Glen Kettering - SVP, Corporate Affairs Bob Skaggs - President and CEO Mike O'Donnel - EVP and Chief Financial Officer Randy Hulen - Director, Investor Relations

Faisel Khan - Citigroup Shneur Gershuni - UBS Carl Kirst - Credit Suisse First Boston Jonathan Arnold - Merrill Lynch Sam Brothwell - Wachovia Securities Mark Caruso - Millennium Partners Carrie Saint Louis - Fidelity Paul Ridzon - KeyBanc Josh Golden - JP Morgan Ashar Khan - SAC Capital

Welcome to the third quarter 2007 NiSource earnings conferencecall. (Operator Instructions) I will nowturn the call over to Mr. Glen Kettering, Senior Vice President of CorporateAffairs. Please proceed, sir.

Thank you, Tuwanda. Thank you and good morning to everyone.On behalf of NiSource I would like to welcome you to our quarterly analystcall. We appreciate the opportunity to be with you today and thank you fortaking the time to join us. Joining me this morning are Bob Skaggs, President and ChiefExecutive Officer, Mike O'Donnel, Executive Vice President and Chief FinancialOfficer, and Randy Hulen, Director of Investor Relations. As you know, the focus of today's call is to review ourthird quarter 2007 financial performance and provide an update on progress onour four-point business plan. We will then open the call to your questions. I would like to remind all of you that some of thestatements made on this conference call will be forward-looking statementswithin the meaning of the Safe Harbor provisions of the US Federal Securities Law. These forward-looking statements are subject to risks anduncertainties that could cause actual results to differ materially from thoseexpressed in the forward-looking statements. Information concerning factorsthat could cause actual results to differ materially is included in theManagement's Discussion and Analysis section of our Form 10Q quarterly reportfor the second quarter of 2007, which was filed August the 3rd of 2007 with theSEC. Our third quarter Form 10Q will be filed later today. And now, I'll turn the call over to Bob Skaggs.

Good morning and thanks for joining us today. In addition toour third quarter earnings report, I will be sharing an expansive update on anumber of significant business initiatives that are key to NiSource's long-termpath forward business strategy. Based on those initiatives and continued execution on ourfour part business plan, I'll also be reaffirming our 2007 operating earningsguidance and providing a longer-term 2008 through 2010 view of our earningsprofile. As you can see in this morning's news release, NiSourcetoday reported net operating earnings, non-GAAP of $21.5 million or $0.08 pershare for the three months ended September 30, 2007 compared with $29.6 millionor $0.11 per share for the third quarter of 2006. Operating earnings, non-GAAP were $132.4 million for thethird quarter compared to $142.9 million for the same period in 2006. Theoperating earnings reduction is the result of a onetime $16.2 million reserveassociated with the Northern Indiana Public Service Company, NIPSCO regulatorysettlement discussed later in the news release. Looking at the first nine months of the year, NiSource'sconsolidated operating earnings on a non-GAAP basis were $707.8 million adecrease from $714.3 million for the same period in 2006. As we've done inprior calls, we're focusing on net operating earnings and operating earnings,both non-GAAP measures because we believe these measures better represent thefundamental earnings strength and performance of the Company. These measures normalize for weather and certain otheritems, such as restructuring charges and significant reserve changes. Schedulesfor one and two in the news release provide a detailed reconciliation of netoperating earnings and operating earnings to GAAP. From an earnings standpoint, our third quarter performancewas largely in line with expectations and consistent with our earnings outlookfor the year. In a moment, I will speak more to the specifics of the quarterresults. More notable from a long-term standpoint, the NiSource teamhas made significant progress on several threshold business initiatives. Theseinitiatives involve each of our major business units and are designed toadvance NiSource's ongoing efforts to reposition the Company for long-termsustainable earnings growth. In many respects, these are watershed events that will helpus unlock the underlying value of our assets, address legacy issues and set thestage for future earnings growth. The most recent of these accomplishmentshappened yesterday when NIPSCO filed a comprehensive Integrated Resource Planor IRP with the Indiana Utility Regulatory Commission. The IRP identifies NIPSCO's plans for addressing itscustomers electric generating capacity needs. More specifically the IRP showsthat NIPSCO will need approximately a 1000-mega watts of additional capacity by2014 and concludes that the best alternative to meeting that need would be theacquisition of gas fired combined-cycle generating capacity. The IRP also suggested that NIPSCO add winds generateelectric purchases and energy efficiency programs to its portfolio. Based onthe direction of the IRP, NIPSCO has finalized purchase and sales agreements toacquire two gas-fired generating facilities with a combined capacity of 1060mega watts. In late November, NIPSCO asked the IURC to grant acertificate of public convenience and necessity authorizing the purchase of theSugar Creek Power Plant a 535-mega watt combined cycle gas cogenerationfacility owned by the LS Power Group in West Terre Haute, Indiana. And NiSource's Whiting Clean Energy facility, a 52-megawatts combined cycle gas cogeneration facility in Whiting, Indiana. Bothfacilities were successful bidders in the request for proposal process. Theacquisitions are targeted to be completed in the second quarter of 2008 andrepresent a NIPSCO rate base investment in excess of $500 million. In addition to meeting NIPSCO's long-term customer needs theoutcomes of the IRP process support and align with the state of Indiana'sHoosier Homegrown Energy Plan, which calls for growing Indiana jobs and incomesby producing more of the energy Indiana needs from its own natural resources,while encouraging consumers to use energy wisely. Closely related to the IRP and NIPSCO's efforts to addgenerating capacity to its portfolio is an important settlement that NIPSCOannounced on October 16th. The agreement with regulatorystakeholders and large industrial customers addresses the cost of electricpower the Company has been required to purchase to meet growing market demands. This so-called fuel adjustment clause or FAC settlement,which the IURC is expected to rule on by year's end will resolve the purchasepower matter and notably contains provisions addressing NIPSCO's need to add toits electric generation portfolio. To that point, the settling parties also agreed to NIPSCO'sdeferral of depreciation expense and carrying charges associated with itsacquisition of combined cycle generating facilities. The settlement includes a onetime refund of $33.5 millionand as noted earlier, third-quarter operating and earnings for electricoperations reflect a $16.2 million charge related to that settlement. Beyond Indiana, on October 26 2007, Columbia Gas of Ohio andthe staff of the Public Utilities Commission of Ohio filed a joint stipulationthat clarifies the Company's operational responsibilities for customer ownedservice lines and risers. If approved by the Commission, the agreement will establisha recovery mechanism to collect certain costs associated with repair orreplacement of customer owned service lines and risers and also would resolveoutstanding issues related to this important customer safety program. On October 30th, Columbia Gulf Transmission Company andTennessee Gas Pipeline Company entered into a blinding purchase sale agreementwhereby Tennessee Gas Pipeline will buy the majority of Columbia Gulf'soffshore Louisiana assets and operations in the Gulf of Mexico. The agreement, which is subject to regulatory approvals,also provides settlement of all pending litigation between the parties atclosing. I would note these facilities don't comprise a significant portion ofColumbia Gulf's overall asset base and are not considered to be strategic to ColumbiaGulf. As most of you know, Columbia Gulf is focused on growing itsextensive onshore business. Both companies currently anticipate making thenecessary regulatory filings by year-end with a closing during the first halfof 2008. Finally, on October 22nd, NiSource and IBM reached anagreement in principal on the restructuring of their business servicesagreement. This proposed restructuring, which is expected to be finalized byyear end will put NiSource in the position to be more effectively manage itsadministrative expenses while ensuring delivery of services required to meetNiSource's needs. As you can see, this extensive list of recentaccomplishments unequivocally shows that we are moving aggressively andthoughtfully to clear the deck of distractions, engage our stakeholders, andmake investments so that we can better position our team to execute onNiSource's growth strategy. As stated previously, our investment-driven strategy ispremised on enhancing and expanding NiSource's core strategic assets, executingon an array of promising growth prospects, and synchronizing our investmentswith complementary commercial and regulatory initiatives. Another important development to share regarding ourpath-forward strategy is our intention to proceed with the formation of MasterLimited Partnership for certain of our Gas Transmission and Storage assets. NiSource intends to file a registration statement with theSecurities and Exchange Commission later this year for the offer and sale of alimited partnership interest in a new subsidiary. We believe the formation of aMaster Limited Partnership is a natural complement to our Gas Transmission andStorage growth strategy and to provide access to competitively priced capitalto support future growth investment. During the question-and-answer session, please bear with me.I'm limited to what I can say regarding our intent to proceed with theformation of the MLP, due to SEC rules. In addition to these key businessinitiative accomplishments, I want to update you on the day-by-day,brick-by-brick actions our teams are taking to execute on fundamental elementsof our four-part business plan. As a reminder, that plan includes commercial growth andexpansion of our transmission and storage business, investment-drivenregulatory and commercial initiatives and strong financial process and expensemanagement. On October 31st 2007, the Massachusetts Department of PublicUtilities, DPU approved a $5.9 million increase in Bay State Gas Company's baserates effective November 1. The increase was made by Bay State under the termsof its existing performance-based rate mechanism. In a separate filing, Bay State Gas on October 17thpetitioned the DPU to allow the company to collect an additional $7.5 millionin annual revenue. Bay State also requested approval of a steel infrastructuretracker that would allow for recovery of ongoing infrastructure replacementinvestment. As I've mentioned previously, both NIPSCO and Columbia Gasof Ohio are fully focused on preparations for significant rate proceedingsduring 2008. Columbia Gas of Ohio is conducting outreach and planning effortsnecessary to follow traditional cost of service base rate case in early 2008while NIPSCO is preparing to file its electric rate case as scheduled by July1st, 2008. In fact, the initiatives I mentioned earlier help to providea clear line of sight for both of these milestone proceedings. Likewise,Columbia Gas of Pennsylvania is in the advanced stages of preparing a base ratecase filing to be made in January 2008. CPA also launched a 20-year natural gas infrastructureenhancement project that will replace approximately 600,000 feet of gas distributionlines each year while synchronizing those investments with regulatory recovery. Our CPA team is intensely focused on advancing legislativeinitiatives in Pennsylvania to provide for regulatory mechanisms that willenable the state's utilities to recover investments in natural gasinfrastructure improvement programs on a timely basis. Notably, the Chairman of the Pennsylvania Public UtilityCommission as well as two state legislative leaders is calling on thePennsylvania general assembly to pass such legislation. And on August 29,Columbia Gas of Kentucky received approval of a rate case settlement thatincreases total annual revenues by $7.25 million about a 4.5% increase. Turning to NiSource Gas Transmission & Storage, theirexpansion projects are continuing to advance in various stages of development.Construction continues on the Millennium Pipeline, scheduled to begin servicein November 2008 while the Federal Energy Regulatory Commission in Octoberissued a favorable environmental assessment for Columbia Gas Transmission's a$140 million Eastern Market Expansion Project. A proposal to expand natural gas storage and pipelinefacilities in Ohio, West Virginia, and Virginia that assessment is subject topublic comment. Also in response to growing demand to connect the diversesupply mix sourced by NiSource's Gas Transmission and Storage assets withgrowing markets in the Southeast our Gas Transmission and Storage teamannounced a blinding open season for an expansion of our Columbia Gulf systemfor delivery to Florida Gas Transmission. That open season ends today and the project is planned to goin service by the summer of 2008. I look forward to providing a report on thisexciting opportunity in future business updates. And finally, on the financial management front in lateAugust, NiSource successfully issued $800 million of senior unsecured notesthat mature in 2018. The proceeds were used to repay short-term bank borrowingsand for capital expenditures and general corporate purposes. The fact that our finance team was able to successfullycomplete this plan placement despite choppy market conditions is a testament toNiSource's strong capital access and liquidity. As you can see, across the board, our teams are continuingto execute against all elements of our four-part growth strategy. In fact,based on that continued solid performance we are affirming that NiSourceremains on track to achieve our 2007 net operating earnings guidance ofapproximately $1.35 per share non-GAAP. Looking ahead, we believe net operating earnings per share,non-GAAP from continuing operations for the 2000 to 2010 period will fallwithin a range of $1.25 to $1.35 per share. Thereafter, NiSource expects itsongoing capital investment program of more than $1 billion per year to producemeaningful annual growth in earnings per share. This outlook is consistent with my comments in late Mayconcerning our so-called flattish earnings outlook for the next several years.Particularly, as we navigate a number of milestone, regulatory and rateproceedings, which will again put us on solid footing for long-term sustainablegrowth. Now, let me shift to an overview of NiSource's third-quarteroperating earnings. During the quarter after the NIPSCO regulatory settlementmentioned earlier, increased revenues from NiSource's core business units alongwith improved performance from NiSource's Whiting Clean Energy unit, more thanoffset operating expenses. Gas Distribution Operations reported an operating earningsloss of $41.9 million versus an operating earnings loss of $30.8 million in thethird quarter of 2006. The increased loss resulted primarily from higheroperating expenses, partially offset by increased net revenues. Operating expenses, excluding the impact of trackers were$14.7 million higher than the prior year, mainly due to higher employee andadministrative expenses, property taxes, depreciation costs, and notably areversal of a restructuring charge that benefited last year's results by $5.1million. The employee and administrative costs include normal payrollbenefits in corporate services. Net revenues, excluding the impact of trackerswere $3.3 million higher than the same period in 2006, primarily as the resultof regulatory initiatives and other service programs. Gas Transmission and Storage operations reported operatingearnings of $75.4 million versus operating earnings of $69.4 million in thethird quarter of 2006. The increase resulted primarily from higher net revenuesfrom firm capacity reservation fees. A key driver behind this improvement is that Columbia Gulf'smainline throughput has increased as a result of storage injections, gas-firedelectric generation demands, and increased marketing activities. Operating expenses, excluding the impact of trackers wereslightly lower than the comparable period last year. Electric operationsreported operating earnings of $102 million versus operating earnings of $113.1million in the same quarter last year. Net revenues decreased by $5.3 million due to primarily tothe accrual that was reported for this settlement relating to power purchase byNIPSCO that we discussed earlier, partially offset by higher wholesale andcommercial margins and lower unrecoverable MISO costs. Operating expenses increased by $5.8 million due primarilyto higher employee and administrative costs and restoration costs associatedwith severe storms experienced during the quarter. Other operations reported operating earnings of $5.5 millionin the third quarter of 2007 compared with an operating earnings loss of $0.1million in the prior-year period. The improvement resulted from higher netrevenues from the Whiting Clean Energy facility. As you will recall, we restructured Whiting's steam contractwith BP late last year, which has delivered the intended effect ofsignificantly improving the overall economics of that arrangement. Other items, interest expense increased by $4.6 million dueto higher short-term interest rates. Other net improved to $1.4 million incomecompared to a loss of $0.8 million last year. The improvement resultedprimarily from higher interest income in the current period. Focusing on liquidity, net cash flows from operatingactivities for the nine months ended September 30 2007, were $398.3 million adecrease of $472.9 million from the $871.8 million of cash flow in the firstnine months of 2006. The 2006 cash flow amount was unusually high because ofworking capital changes beginning in late 2005 that stemmed from colder weatherand higher natural gas prices. Beyond the changes in working capital increases in netincome and changes in deferred taxes totaling $141.9 million improved net cashflow from operating activities relative to last year. To wrap up, overall, NiSource's performance for the thirdquarter was solid and most importantly, our team has made significant processin resolving legacy issues, moving forward with new growth projects andregulatory initiatives and in advancing our four-part plan for growth. Plus our fundamentals, such as usage, customer attrition,and demand for pipeline capacity are showing notable improvement. And we'veadvanced our work on the MLP option, which has the potential to provideadditional flexibility and access to capital to fuel growth. I'll make just one final comment on our outlook for the nextseveral years. In providing the $1.25 to $1.35 earnings per share range, we'retrying to be as open as possible with visible and realistic estimates. Specifically for 2008, we anticipate earnings to be towardthe lower end of the range, particularly in light of the NIPSCO capacitysituation and the so-called FAC settlement. For example, our plannedacquisition of the new generating facilities will place some pressure onearnings prior to the effectiveness of our 2008 rate case. To add to that, I give you the assurance that the entireteam is poised to go all out in 2008 to reach successful closure on the NIPSCOsituation, as well as, successfully complete our other watershed rateactivities in Ohio, Pennsylvania, Bay State, and accelerate our GT&S growthprojects. Assuming strong outcomes in 2008, we'd expect the earningstrajectory in 2009, 2010 to trend toward the upper end of the range. Again, Iwould emphasize that these broad array of bellwether initiatives, coupled withour unprecedented capital investment program, will position NiSource formeaningful growth in earnings in 2011 and beyond. As always, we remain committed communicating with ourinvestors and of all of our stakeholders in a transparent and timely mannerregarding these and all of our efforts. Ongoing updates will be providedthrough our analyst calls and news releases, posted promptly on nisource.com. Thanks again for participating today and for your continuedinterest and support in NiSource. And at this point, let's open the call toquestions.

(Operator Instructions) And your first question comes fromthe line of Faisel Khan with Citigroup. Please proceed. Faisel Khan - Citigroup: In terms of the new investments at NIPSCO, how does thataffect your long-term guidance? Is that baked into your long-term guidancealready that these plans will make it into rate base?

Those are baked into the estimates. Faisel Khan - Citigroup: Okay. I mean do you think that this -- that theseinvestments kind of offset the last few years of under-investment in thegeneration part of that business?

We feel that the process that we have gone through with, inthe IRP, the thoroughness, the extensive study and the involvement of thestakeholders certainly points to the need for over 1,000 megawatts of capacitynear term, right now. And so we think that process has established it and we areprepared to go through the certificate process to thoroughly vet that, and thenmove on to the rate case process. So we think that we will have that showingand the need will be justified. Faisel Khan - Citigroup: So most of the interveners are pretty much on board withthis IRP plan? Are there any potential adverse type of movements from otherinterveners?

It has been an open process; we've tried to be inclusive.We've tried to keep folks current on the studies and the process. And we doexpect a consensus to develop around this solution. Having said that, as youknow, in regulatory proceedings, different points of view surface and issuesare vigorously debated. We are prepared for that and again, we feel like that ourwork with stakeholders and the process that we have followed position us for agood decision. Faisel Khan - Citigroup: What does -- in your guidance then, what does it assume interms of any sort of rate -- any sort of impact from a NIPSCO rate case? Do youbelieve that post of this investment that you will be earning a fair return onequity as a business?

Yes. That's right. We are expecting a fair return on ratebase in NIPSCO proceeding and for that matter, all the rate proceedings that wehave teed up in 2008. Faisel Khan - Citigroup: Okay.

Again, the basis of the strategy is good, qualityinvestments in infrastructure, reliability, safety, good strong organic growthand to that, we expect fair returns. Faisel Khan - Citigroup: But if I add up all -- if I add up kind of a fair return atNIPSCO with this recent investment you are talking about, and I look at yourother gas utilities and their rate cases you filed there, including the returnin Massachusetts. Shouldn't that help drive earnings growth kind of past 2009,2010 above kind of your guidance? Or is there -- are you seeing larger costpressures in your business overall that are eroding some of that rate release?

Again, I believe that the guidance we're giving between nowand 2010 is consistent with fair returns, a well-managed cost structure. Faisel Khan - Citigroup: Okay. How would you pay for these plants at NIPSCO? How willthey be capitalized? Mike O'Donnell: This is Mike. The Whiting plan, of course, is alreadyfinanced. Faisel Khan - Citigroup: Right. Mike O'Donnell: On NiSource's balance sheet, the other plan we would startby borrowing the money for that. But then eventually, it would be funded alongthe lines of NIPSCO's capital structure for rate-making purposes. Faisel Khan - Citigroup: But there's no reason to go to the outside markets then? Mike O'Donnell: We don't think so. Not for that, no. Faisel Khan - Citigroup: So then would this be like a complete equity contribution toNIPSCO? Mike O'Donnell: Not sure about that. That gets into some internal capitalstructure issues, which really are kind of internal. I think for the way youthink about it is NiSource would probably finance it with debt, but on NIPSCO'sbooks, it would be a blend of debt and equity. Faisel Khan - Citigroup: Okay. And how would be the BP contract be affected by thisas a purchase by NIPSCO at Whiting?

We see NIPSCO stepping in the shoes of Whiting and honoring,upholding our agreement with BP. So NIPSCO effectively would be providing anysteam demand that BP has. Faisel Khan - Citigroup: Okay. And the gas utility, the $6 million rate increase inMassachusetts, is that -- you said that's a base rate increase but it's relatedto the PBR? I was trying to connect the two.

No. You're right. The adjustment was under the terms of ourPBR mechanism and it does adjust base rates. Faisel Khan - Citigroup: Okay.

It's not a rider. It goes into base rates and treated thatway. Faisel Khan - Citigroup: And how does the PBR work on that? It raises base ratesbased on new investment and new plant? Is that how it works or theconservation?

It's an index and a series of measures and a fairly involvedformula that we follow to adjust the rates. We can give you the details on howthat mechanism works. Faisel Khan - Citigroup: Okay. And you said on the -- have you identified assets toput into the MLP? I know you said you are constrained in terms of what you cantalk about but I'm just wondering if you have actually identified the assets.

We feel like we are limited on what we can say and we'rejust not going to be able to go much further than what we've already done. Faisel Khan - Citigroup: Okay. Is there -- on the pipeline system, is there anyexcess capacity or any uncontracted capacity on the pipelines?

Effectively, the pipelines are sold out. Faisel Khan - Citigroup: Okay. And that --?

Now again, we optimize on a daily, hourly basis to ensurethat we are optimizing the system. But effectively, Columbia Gas Transmissionis sold out; effectively, mainline gulf is sold out. Faisel Khan - Citigroup: Okay. And on your expansion projects, is there room toincrease volumes or increase potential earnings on the existing projects youhave in place or that are going in place, meaning --? Or are they fully 100%contracted and to expand earnings on those systems you would have to investmore capital?

It's more the latter. Certainly, adding facilities alsoprovides opportunities for additional optimization but these are fullycertificated, fully contracted facilities when we put them in service. Faisel Khan - Citigroup: Okay. Great. Thanks for the time, guys.

Thank you.

Your next question comes from the line of Shneur Gershuniwith UBS. Please proceed. Shneur Gershuni - UBS: Good morning guys. Busy quarter. I'm going to try and keepmy questions short to give other people an opportunity. Just with respect tothe NIPSCO filing and so forth, you basically, you've, taken this charge for$33.5 million on an operating income basis to reflect the short power issuesand some of the issues the interveners had with respect to Mitchell. That said, with the filing that you've done with NIPSCO nowand the fact that you are going to add Whiting and so forth, does this addressthese issues so that these interveners that have created those challenges inthe past will basically bless this deal and not -- I guess file friendly briefswith respect to the rate case?

We've certainly entered into that settlement. We've beenworking with the stakeholders through that process, the IRP process,discussions with Mitchell to build a consensus, develop support for addressingthe capacity needs, and for that matter, the ongoing rate structure. So it's avery integrated, sequential, global process and repositioning NIPSCO to be oneof the best utilities in the country, and that's what we're working on andthat's what the process is designed to lead us through. I emphasize it's a process and we're going to do this in theopen with the stakeholders and reach the best answers as quickly as we can. Shneur Gershuni - UBS: Okay. Two other short, quick questions. With respect toWhiting in the RFP process, did you use the current book value or did you usean estimated book value?

Well. To determine the selection of Whiting and Sugar Creek,we, as you may recall, had a competitive RFP that went out in the summer andwas a very, very competitive process. The bids were submitted and evaluated ina very competitive dynamic environment. So it was a market-driven process. Shneur Gershuni - UBS: Okay. I guess my final question is just with respect to theIBM contract. What exactly has changed with -- what has IBM agreed to make thiscontract work a little better than it has in the past?

Again, you're going to have to bear with me. I'm a bitlimited on the details that I can share at this point with regard to the IBMagreement. We've entered into an MoU. It is contingent on a definitiveagreement that we intend to reach prior to the end of the year. I can say this that the focus of the restructured agreementis going to be on information technology services. That was the largest pieceof this outsourcing arrangement. We think it is certainly IBM's strongest areaof competency expertise and that's going to be the focus of the agreement. Other areas, day-to-day operations of F&A, HR, supplychain, metered cash, things like that, NiSource will be focusing on. So thatgives you the essence of where the relationship is headed. And we think it willprovide better services, particularly better IT services and allow us to focuson what we need to focus on as NiSource. Shneur Gershuni - UBS: Okay. I have some more questions but I'm going to jump backin the queue. Thank you, Bob.

Okay. Thanks.

Your next question comes from the line of Carl Kirst withCredit Suisse. Please proceed. Carl Kirst - Credit Suisse First Boston: Hey, good morning everybody.

Hey Carl. Carl Kirst - Credit Suisse First Boston: Just a few cleanups. Bob, is the MLP specifically baked intothe guidance? I just wanted to clarify that since I know it doesn't technicallyhave board approval and so I'm just trying to…

The answer is effectively it is baked into the guidance. Carl Kirst - Credit Suisse First Boston: Okay. Fair enough. Can you just give us a sense for what ifChris is there, this refresh my memory what the maintenance cap is for thepipelines? And also on the pipes, I was hoping, and I know it's not materialbut if we could actually, if you can disclose it both a sale amount to GDP andwhat the associated EBITDA is?

Just on the ongoing capital maintenance levels, this is aballpark, Carl. It's between $100 million and $120 million. Carl Kirst - Credit Suisse First Boston: And that's for the entire system?

Yes. What we call GT&S, Gas Transmission and Storage;and that is a ballpark number. Chris and team are working hard on coststructure issues and the like. And again, that's a ballpark number that willcontinue to be focused on rigorously by the team. Your next question was aboutthe Tennessee transaction? Carl Kirst - Credit Suisse First Boston: Correct.

And I'm sorry, you're asking about the value of thefacilities? Carl Kirst - Credit Suisse First Boston: Well I was just wondering what the sale price was and whatany associated EBITDA?

Give or take book value, $8.5 million of the assets and interms of EBITDA, very little. Carl Kirst - Credit Suisse First Boston: All right. Okay. And this basically goes back to the FERCinterconnect issue, what this clears?

Yes. It does and we made the point about the strategicnature of the assets from our perspective, nonstrategic. And we think thisrepresents a win-win and albeit very small, nominally accretive to us. Carl Kirst - Credit Suisse First Boston: Fair enough. And last question and I want to be cognizant ofwhat you can say and what you can't say about the MLP but as you look at itfrom a NiSource standpoint, is there -- previously we were looking at becauseof some of the tax issues, getting over that hump would be a challenge. Didsomething change there to allow you to be able to better digest whatever taxhurdle might be out there?

Carl, I'm going to have to just drop back to the party linethat we continue to believe it's a valuable tool. It's going to be a goodcomplement and we intend to proceed. Carl Kirst - Credit Suisse First Boston: Fair enough. I appreciate the color and good luck.

Thanks.

Your next question comes from the line Jonathan Arnold withMerrill Lynch. Please proceed. Jonathan Arnold - Merrill Lynch: Good morning.

Good morning Jonathan. Jonathan Arnold - Merrill Lynch: Just a kind of conceptual question, Bob. In terms of thegrowth rate and absence of growth over this period. From listening to what yousaid, my sense is that this is largely around the electric utility and thecosts of funding the acquisitions as you move into the rate case and thenobviously the rate case itself. If you were to look at the company ex-NIPSCO, do you have asense of what we might be seeing in terms of underlying growth just trying tohit a focus on the pieces that are outside of the electric utility and is thatsomething you could do?

Look. Well, I can just give you a point of view that theseare regulated stable of assets growth is going to be investment driven. Wethink we have a healthy stream of growth projects at all segments. And giventhat, we think the inherent growth of 3% to 5% is what we think is thereinherently and I'm now talking conceptually and at 50,000 feet. Near-term, you identified we do need to deal with the NIPSCOsituation but I just always add and we are talking about NIPSCO. We're on thethreshold of a series of bellwether rate cases and these are significant casesagain, infrastructure driven, rate design, certainly a big issue but that'sOhio, Pennsylvania and Bay State. So that's a bit of I guess a macro view of the earningspower of the company, as well as, what we need to navigate through over thenext 12 months. Jonathan Arnold - Merrill Lynch: Okay. Thank you.

Your next question comes from the lien of Sam Brothwell withWachovia. Please proceed. Sam Brothwell - Wachovia Securities: Hi. Good morning.

Hi, Sam. Sam Brothwell - Wachovia Securities: Bob, I know you haven't disclosed numbers around the powerplant purchase and obviously, the contemplated transfer of Whiting. But in yoursettlement discussions, did you kind of give these guys an idea of what thenumbers would look like?

I can't answer that specifically, but I would say that thestakeholders are knowledgeable folks and they know generally speaking, the costlevels, directionally what the cost levels are for facilities of this size inthe Midwest. Sam Brothwell - Wachovia Securities: Okay.

And again, we've indicated that this is $0.5 billion of ratebase investment, $0.5 billion plus. Sam Brothwell - Wachovia Securities: Okay.

For NIPSCO. Sam Brothwell - Wachovia Securities: Okay.

So that won't be a surprise if that's really what you aredriving at. I think folks certainly expect dollars of that magnitude,investment levels of that magnitude. Sam Brothwell - Wachovia Securities: Okay. And as you contemplate that, I mean, your guidancethrough ‘10 is flat and you're looking at $0.5 billion rate base investment inthat kind of neighborhood. I think you alluded to seeing an optic post 2010, is thatthe time period in which you think this rate base investment will start to bearfruit in your earnings?

Yes. Again, I think that's an accurate way to say it. I didmention in the prepared remarks, in my closing effectively what I said was that2008 is a significant year because of the NIPSCO rate case, Ohio Pennsylvania.There are scenarios where we work through all of those cases to closure in 2008and you see a trajectory beginning in 2009. That's effectively what I said. But to be candid,straightforward open as possible we all know that traversing that many caseseffectively, favorable outcomes in 12 months or less is a tall order, one thatthe teams are poised to tackle. They are after it and it's an all out effort toreach closure by the end of '09. Sam Brothwell - Wachovia Securities: Okay. Thank you very much.

And your next question comes from the line of Mark Carusowith Millennium. Please proceed. Mark Caruso - Millennium Partners: Good morning, Bob.

Good morning, Mark. Mark Caruso - Millennium Partners: So, I guess just a few clarifications here. As far as, theMLP goes I imagine throughout this whole process, the board has kind of beengetting steady updates and involved with what's going on and it's just a matterof you guys getting together and finalizing what you guys think are the rightthings. Is that the right way to think about it?

Yes. The board and in particular our finance committee hasbeen engaged from day one in and around this consideration, much like they werein the strategic review. Mark Caruso - Millennium Partners: Got it.

Totally engaged. Mark Caruso - Millennium Partners: And then as far as, the guidance of 2010 goes and withwhat's going on with NIPSCO, is it right to assume that as you move along allthese different rate cases, you guys will be updating us once you find out theoutcomes, as far as, the guidance and reassessing the guidance based on theoutcomes there? Because I guess one of the things I'm confused about and itsounds like others is we've got flat, but you also do have big things on thehorizon. I know it's very sensitive and there's a lot going on there as far astrying to make a prediction there would be very tough and you don't want to beheld to that. But at the same time I would think that as you work your waythrough it, we will get updates on that and this is just kind of a matter oftrying not to step in front of all of what's coming?

Well said. And hopefully we've built a track record that ourcommunication, it's an ongoing process. We try to be as expansive, complete aswe possibly can and hopefully this morning is a prime example of beingexpansive and complete in providing the sorts of updates you have noted. Mark Caruso - Millennium Partners: That’s it. Thanks.

Your next question comes from the line of Carrie Saint Louiswith Fidelity. Please proceed. Carrie Saint Louis - Fidelity: Hi. Good morning.

Good morning, Carrie. Carrie Saint Louis - Fidelity: I have two questions. First, I was curious what the use ofproceeds from the MLP offering would be? How would you take those proceeds andhow would you apply them?

We see using those to support growth and investment, theinfrastructure that we are investing in. Carrie Saint Louis - Fidelity: So keeping it all with NGT&S business or would it go upto the parent at all?

Well, not necessarily. I don't think we've engineered itthat precisely at this point. Carrie Saint Louis - Fidelity: Okay.

But certainly, again, we're teeing up an aggressiveinfrastructure investment program and we think equity-like financing, notcommon, but equity-like financing that could be provided by a vehicle like anMLP is going to support that sort of investment. Carrie St. Louis - Fidelity Management and Research: Okay. And then you mentioned the funding for the IRP. Iguess you said it would be through debt markets and I was curious if you hadfigured out if that would be just straight debt or if you are still examiningthe hybrid option?

Carrie, this is Mike. We have not figured out the exactfinancing plan yet. Keep in mind that the purchases will take place probablyMay, June of next year. The cash will flow and we probably won't need to do anyfinancing until sometime after May or June of next year. So we haven't reallynoted down the specifics yet. Carrie Saint Louis - Fidelity: Okay. But it would look like you would be financing in theback half of next year in debt financing?

I think that's a good assumption, yes. Carrie Saint Louis - Fidelity: Okay. Great. Thank you.

Thank you.

Your next question comes from the line of Paul Ridzon withKeyBanc. Please proceed. Paul Ridzon - KeyBanc: Good morning. In the spring, you talked about a flattishearning trajectory and in the interim you seem to have found a good number ofvalue-enhancing opportunities. But it seems as other trajectory has perhapseven worsened because it's now flat to down. What are the offsets you're seeingto these opportunities that you've discovered?

Well, just to clarify. We did suggest that in '08 we haveissue to deal with in and around the NIPSCO capacity situation and the FACsettlement; indicated that that puts pressure in particular on 2008. We also suggested looking beyond 2008, assuming favorableoutcomes NIPSCO rate case, Ohio, Pennsylvania, Bay State, GT&S growthprojects, we see the trajectory going to the Northeast and growing. So that's the way we look at that range and again, it'sgoing to be driven by the investments and successfully working through theserate cases. Those are the near-term variables. Paul Ridzon - KeyBanc: Aside from the Gulf assets, are you reviewing any otherpotential assets for monetization or was that pretty well vetted out in yourstrategic review process?

Pretty well vetted out in the strategic review process. Wecontinue to look at the portfolio, but we love the assets and as I said in theprepared remarks, we're focused on this core portfolio of assets. Paul Ridzon - KeyBanc: Okay. Thank you very much.

Your next comes from the line of Josh Golden with JP Morgan.Please proceed. Josh Golden - JP Morgan: Yes. Good morning.

Good morning, Josh. Josh Golden - JP Morgan: I'm curious if the creation of the MLP changes yourcommitment to investment grade ratings and also just curious given the tax baseon some of these assets will the assets that are moved to the MLP be relativelynew assets that are coming on stream or will you work to transition olderassets into the MLP?

Yes. Josh, I apologize. Again on the last part of yourquestion, the latter part of your question around specifics on the MLP. I'mgoing to have to pass on that because of the SEC restrictions and I just can'tget that detailed, so I apologize for that. On the first part of your question we are committed tomaintaining investment grade credit and that's with or without the MLP. Josh Golden - JP Morgan: Okay. So there's been no change there.

No change. Josh Golden - JP Morgan: Thank you.

Your next question comes from the line of Ashar Khan withSAC Capital. Please proceed. Ashar Khan - SAC Capital: My questions have been answered. Thank you.

Okay. Thanks.

(Operator Instructions) At this time, there are noadditional questions. I would now like to turn the call over to Mr. Bob Skaggsfor the closing remarks.

Well again, we appreciate your participation, your support,your ongoing interest. We will continue to keep you posted. Thanks. Have a goodweekend.

Ladies and gentlemen, that concludes the presentation. Youmay now disconnect and have a wonderful day.