Nisource (NI) risk factors, FY2024 10-K

OPERATIONAL RISKS

1. 01We may not be able to execute our business plan or growth strategy, including utility infrastructure investments, or business opportunities, such as data center development and related generation sources and transmission capabilities to meet potential load growth
2. 02Data center growth in our service territories, including a focus on northern Indiana, while providing growth opportunities that enhance our business strategy, provide significant financial, operational, and regulatory risks that must be effectively managed
3. 03Our distribution, transmission and generation activities involve a variety of inherent hazards and operating risks, including potential public safety risks
4. 04We currently conduct and may conduct in the future certain operations through a JV arrangement involving third- party investors that may result in operational impasses or litigation, including business delays as a result of such arrangements
5. 05Failure to adapt to advances in technology, including alternative energy sources, and changes in laws or regulations to support such advances in technology or alternative energy sources, and our ability to manage such related costs could make us less competitive
6. 06Increased dependency on technology may hinder our business operations and adversely affect our financial condition and results of operation if such technology fails
7. 07Aging infrastructure may lead to disruptions in operations and increased capital expenditures and maintenance costs
8. 08We may be unable to obtain insurance on acceptable terms or at all, and the insurance coverage we do obtain may not provide protection against all significant losses
9. 09Aspects of the implementation of our electric generation strategy, including the timing of the retirement of our coal generation units or the addition of new generation resources, may be delayed and may not achieve intended results
10. 10completion dates of our projects could also include delays in the financial return of certain investments and impact the overall timing of our electric generation transition
11. 11Our capital projects and programs subject us to construction and supply risks, and are subject to regulatory oversight, including requirements for permits, approvals and certificates from various governmental agencies
12. 12A significant portion of the gas and electricity we sell is used by residential and commercial customers for heating and air conditioning. Accordingly, fluctuations in weather, gas and electricity commodity costs, and economic conditions impact customer demand
13. 13Fluctuations in the price of energy commodities or their related transportation costs, or an inability to obtain an adequate, reliable and cost- effective fuel supply may impact our ability to meet customer demand
14. 14We face increased competition for talent which may result in longer hire times or increased cost due to the competitive nature of certain positions
15. 15If we cannot effectively manage new initiatives and organizational changes, we will be unable to address the opportunities and challenges presented by our strategy and the business and regulatory environment
16. 16from our transformation initiatives have put short-term pressure on employees due to the volume and pace of change and, in some cases, the loss of personnel. Front-line workers are being impacted by the variety of process and technology changes that are currently in progress
17. 17Actions of activist stockholders could negatively affect our business and stock price and cause us to incur significant expenses
18. 18We outsource certain business functions to third-party suppliers and service providers, and may be impacted by substandard performance or quality by third parties
19. 19In addition, we collect and retain personally identifiable information of our customers and employees. Customers and employees expect that we will adequately protect their personal information
20. 20Compliance with and changes in cybersecurity requirements have a cost and operational impact on our business, and failure to comply with such laws and regulations could adversely impact our reputation, results of operations, financial condition and/or cash flows
21. 21The impacts of natural disasters, acts of terrorism, acts of war, civil unrest, accidents, public health emergencies or other catastrophic events may disrupt operations and reduce the ability to service customers
22. 22We are exposed to significant reputational risks, which make us vulnerable to a loss of cost recovery, increased litigation and negative public perception
23. 23The physical impacts of climate change and the transition to a lower carbon future are impacting our business and could materially adversely affect our results of operations
24. 24We are subject to operational and financial risks and liabilities associated with the implementation and efforts to achieve our carbon emission reduction goals

FINANCIAL, ECONOMIC AND MARKET RISKS

1. 25We have substantial indebtedness which could adversely affect our financial condition
2. 26A drop in our credit ratings could adversely impact our cash flows, results of operation, financial condition and liquidity
3. 27Adverse economic and market conditions, including increases in inflation or interest rates, recession or changes in investor sentiment could materially and adversely affect our business, results of operations, cash flows, financial condition and liquidity
4. 28Most of our revenues are subject to economic regulation and are exposed to the impact of regulatory rate reviews and proceedings
5. 29The actions of regulators and legislators could result in outcomes that may adversely affect our earnings and liquidity
6. 30Changes to rates may occur at times different from when costs are incurred. Additionally, catastrophic events at other utilities could result in our regulators and legislators imposing additional requirements that may lead to additional costs or operational requirements for the companies
7. 31Our business operations are subject to economic conditions in certain industries
8. 32We are exposed to risk that customers will not remit payment for delivered energy or services, and that suppliers or counterparties will not perform under various financial or operating agreements
9. 33We are a holding company and are dependent on cash generated by our subsidiaries to meet our debt obligations and pay dividends on our stock
10. 34Capital market performance and other factors may decrease the value of benefit plan assets, which then could require significant additional funding and impact earnings
11. 35We have significant goodwill. Any future impairments of goodwill could result in a significant charge to earnings in a future period and negatively impact our compliance with certain covenants under financing agreements
12. 36The outcome of legal and regulatory proceedings, investigations, inquiries, claims and litigation related to our business operations may have a material adverse effect on our results of operations, financial position or liquidity
13. 37Our businesses are subject to various federal, state and local laws, regulations, tariffs and policies and a failure to comply with changes in, or new or different interpretations of, such laws, regulations, tariffs and policies could have an adverse impact on our business
14. 38Changes in tax laws or the interpretation thereof and challenges to tax positions could adversely affect our financial results