Glen Kettering – SVP, Corporate Affairs Bob Skaggs – President and CEO Steve Smith – CFO and EVP

Xin Liu – JPMorgan Theresa Kim [ph] – Gideon [ph] Carl Kirst – BMO Capital Markets Paul Ridzon – KeyBanc Capital Markets Scott [ph] – Decade Capital

Good day, ladies and gentlemen, and welcome to the third quarter 2010 NiSource earnings conference call. My name is Tijuana, and I will be your coordinator for today. (Operator instructions) I would now like to turn the conference over to Mr. Glen Kettering, Senior Vice President of Corporate Affairs. You may proceed.

Thank you and good morning. On behalf of NiSource, I’d like to welcome you to our quarterly analyst call. Joining me this morning are Bob Skaggs, President and Chief Executive Officer; Steve Smith, Executive Vice President and Chief Financial Officer; and Randy Hulen, Managing Director of Investor Relations. As you know the focus of today’s call is to review our financial performance for the third quarter of 2010 and provide a business update. We will then open the call to your questions. At times during the call, we will refer to the supplemental slides available on our website at NiSource.com. I’d like to remind you that some of the statements made on this conference call will be forward-looking statements. 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 MDNA and risk factors sections of our periodic SEC filings. And now I’d like to turn the call over to Bob Skaggs.

Thanks Glen, and good morning, and thanks for joining us. Today, we will cover several key points before opening the line to your questions. First, I will touch on the team’s strong performance thus far in 2010, which has enabled us to increase our full-year earnings outlook for 2010. I will also speak to our third quarter results, which very closely in line with our business plan, and finally, I will highlight several areas, where our team continues to execute our plan to build shareholder value and long-term investment driven earnings growth. So first, let us turn to our 2010 non-GAAP earnings guidance. If you recall that at the beginning of 2010, we provided net operating earnings guidance of $1.10 to $1.20 per share, the midpoint of which represented about 7% growth from our 2009 earnings level. We are pleased to announce that we now anticipate full-year net operating earnings to fall within a range of $1.20 to $1.25 per share, again non-GAAP. This improved earnings outlook reflects the core strength of our team’s 2010 performance, as well as continued signs of resilience in some of our key markets. I am confident the team will deliver on our updated outlook by executing on our business strategy, meeting the needs of our customers and enhancing shareholder value through long-term infrastructure investment driven growth. As noted in today’s news release, we also remain strongly committed to growing annual earnings by 3% to 5% on a long term, sustainable basis. To that point, during the third quarter we significantly improved our flexibility to fund our deep inventory of infrastructure investment opportunities by successfully executing $400 million common stock equity offering. The offering was fully subscribed under favorable pricing plans, and aligned very nicely with our infrastructure investment profile. Notably, we are now in a position to fund our capital investment opportunities at the run rate level of about $1 billion annually. As I have noted in the past, we expect that in some years our CapEx level will be more than $1 billion, and in some it may be less. But the key takeaway is that we are now poised to spend at our optimal investment level on a year in and year out basis, fundamental breakthrough for the team as well as for all of our stakeholders. And on that note, throughout this process, we have remained mindful of our (inaudible) of stakeholders’ commitments. One, to create long-term shareholder value; two, to maintain and eventually grow our dividend; and three, to preserve our investment grade credit rating. Our equity offering meets these key criteria, and positions NiSource to sustainably grow long-term earnings at the upper end of our corrected range. As we have discussed, we do have opportunities to grow at a higher rate over the next couple of years as we establish a new baseline earnings level in 2012 as a result of executing on our Indiana regulatory strategy. Finally, I can’t leave this subject without expressing our deep appreciation to all of NiSource’s financial stakeholders for your support as we’ve traveled the long and sometimes bumpy road to strengthening the company’s financial profile, and enhancing our investment capabilities. I can assure you that the entire team is as focused and energized as ever as we move forward and continue to build long-term sustainable growth. Now let’s turn to our third quarter results, and the supplemental slides that are available on NiSource.com. On slide 3, you can see that we delivered third quarter net operating earnings non-GAAP of about $10 million, or $0.04 per share, compared to $0.07 per share last year. Operating earnings for the quarter were about $110 million, compared to about $135 million for the same period last year. As mentioned in our release, the third-quarter numbers reflect a slight decrease from our 2009 results due to anticipated increases in certain operating expenses, as well as taxes and depreciation. Turning to slide five, let us look at our business unit results. Our Gas Distribution group, as anticipated, experienced an operating earnings loss for the current quarter of about $41 million compared to a loss of $30 million during the same period in 2009. Net revenues for the quarter were up about $9 million, excluding trackers, primarily due to ongoing regulatory initiatives and infrastructure investments, as well as the effect of rate increases at a number of our utilities. Increased revenues were offset by higher operating expenses of $19 million, including higher pension expenses, due to the recording of a catch-up in pension deferrals during the third quarter of 2009 at Columbia Gas of Ohio, as well as other employee and administration costs. On the investment front, our gas distribution teams continue to pursue aggressive long-term infrastructure enhancement and replacement programs, as well as a complementary agenda of revenue producing regulatory and commercial initiatives. On the regulatory front, in August we received approval from the Pennsylvania Public Utility Commission for a settlement of Columbia Gas of Pennsylvania base rate case with new rates effective on October 1. That settlement positions the company to increase base revenues, while providing a suite of new customer programs. Meanwhile, our $13 million Columbia Gas of Virginia rate case also is moving forward with hearing scheduled for November, and new rates anticipated to be in effect January 1, 2011. And lastly I would note that we anticipate approval in the fourth quarter of Northern Indiana Public Service Company's unanimous gas rate case settlement. The NIPSCO’s settlement, which was filed with the Indiana Utility Regulatory Commission, IURC, in late August. It holds the line on residential customer rates, while providing for increased earnings for the company. We expect a favorable IURC order and new rates to take effect within a matter of weeks. Just to recap, our gas distribution teams continue to deliver solid results on our straight forward infrastructure investment driven business strategy. Let us now take a look at our NiSource’s Gas Transmission & Storage business unit highlighted on slide 6. Here the team’s focus continues to be on market driven growth projects with particular emphasis on our extensive opportunities in the Marcellus Shale region. From an earnings standpoint, the NGT&S generated operating earnings of about $76 million in the third quarter, compared to $100 million in 2009. Net revenues were down about $8 million due to lower short-term transportation and storage services, which is being impacted by the extreme lack of price volatility in the market, as well as reduced mineral rights leasing revenues in light of some fairly significant upfront payments last year. Operating expenses were up about $14 due to planned expenditures for pipeline integrity management, as well as certain employee and administrative costs. From a growth standpoint, which we targeted 4% to 6% for the NGT&S business unit, the team is continuing to develop its inventory of infrastructure investment projects, ranging from traditional transportation and storage services to supply aggregation in other Marcellus production related projects. This quarter marked several milestones for this strategy, the result of which will be reflected in our earnings going forward. In September, we commence services on our keystone Majorsville expansion, developed jointly with MarkWest Liberty Midstream & Resources. This project which came in on time and on budget is the first integrated web gathering and processing system serving Marcellus production in northern West Virginia. The expansion, reflecting an investment of approximately $80 million, is fully contracted and delivers more than 325,000 Dth/d of Marcellus production to a new MarkWest processing plant. Also in the third quarter, we announced a partnership with UGI Energy Services to develop a new natural gas pipeline providing improved market access to Marcellus Shale producers in Pennsylvania. The project, currently in the development stage, could provide as much as 500,000 Dth/d of additional transportation capacity for production in north-central Pennsylvania and southern New York. We are excited about this project and pleased to be working with such a fine company as UGI in developing the opportunity. The NGT&S team also is moving forward several additional Marcellus area projects designed to move this growing supply source to downstream market centers and other points of liquidity. Among the projects being worked by the team are the Line WB Expansion, expect to be completed in January of 2011; and the Clendenin Project, targeted to be in service by the second quarter of 2011. And one additional NGT&S note, just yesterday Columbia Gulf Transmission, which represents about 15% of our pipeline in storage business mix, filed a base rate case with the Federal Energy Regulatory Commission, its first in more than 14 years. The filing proposes an annual increase of about $50 million, reflecting updated reliability investments, integrity management and other costs, as well as current operating conditions. We anticipate new rates to be in effect subject to refund in mid-2011. I would note that earlier this year, we were pursuing a number of creative ideas for Columbia Gulf, such as an incentive fixed fuel arrangement that had they been implemented would have eliminated the need for a general rate filing. Because we were unable to implement those arrangements on acceptable terms, we took a hard look at our numbers, and decided to proceed with this Gulf rate case. In summary, the NGT&S team continues to execute on its strategy of maximizing the value of its current asset base, and making disciplined investments in customer driven, value creating infrastructure projects. Let us now turn to NiSource’s electric business unit on slide 7. At NIPSCO, we have seen significant progress on our core regulatory agenda, as well as continued material improvement in reliability, responsiveness and customer service. From a financial standpoint, NIPSCO electric reported third-quarter operating earnings of $80 million, an increase of about $10 million over the same period in 2009. NIPSCO saw an increase in industrial margins, in addition to an increase in off-system sales that helped drive a net revenue increase of about $17 million. Operating expenses increased about $7 million above last year’s levels due primarily to anticipated increases in employee and administration costs, taxes and electric generation costs. On the operations front, I note that NIPSCO generation fleet set an all-time total generation record during August with 1.7 million megawatt hours, a great testament to the NIPSCO team’s progress in improving the raw [ph] ability and efficiency of our generating assets. Moving to our regulatory agenda, the third quarter marked a milestone in NIPSCO’s 2008 electric rate case, as we received an order from the IURC on August 25. The order which is subject to rehearing in an appeals process is solidly in line with our expectations, and sets the stage for restoring NIPSCO’s electric earnings to an appropriate level by 2012. As we have discussed over the last year, NIPSCO is in the process of developing a follow up electric rate case scheduled to be filed in the fourth quarter of this year. That filing is intended to address items that have changed since the company’s 2008 rate filing, including changes in customer usage and operating conditions, and efforts to enhance customer programs and rate design. The core objective of the second-rate case is to restore NIPSCO electric’s earnings to an appropriate level, and do so in a manner that is responsive to the interests of its customers and other key stakeholders. I would note that we’re actively engaged with various stakeholder groups in discussions that could lead to a settlement of the first electric rate case, and it is conceivable and I would underscore the word conceivable that such an arrangement could even obviate the need to file a second case this year. Although it is too early to tell if a settlement will be achievable, and if so what the precise contours and timing might be, I can tell you that Jimmy Staton and his team are actively engaged in a constructive dialogue with NIPSCO’s key regulatory stakeholders, and are determined to resolve these cases in a manner that is responsive to the needs of all parties. So as they say [ph], stay tuned. Parenthetically, and perhaps anticipating your question a bit, I would note that although there have been some recent high-profile leadership changes at the IURC, we don’t expect they will have an adverse affect on our ability to execute NIPSCO’s regulatory agenda in Indiana. As many of you know, Indiana has a long-standing reputation for balanced and thoughtful regulatory policies and practices, and we see no signs to suggest that will change going forward. Before moving on, it is clear that our Indiana team continues to build momentum. They are delivering solid and materially improved business and operational results, while demonstrating the value of constructive and positive engagements with key stakeholders. Bottom line, I am confident we can restore NIPSCO’s earnings to an appropriate sustainable level, while also continuing to invest in a reliable and efficient energy infrastructure that is vital to Indiana’s long-term success. To wrap up with slide 8, several observations, first, as we sprint to the end of the year, I’m confident the team will deliver on today’s increased earnings outlook for 2010 and build on that performance in 2011. Second, our successful equity offering aligns with and provides fundamental support for our business plan going forward, and positions NiSource to fund the deep inventory, attractive infrastructure investment opportunities available at each of our business units. I can assure you that our investment approach will remain disciplined and straightforward focused on meeting our customer needs, while building long-term value for our shareholders. Third, as always, we remain committed to communicating with our stakeholders in a transparent and timely manner regarding these and all of our efforts. Ongoing updates will be provided through our analyst calls and new releases posted on NiSource.com. Thank you for your participation today. Thank you for your continued interest and support of NiSource. With that Tijuana, I would open the call to questions.

Thank you. (Operator instructions) Your first question comes from the line of Xin Liu with JPMorgan. Please proceed. Xin Liu – JPMorgan: Good morning everyone.

Good morning.

Good morning. Xin Liu – JPMorgan: I just want to get more color on your operating expenses, for example, in your gas distribution segment, the 19 million increase, how much is due to the pension there, how much is due to other costs?

Yes, hi, this is Steve. About $10 million of that 19 million is due to pension, and the balance is due to other factors.

I would just mention again that pension for the most part reflects a catch-up that was recorded in 2009, but really benefited 2009 results. Xin Liu – JPMorgan: Do you expect that to continue in the next quarter?

No.

No, really again it reflects that last year was benefited by an extraordinary reduction in pension expense. You might recall that Columbia of Ohio had a rate ruling, a rate provision that allowed to defer pension expenses. So in the third quarter of last year, they really deferred nine months worth of pension expense. Xin Liu – JPMorgan: Okay.

That helped when you do the comparison that makes 2010 look lumpy. Xin Liu – JPMorgan: And for the balance of the increase, what drove that?

Well, you had various employee and administrative costs that was about $7 million of the $19 million, and then the balance was higher taxes and other, which was driven primarily by higher property taxes and increased depreciation. Xin Liu – JPMorgan: Okay.

Those three items primarily drove the $19 million, the pension, the employee and admin cost, and then higher taxes, other and depreciation.

And I would say, just as a general statement that we don’t consider any of these increases to be a systemic problem. There are consistent with plan. They reflect our ongoing operations. Xin Liu – JPMorgan: Okay. And on pension, another question given you may have a lower [ph] rate, what would the impact be on next year for your pension expense?

Well, as we look through the balance of the year, primarily where we are today is about 80% funded. Our return on assets has been what we had anticipated and protected it would be based on our assumptions. You are right to point out that the discount rate has dropped from year-end 2009, but again I would point out that what really matters is where the discount rate is at the end of the year. And as the discount rate moves around, if it is lower at the end of the year, it will drive a higher liability, if it is higher it will drive a lower liability. So we won’t know exactly where we end up. We have to wait until the end of the year before we can run all the analyses to figure out where our pension expense will be for 2011, and where our cash funding will be for 2011. But I will point out and emphasize that based on where we are relative to our asset performance, it is in line with our expectations. Xin Liu – JPMorgan: Okay, great. Thanks.

Thank you.

And your next question comes from the line of Theresa Kim [ph] with Gideon [ph]. Theresa Kim – Gideon: Good morning.

Good morning. Theresa Kim – Gideon: I just want to make sure I understand what you said in your formal comments that you are on talks on the 2008 case, and that is conceivable that it would obviate the need to file a case this year, so can you just elaborate further, does that mean you would not file a – I guess, a rate case at all, or just file a case this year, but you would file next year?

The base game plan is to file a NIPSCO electric rate case two during the fourth quarter. That is the base plan. Theresa Kim – Gideon: Okay.

However, we are in discussions with the stakeholders around rate case one. Those discussions are global in nature, and could encompass a resolution that might eliminate the need to file that second rate case. And again, I would use caution in my formal remarks, I would use caution, if I speak with you and others that these discussions are ongoing. They are fluid, they are touching on many issues, and they may or may not be successful. So, again, the game plan is to file that second-rate case ASAP during the fourth quarter. Theresa Kim – Gideon: Okay. Thank you very much.

Yes.

And your next question comes from the line of Carl Kirst with BMO Capital Markets. Please proceed. Carl Kirst – BMO Capital Markets: Thanks.

Hi Carl.

Hi Carl. Carl Kirst – BMO Capital Markets: Just a couple of questions, maybe first on Columbia Gulf, Bob you said you guys just filed yesterday, understanding it is up to 50 million, you mentioned a host of things. You know, should we look at and I’m looking at this in context with the third quarter, where it looked like IT volumes were down. Is that the operating conditions you were referring to, and I guess I’m trying to get a better sense of is it really, is that what is driving it or is it more the investment and cost side?

It is all the above Carl. It is the cost in the investment side, but it also certainly involves volumes and changes in the way this system is being used. So you read it correctly. Carl Kirst – BMO Capital Markets: And if I could, with respect to your comments made about not really being able to kind of get on the same page with respect to the incentive fuel cost, should we expect then this to be fully litigated, and I am curious what ROE you guys used in the pipeline rate filings?

Yes, we requested 13.5 on ROE, and your question about is this going to be fully litigated or can we resolve it through a settlement. You know our philosophy, we attempt to settle most of our rate proceedings. We are certainly going to give this a good, good shot. I think this case is straightforward. It doesn’t have a lot of moving parts. My anticipation is that we will be able to resolve this case via settlement. Carl Kirst – BMO Capital Markets: Okay. I appreciate that, and then last question if I could is really more of a much bigger picture, and at the risk of not wanting to getting into detail for next year, I will see if I can sort of as it vague enough, you know, but with the potential IRUC settlement of NIPSCO gas, obviously that brings in all else being equal a fairly nice EPS pick up anyway from the depreciation front, and as I look around, obviously it is going to be dependent upon the NIPSCO outcome, but we do have some other positive things going on in the LDC world, and so what I’m wondering is maybe is we are looking at now this year in 2010 at a $1.20 to $1.25, are there major headwinds that we should be focusing on at this point for 2011 that might eat into some of these gains for instance?

Yes. Carl Kirst – BMO Capital Markets: I don’t want you to get too far out of your skis, but you understand where I am coming from just want to make sure that we are looking at it correctly?

No, more than happy to just touch on sensitivities for 2011 without getting into a outlook, earnings outlook discussion. But certainly the economy will continue to be a key sensitivity throughout the market area, but in particular in Indiana, Northwest Indiana. We do have some sensitivity around the Columbia Gulf rate case. We also have sensitivities around our optimization business, both at pipeline and at gas distribution, although we don’t rely on that business, it is a big earnings generator. At the margin it does play a role. And then just the ongoing issues around NIPSCO electric, can we provide additional clarity on that, can we firm up ’11 and ’12. Those are the key sensitivities that would hit my top four, top. Carl Kirst – BMO Capital Markets: Okay. But – and I appreciate all of that, but within there, there is nothing of that necessarily you are looking at where you sit today that you say, wow, this factor right here looks like it is really going south, for instance, in 2011. The economy, knock on wood, perhaps is stabilizing et cetera, et cetera.

I would agree with your observation. Carl Kirst – BMO Capital Markets: Okay. Thanks guys.

Thank you.

(Operator instructions) Your next question comes from the line of Paul Ridzon with KeyBanc. Please proceed. Paul Ridzon – KeyBanc Capital Markets: Good morning, and I apologize if you touched on this. I had to join late, but is there some noise around Duke and the commission and just wondering how you view that as a threat, or potential threat?

Yes, during my comments Paul, I made the observation that we believe that the commission has resumed business that they are operating in the normal course, they have issued several very balanced orders in our proceedings. We expect them to act on the NIPSCO as settlement within a matter of weeks. And we believe that under the leadership of Chairman Atterholt the commission will continue to be balanced, constructive, and continue to process cases in a timely manner. Paul Ridzon – KeyBanc Capital Markets: What is your experience with the new chair?

We know that – the new chair, obviously he hasn’t been in the chair but several weeks. But we have experienced with him a state legislator in Indiana, as the lead at the department of insurance in Indiana. His reputation and his work has again been very balanced, thoughtful and constructive. So we hold him in high regard and believe that he is going to operate the commission in that manner. Again, all indications are that they are working hard in processing cases, and ensuring the commission is working. Paul Ridzon – KeyBanc Capital Markets: Okay. Thank you very much.

Yes.

Thanks Paul.

And your next question comes from the line of Sameer Sapna [ph] with Decade Capital [ph]. Please proceed. Scott – Decade Capital: Hi, good morning. Actually, it is Scott [ph]. Sorry about that.

Hi Scott. You were disguised there for a moment. Scott – Decade Capital: Well, there is like 13 calls going on today. So…

Yes, I know it is busy a few days. Scott – Decade Capital: So, I just – I don’t know if you guys mentioned this already, or if that was in the release, just kind of wondering where you guys raised guidance, I think the weather normalized if I am correct. So, just kind of why the raise in the guidance? That is all.

Yes, it has just been the ongoing solid performance of all of business units. They have been on top of their plan. They have not exceeded for the first nine months. At this point, we just have strong confidence that they are going to be in the $1.00 to $1.25, and you are correct, we do weather normalized. Scott – Decade Capital: Okay, great. Thanks a lot.

Thank you.

And with no further questions in queue, I would now like to turn the conference over to Mr. Bob Skaggs for closing remarks.

Well, again thanks everyone for your participation this morning, and your interest, and we will talk to you as developments unfold. Thank you.

Thank you for joining today’s conference. That concludes the presentation. You may now disconnect and have a great day.