Merrillville-based NiSource Inc. (NYSE: NI) is reporting first quarter net income of $266 million, compared to $260.5 million during the same period the previous year. Chief Executive Officer Robert Skaggs says the company's focus on improving infrastructure is continuing to pay off. April 30, 2014

News Release

MERRILLVILLE, Ind. – NiSource Inc. (NYSE: NI) today announced net operating earnings from continuing operations (non-GAAP) of $258.4 million, or $0.82 per share, for the three months ended March 31, 2014, compared with $215.3 million, or $0.69 per share, for the same period in 2013. Operating earnings for the first quarter (non-GAAP) were $509.1 million compared to $427.9 million in the year-ago period.

On a GAAP basis, NiSource reported income from continuing operations of $266.4 million, or $0.85 per share, for the three months ended March 31, 2014, compared with $216.0 million, or $0.69 per share in the same period in 2013. Operating income was $533.7 million for the first quarter of 2014, compared with $428.9 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.

“Our Team delivered another quarter of solid performance and steady execution on NiSource's expansive, infrastructure-focused investment strategy,” President and Chief Executive Officer Robert C. Skaggs, Jr. said. “Our utilities advanced key regulatory, legislative and long-term system enhancement programs, while our pipeline, storage and midstream business originated and executed on a robust inventory of growth and modernization projects. This continued focus on execution places us in a solid position to deliver net operating earnings in line with our guidance range of $1.61 to $1.71 per share for the year (non-GAAP).”

Columbia Pipeline Group continues execution on a growing number of infrastructure investments

NiSource's Columbia Pipeline Group (CPG) continues to make steady progress on its long-term infrastructure modernization programs, as well as its expanding inventory of midstream and core growth initiatives tied to the company's strong asset position in the Utica and Marcellus Shale production regions. CPG is on track to invest more than $800 million in 2014. Key year-to-date execution highlights for CPG include:

Columbia Gas Transmission (Columbia Transmission) is on track with the second year of its long-term system modernization program. Under the program, CPG will invest approximately $300 million annually in improvements to system reliability, safety and flexibility. A settlement with the company's customers addresses the initial five years of an expected 10-15 year program that exceeds $4 billion in investment.

NiSource Midstream executed a binding agreement for the approximately $120 million Washington County Gathering project. The project, anchored by a long-term agreement with a subsidiary of Range Resources Corporation, will consist of gathering pipelines and compression facilities to transport well-head production into a nearby Columbia Transmission pipeline. Construction is anticipated to begin in late 2014, with an in-service date during the second half of 2015.

Millennium Pipeline completed a new $40 million compressor facility in Delaware County, N.Y., which went into service in March. NiSource owns a 47.5 percent interest in Millennium.

CPG also remains on track with the execution of significant new supply- and market-driven growth projects, including the previously announced Warren County, West Side Expansion, Giles County and Line 1570 projects. These projects, which will provide total additional pipeline capacity of approximately 900 million cubic feet per day, are scheduled to be in service by the end of 2014. The approximately $275 million East Side project remains on budget and on schedule for completion in the third quarter of 2015.

CPG continued advanced discussions with customers following the positive open season results for its Rayne XPress and Leach XPress projects. Together these projects are expected to provide additional transportation capacity of about 1.5 billion cubic feet per day, offering enhanced market access for Marcellus and Utica production via the Columbia Transmission and Columbia Gulf Transmission systems.

Most recently, CPG completed a successful non-binding open season for its WB XPress project, which would involve the transportation of more than 1 billion cubic feet of Marcellus Shale production. Additional details on this project will be provided later this year.

“With an expanding mix of new and ongoing projects, as well as the systematic modernization of our core system, the CPG Team is strengthening the services we provide to our customers, assuring the continued reliability of our system and establishing the much-needed infrastructure for the ongoing development of shale energy supplies,” Skaggs said.

NIPSCO advances key environmental, system reliability and modernization investments

NiSource's Indiana natural gas and electric business, Northern Indiana Public Service Co. (NIPSCO), remained on track with a broad agenda of system modernization, reliability and environmental improvements. Key NIPSCO execution highlights include:

Two remaining flue gas desulfurization (FGD) projects at NIPSCO's coal-fired electric generating facilities remain on schedule and on budget. With projected completion dates of year-end 2014 and year-end 2015, the FGD investments are part of more than $850 million in environmental investments, including water quality and emission-control projects, recently completed and planned at NIPSCO's electric generating facilities.

NIPSCO also has initiated the first year of investments under the company's electric system modernization program, approved in February by the Indiana Utility Regulatory Commission (IURC). The $1.1 billion, seven-year program provides for the replacement and upgrade of underground circuits, transformers and poles, helping increase system reliability and deliver economic development benefits to the region. NIPSCO also has filed a complementary seven-year, $700 million natural gas modernization program, with a decision from the IURC expected as early as today.

Progress also continued on two major NIPSCO electric transmission projects designed to enhance system flexibility and reliability. The Reynolds-Topeka project, a 100-mile, 345-kilovolt line, remains on schedule with right-of-way acquisition in process. The Greentown-Reynolds project, a roughly 70-mile, 765-kilovolt line, is a joint project with Pioneer Transmission. Public outreach on the Greentown-Reynolds line continues, with the anticipated route selection, and subsequent right-of-way acquisition, beginning later this year. The projects involve an investment of approximately $500 million for NIPSCO and are anticipated to be in service by the end of 2018.

“With more than $6 billion in investments planned over the next decade, NIPSCO's infrastructure investment programs, as well as the company's continued focus on customer service and economic development, are on track to provide significant benefits to customers and communities across our northern Indiana service territory,” Skaggs said.

Gas distribution system modernization, regulatory and customer programs on track

The NiSource Gas Distribution (NGD) companies continue to execute against a long-term inventory of more than $10 billion in infrastructure replacement and enhancement opportunities, paired with the development of complementary customer programs and regulatory initiatives. Year-to-date NGD execution highlights include:

Following a record year of successfully implementing almost $800 million in gas distribution system replacement and modernization investments, NiSource's gas utilities are on track to invest approximately $815 million in system mod

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