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

Paul Ridzon - KeyBanc Carl Kirst - BMO Capital Faisel Khan - Citigroup James Dobson - Wunderlich Securities Jonathan Lefebvre - Wells Fargo Elvira Scotto - Credit Suisse Ben Sung - Luminus Management Paul Patterson - Glenrock Associates Josh Golden - JPMorgan Ashar Khan - Visium Asset Management Glen Kettering - SVP Corporate Affairs Bob Skaggs - President and CEO

Good day, ladies and gentlemen, and welcome to the fourth quarter 2010 NiSource earnings conference call. My name is [Danielle] and I will be your operator for today. At this time, all participants are in listen-only mode and later we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Glen Kettering, Senior Vice President of Corporate Affairs. Please 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 fourth quarter and full year of 2010 and to provide a business update. We'll 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 MD&A and Risk Factors sections of our periodic SEC filings. Now I'll turn the call over to Bob Skaggs.

Thanks, Glen. Good morning and thanks for joining us. Today we'll cover several key points before opening the line to your questions. First, I'll address NiSource's strong overall performance for 2010. As you can see, the team once again delivered financial results in line with our earnings guidance while taking significant steps towards meeting customer needs, creating shareholder value and generating long-term sustainable earnings growth. I'll also touch on the foundational actions taken during 2010 to strengthen NiSource's financial profile and enhance our ability to fund a wide array of attractive infrastructure modernization and growth investment opportunities. Finally, I'll outline our 2011 earnings guidance, which reflects our continued commitment to sustainable earnings growth and underscores the underlying strength of NiSource's core businesses in the markets that we serve. So first let's turn to our 2010 results. For the year, we continued to see positive customer benefits, enhanced shareholder value and sustainable earnings growth from NiSource's well-established infrastructure investment-driven strategy. During 2010, our team executed on a broad array of key regulatory and financial initiatives, infrastructure enhancement programs and new growth projects. These achievements, combined with improved margins and increased usage in our industrial electric markets, enabled us to deliver on our earnings commitments for the fourth consecutive year. For 2010, that means delivering earnings squarely in line with the increased non-GAAP range of the $1.20 to $1.25 per share that we provided when we reported earnings for the third quarter. Notably, we achieved these results while remaining responsive to the needs of our customers and other key stakeholders. On slide three of the supplemental slides, you can see that NiSource delivered 2010 net operating earnings, non-GAAP, of about $340 million, or $1.22 per share, compared to $1.07 per share last year, representing a 14% increase over 2009. Our earnings release and supplemental slides spell out the details regarding our improved 2010 results. But here are just a few highlights. We saw materially improved industrial margins and usage in our electric business, which helped boost operating earnings by more than $50 million over 2009. In addition, our gas distribution infrastructure enhancements and regulatory initiatives helped generate more than $50 million in [added] revenues. In our gas pipeline and storage business, the successful completion of growth projects helped increase demand marginal revenues by more than $20 million over 2009 despite the fact that a number of our projects were in service for only a portion of the year. These results reflect the core strength of our business plan, the focus of our team as well as continued signs of resilience in our key markets. Going forward, I'm convinced that NiSource's established infrastructure investment-driven strategy will continue to generate positive results for our company, our customers and our investors. We remain committed to this strategy and are focused on executing it in a disciplined, thoughtful manner. Turning to slide four, this slide highlights several key initiatives Steve Smith and our finance team completed during 2010. These efforts significantly strengthened our financial profile and positioned us to fund our compelling array of infrastructure investment opportunities. Most notably, in September, we completed a $400 million equity offering. This offering, which was structured as a forward sale arrangement aligns with and strongly supports our targeted annual capital investment level, which I'm pleased to note for 2011 is targeted at up to $1.1 billion. In addition, in December, we successfully tendered nearly $275 million in debt and concurrently executed a 30-year debt offering of $250 million. This will reduce our interest expense by about $10 million in 2011 and extends the maturity of our debt profile. Of course, we also remain true to our key financial commitments, to preserve our stable investment-grade credit rating and maintain our attractive secure dividend, all while delivering long-term earnings growth. With the successful completion of our equity offering and other key elements of our financial strategy, NiSource is well positioned to take advantage of the deep inventory of investment opportunities available across our business portfolio and continue growing our business and earnings on a sustainable basis. Before turning to our 2011 outlook, let me touch on just some of the key business unit accomplishments that played such a key role in advancing our business strategy. First and foremost, we continue to see solid progress in Indiana. Jimmy Staten and his NIPSCO team are taking significant steps to improve customer service and reliability while addressing a number of important regulatory matters. In November, NIPSCO filed a new electric rate case with the Indiana Utility Regulatory Commission, or IURC. While filed in November, the preparation and stakeholder outreach and engagement for the case began long before that. The result is a proposal that is balanced and responsive to both the needs of the company and our customers and other constituencies. We'll continue to engage with all stakeholders and expect the case to be completed during 2011. As we mentioned in today's release and have discussed in past updates, we expect to restore NIPSCO's earnings to a reasonable and appropriate level by the beginning of 2012. Also, in November, NIPSCO received IURC approval of the unanimous settlement of its 2010 natural gas rate case, the company's first in 20 years. The settlement resulted in an overall rate decrease for customers while enhancing the company's operating earnings. It also improved rate design and continued our strong support for low income assistance, energy efficiency and conservation. Last but not least, following IURC certificate approval at the end of December, NIPSCO is launching a major environmental upgrade at our Schahfer Generating Station, which will contribute to the company's earnings growth going forward. This is the first phase of a series of new environmental investments in Indiana, totaling about $600 million over the next six to eight years. These initiatives are fully in line with NIPSCO's New Source Review settlement with the EPA that we announced earlier this year. Turning to our NiSource gas transmission and storage business on slide seven, Chris Helms and his team are continuing to capitalize on NiSource's unparalleled geographic footprint to complete and advance customer-driven growth projects, primarily in the Marcellus Shale production area. During 2010, NGT&S put in service or nearly completed more than $150 million in strategic growth projects serving the Marcellus Shale production area. These projects provide market access for more than 500,000 dekatherms of natural gas daily. Our $80 million Majorsville series of projects serve as the cornerstone of an array of additional projects currently in process across the Marcellus play. Progress also continued on our Columbia Gulf transmission rate case before the Federal Energy Regulatory Commission. The filing seeks an increase in revenues of approximately $50 million per year reflecting updated costs and operating conditions. New rates go into affect, subject to refund, starting this May. As I noted earlier, growth project revenues were up by more than $20 million at NGT&S in 2010 and for projects such as Majorsville we've not yet experienced a full year's earnings run rate. Having said that, overall operating earnings for the year were down due to anticipated expense increases, pension and integrity management in particular and reduced short-term transportation revenue resulting from a lack of natural gas price volatility. Looking forward, we remain enthusiastic about NGT&S' earnings growth prospects for 2011 and beyond driven by accretive infrastructure investments, which we expect to amount to about $200 million annually. Turning to our third major business unit, NiSource Gas Distribution, or NGD, our NGD teams continued to execute on our strategy of combining long-term infrastructure replacement programs with complementary regulatory initiatives. Millions of customers are benefitting from this strategy, which includes significant revenue producing facility modernization programs at our largest utilities: Columbia Gas of Ohio, Columbia Gas of Pennsylvania and Columbia Gas of Massachusetts. In aggregate, these programs provide NGD with an investment opportunity approaching $4.5 billion over the next 20 to 25 years. On the regulatory front, in December, Columbia Gas of Virginia received approval from the Virginia State Corporation Commission of a unanimous settlement of its first-based rate case in 12 years. The settlement authorized a $5 million revenue increase as well as a number of rate design and other enhancements. The new rates took affect January 1. In mid-January, Columbia Gas of Pennsylvania files a new rate case with the Pennsylvania Public Utility Commission. That case seeks recovery of ongoing infrastructure investments, a modernized rate structure, as well as new senior citizen and energy efficiency programs. Filing seeks an annual revenue increase of about $38 million. Finally, I'd like to briefly outline our 2011 earnings guidance and key 2010 takeaways on Slide 8 before opening the line to your questions. Based on the continued success of our balanced business strategy and the extensive array of growth investment opportunities available across all of our businesses, we remain confident that NiSource will sustainably grow long-term earnings in the range of 3% to 5% annually. In fact, in the near term, particularly as we execute a number of regulatory initiatives, our operating earnings growth may well exceed that longer-term percentage range. With that in mind, we expect NiSource's 2011 net operating earnings to fall within a range of $1.25 to $1.35 per share. You should know this is a non-GAAP range. Consistent with last year's outlook, due to the unpredictability of weather and other factors, we're not providing GAAP earnings guidance. I'd also note that our 2011 guidance continues to be premised on a relatively modest and gradual economic recovery across the markets we serve. In closing, I'd like to acknowledge our team, our customers and our many business community partners for their support and engagement during the past year. We made significant progress on our business plan during 2010 all built on a foundation of ongoing investment across all of our companies. This core strategy remains unchanged for 2011 with the notable enhancement of our ability to invest in our businesses by the steps taken over the last years. 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. 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 news releases posted on nisource.com. Thank you for participating today and for your continued interest and support of NiSource. Now, [Danielle], let's open the call to questions.

(Operator Instructions). Your first question comes from the line of Paul Ridzon - KeyBanc. Paul Ridzon - KeyBanc: Your return assumptions that you outlined at your analyst day, particularly in Marcellus, any change there and what are you seeing as far as level of competition for projects?

Number one, on the returns, the returns are consistent with what we talked about in July at the investor day conference. There continues to be a considerable amount of competition throughout the Marcellus shale. We anticipate that that competition will continue. Having said that, Paul, our outlook, be it earnings, CapEx investment, is consistent with our take on the competition in the basin. Paul Ridzon - KeyBanc: In Ohio during the quarter, was there any impact from rate fee design or have we lapped that now?

Subject to check, we've lapped that, I believe. I think that it wound down during the third quarter give or take, Paul. But we'll check that and get back to you just to make sure that I'm correct. Paul Ridzon - KeyBanc: Any new thoughts on MLP or is that still on the back burner given the opportunities you have for further investment?

Yes, it's really the latter, Paul. It's on the back table. We continue to monitor the developments in that market very carefully, but, for us, on the back burner. Paul Ridzon - KeyBanc: Any other new thoughts strategically whether there's more value in the company as a whole or maybe in separate parts or are you thinking along those lines?

Well, we love this portfolio and we're fully committed to the standalone organic growth plan that we've outlined to you.

Your next question comes from the line of Carl Kirst - BMO Capital. Carl Kirst - BMO Capital: Bob, could you help give me some color with respect to where we are in the Indiana settlement with respect to -- if we're looking at, I guess, new rates, perhaps, being effective beginning of 2012, does that -- since the IURC is going to need approve that, does that suggest a settlement basically mid-year? Is that the effective timing?

Just one key, key, key point on context for this case, we filed rate case two under the Commission's expedited rules, processing guidelines and the Commission accepted that filing under those guidelines and, in fact, has established an expedited procedural schedule for the case, Paul, but would provide for a decision during the fourth quarter of 2011. So if this case was litigated, it would proceed along that schedule and we feel confident the Commission would render a decision during the fourth quarter which would enable us to put rates into affect at the beginning of 2012. Now, again, that's context. Our intent, our hope, our desire would be to try to settle this case. As I mention consistently, we put full core press during the first quarter, into the second quarter to attempt to settle this before the other parties have to put their witnesses on the stand and subject them to cross examination. So we're now in a window where we're engaging the parties. We're going to work diligently to try to settle this prior to mid year. Carl Kirst - BMO Capital: One other question off of that; the 2010 rate case was all about conservation and pension and, of course, a host of more thorny issues for the 2008 case. With this -- the motion to vacate and settlement discussions as it's ongoing right now, are most of the conversations with shippers on the 2010 issues or is it still looking at it more holistically, should we say?

More holistically in the sense that cost allocation is an issue that remains and we have attempted in rate case two to set a direction that would provide the parties an opportunity to compromise on cost allocation. But we believe that will continue to be the key challenge in resolving this case sooner rather than later. Then just let me add, Carl, that we continue to believe that the traditional cost service rate base sorts of issues are straightforward. Carl Kirst - BMO Capital: Then one last question, if I could -- so lots of moving parts as there always are. As we look to 2011 guidance and we look to segment, clearly LDC should be doing well given some of the depreciation changes that have happened at NIPSCO, NIPSCO gas. As we're looking at the pluses and minuses that are happening, like what happened to transportation even though we had some good demand charge addition, the O&M overwhelmed, at least for a little while. Should we still be expecting a possible slide on a net basis in pipelines for 2011 before perhaps kicking up into 2012? I just want to be on the lookout of if there's any particular unit that might, in fact, be sliding on an operating income basis.

We expect all three units to perform well. NGT&S, in particular, we expect a strong year. We have baked into the estimate a relatively conservative outlook on our optimization short-term transportation business at NGT&S, so we believe that hit is behind us. So, again, all three units, Carl, ought to be performing quite well in 2011. That's the expectation.

Your next question comes from the line of Faisel Khan - Citigroup. Faisel Khan - Citigroup: If I could just ask you a couple a questions, first on the operating expenses at Gas Transmission and Storage Operations, I know you guys talked about some of the headwinds you have there. So OpEx was up, I guess, about $32 million year over year. How is that going to trend into 2011? Should we now expect that since some of those maintenance activities are done that that number should trend down or is it going to be relatively flat?

We believe the core reliability in integrity management spends will be give or take flat year to year. We think some of the headwinds we had with pension expense at NGT&S -- and you'll recall that they're on a cash basis; they're not on an expense basis and that's because of FERC treatment of pension in their rights. So, again, we believe that that will flatten out as well. Faisel Khan - Citigroup: Then as these new projects come in 2011, like the West Virginia projects -- .

Majorsville. Faisel Khan - Citigroup: Majorsville -- how is that going to -- is that going to come through in the current rates or is there a negotiated rate that you have with those different counter parties?

It's the latter, typically speaking. Faisel Khan - Citigroup: On the electric utility, how did industrial volumes trend sequentially quarter to quarter? Did we see an improvement or were things relatively flat from third quarter to fourth quarter?

Third to fourth quarter was flattish, maybe down a hair, but typically flattish. Year to year, 2010 to 2009, they were up 10% and even more on the gas side of the business but the quarter to quarter, flat. Faisel Khan - Citigroup: Then as I look into your 2011 sources and uses of cash, does the sources of cash include the benefit from accelerated depreciation?

Yes, let me ask Steve to address that question.

The accelerated depreciation resulting from the legislation passed here recently, over the next couple of years, 2011, 2012, it's going to provide between $300 million and $400 million of benefit over the next several years, so it is a timing mechanism. You'll recall that in 2011 we get 100% bonus depreciation and in 2012 we get 50% bonus depreciation. So we've taken a rough estimate at what we believe bonus depreciation will provide to us in 2011 and that's in between $150 million and $200 million. That is reflected in the sources and uses statement for 2011. Faisel Khan - Citigroup: If that number happens to be higher, how will you -- will you adjust your equity [FIP] and forward sale programs?

It provides us enhanced flexibility, with which we're very pleased with. For guidance purposes, we're assuming that we would pull half of the forward sales down at the end of the third quarter in 2011. But it's something that we look at routinely. As I would point out again, it does provide us with a lot of additional flexibility.

Your next question comes from the line of James Dobson - Wunderlich Securities. James Dobson - Wunderlich Securities: Just to ask the question a little more specifically, MLP, does this make more sense, less sense? I think your last comment was "back burner."

Yes, it was. We're still watching the market very carefully. I think you may have heard me discuss before that the fit of an MLP given our circumstances is in question. That's something we continue [to debate]. Right now, frankly, we don't think it fits. Having said that, we're not ignoring the performance of the MLP. We believe that it can be an attractive and useful vehicle in certain circumstances. As our plan unfolds, we'll continue to keep it in mind. James Dobson - Wunderlich Securities: Second, to guidance, I assume in the $1.25 to $1.35 for '11 you're assuming a fully litigated outcome in Indiana such that there's no rate case impact in that range.

Probably [quibble the way] you worded the assumption, but we're not expecting any impact until 2012, calendar year 2012 but I would underscore the team's focus. The team's efforts are centered on attempting to resolve this proceeding by settlement. James Dobson - Wunderlich Securities: Then maybe to Steven on financing needs; I appreciate your comments on the forward settling half in third quarter of '11. What would that suggest debt needs are and, again, I guess, assuming you're 100% accurate on your estimates for accelerated depreciation of '11.

In terms of our need to access the debt capital markets in 2011, we don't necessarily need to do that to take care of everything that we need to take care of. However, I will point out that the markets appear to be in pretty good shape and we do have a maturity in 2012 of around $315 million. So we look at accessing the debt capital markets opportunistically and I would say we don't need to access them in 2011 but we want to maintain that option to the extent we like what we're seeing in the markets we may go ahead and take some of that 2012 maturity off the table. James Dobson - Wunderlich Securities: Then, Bob, back to you, on capital spending you used the term up to $1.1 billion. I certainly understand that circumstances dictate changes throughout a year. But maybe talk about how that $1.1 billion might change and, if you can, certainly for GT&S how the segment breakdown might start to look.

Yes, for 2011 as it stands today, we have about $160 million allocated to NGT&S for growth, primarily Marcellus growth and we could see that toggling upwards as opportunities materialize. So that would be the area of sensitivity, the area where we think we have upside on the spin. James Dobson - Wunderlich Securities: But you would say $1 billion is about the downside? Again, I'm not trying to pin you too much but -- .

Yes, we think we're firmly within that $1 billion to $1.1 billion window. Let me, James, just give you a little bit of additional color. Clearly, the Indiana Commission's approval of the scrubber program in Indiana has tripped a wire for us to begin work on that project, so we're going to accelerate some of that spinning to ensure that we get that scrubber in place and operational by the end of 2013. James Dobson - Wunderlich Securities: Lastly, Bob, on the economy, I think one of the last questioners was talking about 4Q versus 3Q, which was interesting rear view mirror stuff. But I'd love your sort of feel of what the economy's suggesting to you all right now for the balance of 2011 and particularly in Indiana where you're sitting but as well throughout the other territories.

Yes, we just believe it's going to be a slow, gradual recovery of the economy. We certainly observe with interest US Steel's recent announcement about market conditions. You may recall they said while they have a good, strong order book for Q1, they were squarely in the camp of believing that the economy was going to continue to be slow and the recovery was going to be measured. Obviously we listen to our big customers pretty carefully and, like them, we just believe it's going to be very, very gradual. That's what the estimate reflects. James Dobson - Wunderlich Securities: That'd be fairly consistent across going all the way up through Massachusetts but down all the way through Heartland, Pennsylvania, et cetera?

Yes, Ohio an PA, certainly we see those same sorts of conditions.

Your next question comes from the line of Jonathan Lefebvre - Wells Fargo. Jonathan Lefebvre - Wells Fargo: Just wanted to touch on the load uptick and the economic recovery that you were just mentioning and just wondering if maybe you can give us a sense for -- I know you have a lot of sensitivity to obviously the steel industry. Do you have any sense for the operating rates or utilization rates that they're running at now? How much further upside could we see? I'm just trying to help frame that up a bit.

Yes, our sense on steel production in our area is about 70% utilization, maybe a little bit north of that number. Again, US Steel indicates that they have a pretty good order book for Q1 and then it's pretty slow after that, so decent utilization rates in our area. Jonathan Lefebvre - Wells Fargo: Where have they averaged historically?

If you go back to 2008, 2009, they were pretty much flat out and then, of course -- I guess it was 2008 -- then it began declining probably as low as 50%, 60% utilization. Jonathan Lefebvre - Wells Fargo: Is there any way to think about how that might impact if we get back up towards the 80%, 90%, how that might impact earnings in NIPSCO?

Well, again, the key going forward is resolution of this new NIPSCO rate case. I mentioned cost allocation rate design. The impact of load growth will be determined by how those rates are designed. Jonathan Lefebvre - Wells Fargo: Then just switching gears onto the pipes, I noticed another decrease due to short-term transportation and storage. Just wondering if maybe you can help us understand which pipes are being impacted and how much has that been at its peak and where are we today on earnings for this interruptible service?

We call this business park and loan optimization and Columbia Gas Transmission is the primary pipe for that activity. Historically, the business has ranged from $15 million to $20 million annually to as high as $40 million annually. I alluded to 2009 in NGT&S we exceeded $40 million in revenue. But this market, this line of business, which is relatively small for us at the margin, is solely dependent on gas price volatility and, more particularly, [wood] seasonally spreads are -- that's how we capture the margin on this short-term park and loan activity. So 2009 we were at $40 million, 2010 that number dropped to $20 million, again, a function of price volatility. Going forward we baked into the forecast a more modest level. In or about $20 million is what the forecast reflects. Jonathan Lefebvre - Wells Fargo: Is that more of a seasonal spread or is that a basis spread?

It tends to be a seasonal spread.

Summer, winter spread.

Summer, winter spread, they park the gas in our storage and then withdraw in the winter when prices are higher. Jonathan Lefebvre - Wells Fargo: So when you were up to $40 million were we looking at a $2 type of spread and today we're looking at more of a $0.50 type spread?

Yes, it was $1.50 in certain cases and now it's below $0.50 in certain cases, exactly. Jonathan Lefebvre - Wells Fargo: Then just maybe a few housekeeping -- on the tax rate for next year, what should we be using for '11?

Approximately 36%. Jonathan Lefebvre - Wells Fargo: Then are you assuming any further debt tenders in '11?

Not at this time, no.

Your next question comes from the line of Elvira Scotto - Credit Suisse. Elvira Scotto - Credit Suisse: I wanted to follow up on the CapEx for 2011 and going forward. We have this $1.1 billion or up to $1.1 billion in 2011. Are we still thinking that a sustainable run rate going forward is $1 billion and then in some years you'll be higher and lower or are we thinking that maybe there's an uptick even in a sustainable rate going forward?

No, we still believe it's $1 billion is a representative number. But as you said better than I did, that it could tick up, it could tick down depending on conditions. One of the key sensitivities is can we deploy the way we believe we can deploy in the Marcellus region? Elvira Scotto - Credit Suisse: The follow up there, do you have any update on the [Penstar] project and what kind of interest you're seeing there?

[Penstar] team is actively marketing the project and so there are literally real-time discussions with a wide variety of key shippers. We expect that process to continue for the next 30 to 90 days. Elvira Scotto - Credit Suisse: If that moves forward, what was the in-service date? Was that about 2013?

Correct. We originally talked in terms of roughly 2012 but with the softening of gas prices we're now talking in terms of 2013, so you're spot on. Elvira Scotto - Credit Suisse: Then switching gears to -- could you talk a little bit about in the gas transmission, specifically on Columbia Gulf -- can you remind us what percent of contracts come up for renewal in 2011 and what you've baked into your outlook regarding just renewal rates?

Yes, on renewals we expect to have strong renewals this year. We, frankly, don't have much coming up in 2011. 2012, 2013 we have a bigger slug of renewals due. In fact, Columbia Gas of Ohio has a fairly significant contract position that's due for renewal in 2012, 2013. Right now the outlook assumes that we have no significant turn back. We have no significant reduction in rate levels. One thing I would point out, when you look at throughput, Columbia Gulf throughput has held up good during 2010. It was down during the first half, then recovered quite well. So that's number one. Then number two, we've had a couple of recent renewals that, again, would indicate that Columbia Gulf is going to be very competitive and we feel good about the position of that pipeline.

Your next question comes from the line of Ben Sung - Luminus Management. Ben Sung - Luminus Management: Is there much going on on the legislative front in Indiana?

It's an active session in the legislature. You may recall that current governor, Mitch Daniels, is in the final two years of office. This election cycle gave him not only a republican senate but a republican house. So he has an aggressive agenda lined up to complete his term as governor. We and other utilities have been discussing legislative proposals that would help, we believe, streamline and modernize IURC regulation. Those packages are still in the discussion phase and have not yet really garnered a lot of air time at the legislature at this point but we continue to work on that. Ben Sung - Luminus Management: Do you think that you'll -- do you think you'll have an idea of whether there's any legs to it or not by a certain point or some sort of continue throughout the year?

We're probably going to know whether it has legs or not within the next 90 days.

Your next question comes from the line of Paul Patterson - Glenrock Associates. Paul Patterson - Glenrock Associates: Just a follow-up on that Columbia Gulf question -- if I understood the answer, you're not really seeing much exposure with respect to contracts that are going to be expiring and renewal and rates. Am I getting that pretty -- ?

Yes, you do. You've got it. Now, one thing, again, though, I just want to highlight in 2012, 2013 we have one significant agreement with Columbia Gas of Ohio that needs to be dealt with. The reason I highlight that is it's a relatively sizeable agreement and you may know or recall that in Ohio we, like the other utilities, have moved to an open access auction process and questions around capacity and the like still need to be dealt with. So, again, that's more of a highlight. We don't feel alarmed about it. Again, we believe Columbia Gulf is in great competitive position. Paul Patterson - Glenrock Associates: How about the rest of the system? Is there any other contract or anything else we should be thinking about?

No. Columbia Gas Transmission, the big pipe, is completely sold out. We believe that status is going to continue. Paul Patterson - Glenrock Associates: So for the next several years it looks like we really don't have much exposure, unlike some of the other companies that are out there. Is that -- ?

That's exactly correct.

Your next question comes from the line of Josh Golden - JPMorgan. Josh Golden - JPMorgan: I've got a couple questions about liquidity. Can you address the revolver, the renewal, the size of it, potential cost increases, that you would be looking at through 2011?

We're in the process of renewing our facility and the size of it is going to be maintained at $1.5 billion. We're looking at a four-year renewal. You'll also be aware that the facility actually expires in July of 2011, so we are getting ahead of the curb here and anticipate that we'll have that new facility closed within the first quarter. Pricing has gone up. The old facility was in the LIBOR plus 50 to 60 basis point range. The new facility is in the LIBOR plus 200 basis point range. Josh Golden - JPMorgan: Let me ask a question about the size of the revolver. I understand the working capital needs that you have but right now you're [rougher] liquidity available is right around $400 million. Gas is relatively low at the current time. From a working capital standpoint, given your credit rating and the amount of debt that you have and the issues that took place back in 2009, has there been given any thought to increasing the size of the revolver?

No, I think we're in good shape at $1.5 billion of liquidity and I would just point out that we have moved to an auction arrangement for a percentage of the volumes in Ohio and so over the next two to three years we'll see probably a reduction for liquidity as a result of that transition. At this point, though, we feel that $1.5 billion is adequate and we want to maintain it there for the foreseeable future. We don't anticipate needing more liquidity than that.

Your next question comes from the line of Ashar Khan - Visium Asset Management. Ashar Khan - Visium Asset Management: Bob, can you just highlight what makes you go in the upper end of the range for '11 as we look through the year? I guess last year we saw you hiked up the range towards the end of the third quarter. What can happen throughout the year for you to be on the upper end of the range versus in the middle?

Yes, the economy would be the key driver to push up would be one. Two, we talked about park and loan optimization activity. So if seasonal spreads expanded materially -- and they would have to expand materially -- those two would be the key drivers that might push us in a positive fashion. Ashar Khan - Visium Asset Management: How would you define the economy? What have you put in your numbers for sales and how should we look at that?

Very similar to what is reflected in 2010 on the industrial side and very similar on the electric residential to what you saw in 2010 about a 1% growth there. Residential natural gas usage, which we've insulated for the most part, would be a reduction of about 1%. Ashar Khan - Visium Asset Management: So it's about a 1% draw out and then the gas it's a 1% reduction. Is that right?

Yes, but, again, on the gas side, you recall many of our LDCs have mitigated their loss through rate design. When you're running your model you have to take that into account, Ohio being a great example where they're at straight fixed variable rate design. Ashar Khan - Visium Asset Management: So anything above 1% growth, I guess that's a positive. How much is a 1% growth equal to in terms of earnings, can I just ask?

Again, don't -- I would suggest that you not shorthand it because I mentioned 1% growth on the residential side on the electric. [Commercial] is flat to slow growth and, again, the industrial is very slow. Ashar Khan - Visium Asset Management: But how much would the 1% increase be overall on the system? How much is it on an EPS basis?

Yes, it's not material. It wouldn't move the needle very much. Randy can get you a better number, a thumbnail sort of number, but it really wouldn't draw the earnings. What I would probably push you too, again, is park and loan activity and then if we saw a material increase in industrial volumes. Ashar Khan - Visium Asset Management: Then going back onto the gas case, like settlement, I guess the way the procedural schedule right now shows -- I guess there's an opportunity towards the end of the first quarter and then an opportunity in the beginning of the second quarter. Is that what we should be focusing towards?

Yes, just to clarify, the electric rate case two in Indiana, we believe the window is open now and would extend through most of the second quarter of this year. We say that because of the way the procedural schedule is established in Indiana that I mentioned.

Your next question comes from the line of Paul Ridzon - KeyBanc. Paul Ridzon - KeyBanc: What's the magnitude of the exposure in GT&S for the Ohio contract?

I think it's minimal. I think it's going to be manageable situation. We can get you a more exact number on the value of the entire contract and then you can make book around it. But, again, we believe that the capacity position is extremely valuable and if our Columbia Gas of Ohio subsidiary doesn't use it then the marketer supplying that -- participating in that program, supplying that market, will pick up the capacity.

That's a 2012.

2012 issue. But we can get you, Paul, the notional value of that agreement. Paul Ridzon - KeyBanc: When you laid out your $1 billion CapEx number, did you anticipate about $600 million of environmental in Indiana?

We anticipate $600 million over a six to eight-year period for the environmental. We did accelerate a bit of the environmental spin once. We received the certificate from the Indiana Commission but it really didn't move the needle dramatically. Paul Ridzon - KeyBanc: Then just because everyone was talking about pension three months ago, any changes to your actuarials?

Really the only change would be on the discount rate if that's what you're referring to and it reduced by about 50 basis points. But Steve can walk you through that real quickly.

Right, Paul, return on assets we're still assuming 8.75% for 2011 and beyond and our discount rate at year end was 5%. A year ago it was 5.54%, so the discount rate went down about 54 basis points. I would point out that the year was pretty good in 2010 and we were in the 13% to 14% return overall on our pension, so that helped. Paul Ridzon - KeyBanc: Then just because someone was very vocal about potential M&A on MSNBC, what approvals would be required in the event that something were to happen?

I have no idea. I have no idea. Obviously we operate in seven states on the gas distribution side and we have the FERC, so hard for me to hypothecate what approvals would be needed under any scenario. I know that when we went through the NiSource of Columbia transaction we probably had a handful of states and FERC to deal with. Just to remind you, we love our standalone, organic growth plan. We love these assets.

There are no more questions in the queue. I would now like to turn the call back over to Mr. Bob Skaggs for any closing remarks.

Thanks, [Danielle]. Again, we appreciate everyone's interest and support and we look forward to talking to you in the not too distant future. Have a good day. Be safe.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect and have a great day.