenue variance based on changing customer demand driven by weather variance from normal cooling degree days and normal heating degree days, net of NIPSCO Gas' weather normalization mechanism. Our composite cooling and heating degree days reported do not directly correlate to the weather-related dollar impact on the results of NIPSCO Operations. Cooling and heating degree days experienced during different times of the year or in different operating locations may have more or less impact on volume and dollars depending on when they occur. When the detailed results are combined for reporting, there may be weather-related dollar impacts on operations when there is not an apparent or significant change in our aggregated composite cooling and heating degree day comparison.

Sales

The increase in total volumes sold to electric customers for the three months ended September 30, 2026 compared to the same period in 2025 was primarily attributable to increased industrial and commercial usage, partially offset by decreased residential and wholesale and other usage. The increase in total volumes sold to electric customers for the nine months ended September 30, 2026 compared to the same period in 2025 was primarily attributable to increased industrial usage and increased residential and commercial customer count, partially offset by decreased residential usage.

The decrease in total volumes sold to gas customers for the three months ended September 30, 2026 compared to the same period in 2025 was primarily attributable to decreased usage by residential customers due to warmer weather. The decrease in total volumes sold to gas customers for the nine months ended September 30, 2026 compared to the same period in 2025 was primarily attributable to decreased usage by residential customers due to warmer weather and decreased usage by industrial customers, partially offset by increases in residential customer count.

Commodity Price Impact

Cost of energy for the NIPSCO Operations segment's electric activities is principally comprised of the cost of coal, natural gas purchased for internal generation of electricity, transportation of coal and natural gas, and the cost of power purchased from generators of electricity for its generation and transmission activities. For its gas distribution activities, NIPSCO Operations' cost of energy is principally comprised of the cost of natural gas procured and transported on behalf of and sold to customers while providing distribution services, as well as the transportation and storage costs of acquiring natural gas. NIPSCO

Operations has state-approved recovery mechanisms that provide a means for full recovery of prudently incurred costs of energy. The majority of these costs of energy are passed through directly to the customer, and the costs of energy included in operating revenues are matched with the cost of energy expense recorded in the period. Any difference in actual costs incurred and amounts billed to customers is recorded on the Condensed Consolidated Balance Sheets (unaudited) as under-recovered or over-recovered fuel and gas costs to be included in future customer billings. Therefore, increases in these tracked operating expenses are offset by increases in operating revenues and have essentially no impact on net income.

The underlying reasons for changes in our operating expenses for the three and nine months ended September 30, 2026 compared to the same period in 2025 are presented below.

Electric Supply and Generation Transition

NIPSCO continues to execute on an electric generation transition consistent with the 2018 Plan and 2021 Plan and maintained in the 2024 Plan. Before the planned retirement of the R.M. Schahfer coal facility at the end of December 2025, NIPSCO received the first of successive emergency orders under Section 202(c) of the Federal Power Act, to continue operating in 90-day increments, currently through December 18, 2026. Following receipt of the emergency order, NIPSCO filed a complaint at FERC seeking a modification of the MISO tariff to establish a mechanism for recovery and allocation of the cost to comply with this order. NIPSCO made two filings with the IURC related to the emergency order. The first filing is to confirm accounting treatment of current electric rate order, and the second is a filing for recovery of federally mandated expenses related to the emergency order, which will be utilized in the event that any costs of complying with the emergency order fall outside of the MISO tariff recovery. Jurisdictional revenues and operating costs associated with R.M. Schahfer are recorded within the Income Statement, but are subject to recovery under the tariff established by the Section 202(c) emergency order and returned to customers. For additional information, see Note 9, "Regulatory Matters."

On August 11, 2026, NIPSCO experienced an unprecedented severe weather event, accompanied by a series of subsequent storms over the ensuing days, which caused widespread damage across portions of its electric distribution system and resulted in outages impacting approximately 375,000 customers. Restoration efforts included the deployment of significant Company and contractor resources and the replacement of approximately 1,500 distribution and transmission poles and five transmission towers. In the third quarter, the Company incurred approximately $216.9 million of storm-related costs, including $13.2 million of operations and maintenance expense, and recorded retirements of damaged utility assets of $41.6 million related to the August storms. The Company capitalized approximately $162.1 million related to the restoration and replacement of damaged infrastructure.