Merrillville-based NiSource Inc. (NYSE: NI) is reporting net income of $48.1 million for the third quarter of 2013, compared to $19.3 million for the same period the previous year. The company says it will continue to move forward on a $2 billion capital investment effort focusing on infrastructure replacement and modernization.

October 31, 2013

News Release

Merrillville, Ind. — NiSource Inc. (NYSE: NI) today announced net operating earnings from continuing operations (non-GAAP) of $57.1 million, or $0.18 per share, for the three months ended September 30, 2013, compared with $12.2 million, or $0.04 per share for the third quarter of 2012. Operating earnings for the third quarter of 2013 (non-GAAP) were $183.7 million compared to $124.2 million in 2012.

On a GAAP basis, NiSource reported income from continuing operations for the three months ended September 30, 2013, of $49.5 million, or $0.16 per share, compared with $16.6 million, or $0.05 per share, in the same period a year ago. Operating income was $176.4 million for the third quarter of 2013, compared with $131.5 million in the year-ago period. Schedules 1 and 2 of this news release contain a reconciliation of net operating earnings and operating earnings to GAAP.

NiSource's results for 2013 reflect the company's $340 million forward sale equity issuance completed on September 10, 2012, which added approximately 24 million common shares outstanding. NiSource's third quarter 2012 results reflect the costs associated with Columbia Gas Transmission's comprehensive infrastructure modernization settlement with customers.

“As demonstrated by our results to date in 2013, we continue to generate sustainable shareholder and customer value through our team's consistent execution of NiSource's expansive, infrastructure-focused investment and growth strategy,” President and Chief Executive Officer Robert C. Skaggs, Jr. said. “This focus on execution has placed us in a solid position to deliver net operating earnings squarely within our guidance range of $1.50 to $1.60 per share for the year (non-GAAP).”

Skaggs noted that NiSource's operating units are delivering on an enhanced capital investment program totaling approximately $2 billion in 2013. NiSource continues to focus those investments on earnings-accretive infrastructure replacement and modernization programs.

Modernization programs on track; continued progress on midstream projects

NiSource's Columbia Pipeline Group (CPG) continues to make steady progress on its long-term infrastructure modernization program, as well as a series of midstream and core growth initiatives tied to NiSource's strong asset position in the Utica and Marcellus Shale production regions.

•Columbia Gas Transmission is on track to complete the first year of investments under its system modernization settlement, which became effective earlier this year. As provided in the settlement, the company will make a tracker filing reflecting first-year investments of approximately $300 million with the Federal Energy Regulatory Commission (FERC) by the end of this year. Recovery of 2013 program investments is anticipated to begin in February 2014. The modernization settlement covers the initial five years of a 10-15 year program totaling $4-5 billion.

•On September 30, 2013, Pennant Midstream, LLC announced the construction of an approximately $60 million, 38-mile natural gas liquids pipeline in eastern Ohio. The line will connect the Hickory Bend Cryogenic Processing Plant in New Middletown, Ohio, to the UEO Kensington facility near Kensington in Columbiana County. Initial capacity is expected to deliver up to approximately 90,000 barrels a day, starting in the third quarter of 2014. NiSource Midstream Services, LLC operates Pennant Midstream, which is jointly owned by Harvest Pipeline (an affiliate of Hilcorp Energy Company) and NiSource Midstream. NiSource owns a 50 percent interest in Pennant and is responsible for the same portion of the investment.

•Pennant Midstream's Hickory Bend Project remains on schedule, with the majority of the facilities to be operational by the end of this year. The $320 million project involves the construction of approximately 55 miles of 20- and 24-inch gathering pipeline facilities with an initial capacity of 600 million cubic feet per day, and a cryogenic natural gas liquids processing plant with an initial capacity of 200 million cubic feet per day.

•Millennium Pipeline is on track with development of an approximately $45 million new compressor facility in Delaware County, New York. The project, which will increase the pipeline's delivery capacity to 850,000 dekatherms per day, is expected to be in service by April 1, 2014. NiSource owns a 47.5 percent interest in Millennium and is responsible for the same percentage of the investment.

•CPG's core marketing projects include more than $550 million of investments, including the West Side Expansion Project, the East Side Expansion Project and the Warren County Project, among others, remain on track and will add more than 1 billion cubic feet of capacity when completed over the next two years.

“Our CPG team is delivering on all fronts; from the systematic modernization of our core system to customer and stakeholder-focused development of new midstream and market-driven growth initiatives,” Skaggs said. “These efforts are strengthening the services we provide to our customers, assuring the continued reliability of our system and providing a much-needed foundation for the ongoing development of shale energy supplies.”

NIPSCO files long-term gas system investment plan; executes on major environmental, transmission projects

During the third quarter, Northern Indiana Public Service Company (NIPSCO) continued to advance an agenda of customer service, reliability and long-term growth and modernization initiatives.

•In line with legislation passed earlier this year to support a variety of long-term infrastructure investments, NIPSCO filed a seven-year natural gas infrastructure modernization and expansion plan with the Indiana Utility Regulatory Commission (IURC) on October 3, 2013. The legislation provides for the timely recovery of related investments through deferrals and tracking mechanisms. The natural gas plan outlines a program of qualifying system modernization projects, with anticipated investment opportunities of approximately $700 million. NIPSCO's seven-year electric infrastructure modernization plan, filed in July with outlined investments of approximately $1 billion, remains under review by the IURC. The company anticipates making its initial electric and natural gas investments in early-to-mid 2014.

•NIPSCO extended its 2010 natural gas customer rate settlement through 2020 following the August 28 IURC approval of an agreement reached earlier this year with the Indiana Office of Utility Consumer Counselor and other key customer stakeholders.

•Work continues on NIPSCO's two electric transmission projects in northern Indiana, which support new jobs, enhance system reliability and offer environmental benefits. For the first project, called Reynolds-Topeka, NIPSCO recently selected the route and is in discussions with landowners and communities along the line's path. Together the projects will involve an investment by NIPSCO of approximately $500 million.

•NIPSCO also is executing on an approximately $250 million flue gas desulfurization (FGD) project at NIPSCO's Michigan City generating station. The project, scheduled for completion by the end of 2015, follows the approximately $500 million FGD project at NIPSCO's Schahfer generating station, which will be placed into service in the fourth quarter of this year and in late 2014. All FGD projects remain on schedule and are on budget.

•Also on the environmental front, on October 10, 2013, the IURC issued an order approving NIPSCO's capital projects and associated cost recovery f

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