10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

or

¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 001-16189

NiSource Inc.

(Exact name of registrant as specified in its charter)

Delaware	35-2108964
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
801 East 86th Avenue     Merrillville, Indiana	46410
(Address of principal executive offices)	(Zip Code)

(877) 647-5990

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ    No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)

Yesþ    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer þ                    Accelerated filer ¨

Non-accelerated filer ¨                      Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨    No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Stock, $0.01 Par Value: 284,905,701 shares outstanding at July 25, 2012.

1

NISOURCE INC.

FORM 10-Q QUARTERLY REPORT

FOR THE QUARTER ENDED JUNE 30, 2012

Table of Contents

			Page
	Defined Terms			3
PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements - unaudited
		Condensed Statements of Consolidated Income (unaudited)		6
		Condensed Statements of Consolidated Comprehensive Income (unaudited)		7
		Condensed Consolidated Balance Sheets (unaudited)		8
		Condensed Statements of Consolidated Cash Flows (unaudited)		10
		Notes to Condensed Consolidated Financial Statements (unaudited)		11
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		46
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		72
	Item 4.	Controls and Procedures		72
PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings		73
	Item 1A.	Risk Factors		73
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		73
	Item 3.	Defaults Upon Senior Securities		73
	Item 4.	Mine Safety Disclosures		73
	Item 5.	Other Information		73
	Item 6.	Exhibits		74
	Signature			75

2

DEFINED TERMS

The following is a list of frequently used abbreviations or acronyms that are found in this report:

NiSource Subsidiaries and Affiliates
Capital Markets	NiSource Capital Markets, Inc.
CER	Columbia Energy Resources, Inc.
CGORC	Columbia Gas of Ohio Receivables Corporation
CNR	Columbia Natural Resources, Inc.
Columbia	Columbia Energy Group
Columbia Gulf	Columbia Gulf Transmission Company
Columbia of Kentucky	Columbia Gas of Kentucky, Inc.
Columbia of Maryland	Columbia Gas of Maryland, Inc.
Columbia of Massachusetts	Bay State Gas Company
Columbia of Ohio	Columbia Gas of Ohio, Inc.
Columbia of Pennsylvania	Columbia Gas of Pennsylvania, Inc.
Columbia of Virginia	Columbia Gas of Virginia, Inc.
Columbia Transmission	Columbia Gas Transmission, L.L.C.
CPRC	Columbia Gas of Pennsylvania Receivables Corporation
Crossroads Pipeline	Crossroads Pipeline Company
Granite State Gas	Granite State Gas Transmission, Inc.
Hardy Storage	Hardy Storage Company, L.L.C.
Kokomo Gas	Kokomo Gas and Fuel Company
Millennium	Millennium Pipeline Company, L.L.C.
NARC	NIPSCO Accounts Receivable Corporation
NDC Douglas Properties	NDC Douglas Properties, Inc.
NiSource	NiSource Inc.
NiSource Corporate Services	NiSource Corporate Services Company
NiSource Development Company	NiSource Development Company, Inc.
NiSource Finance	NiSource Finance Corp.
NiSource Midstream	NiSource Midstream & Minerals Group, L.L.C. and
	subsidiaries
Northern Indiana	Northern Indiana Public Service Company
Northern Indiana Fuel and Light	Northern Indiana Fuel and Light Company
PEI	PEI Holdings, Inc.
Whiting Clean Energy	Whiting Clean Energy, Inc.
Abbreviations
AFUDC	Allowance for funds used during construction
AMRP	Accelerated Main Replacement Program
AOC	Administrative Order by Consent
AOCI	Accumulated other comprehensive income
ARP	Alternative Regulatory Plan
ARRs	Auction Revenue Rights
ASC	Accounting Standards Codification
BBA	British Banker Association
Bcf	Billion cubic feet
Board	Board of Directors
BPAE	BP Alternative Energy North America Inc
BTMU	The Bank of Tokyo-Mitsubishi UFJ, LTD.
BTU	British Thermal Unit
CAA	Clean Air Act
CAIR	Clean Air Interstate Rule
CAMR	Clean Air Mercury Rule
Ccf	Hundred cubic feet
CERCLA	Comprehensive Environmental Response, Compensation and
	Liability Act (also known as Superfund)
CSAPR	Cross-State Air Pollution Rule

3

DEFINED TERMS (continued)

Day 2	Began April 1, 2005 and refers to the operational control of
	the energy markets by MISO, including the dispatching of
	wholesale electricity and generation, managing transmission
	constraints, and managing the day-ahead, real-time and
	financial transmission rights markets
DPU	Department of Public Utilities
DSM	Demand Side Management
Dth	Dekatherm
ECT	Environmental Cost Tracker
ECR	Environmental Cost Recovery
EPA	United States Environmental Protection Agency
EPS	Earnings per share
FAC	Fuel adjustment clause
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FGD	Flue Gas Desulfurization
FTRs	Financial Transmission Rights
GAAP	U.S. Generally Accepted Accounting Principles
GCR	Gas cost recovery
GHG	Greenhouse gases
gwh	Gigawatt hours
IDEM	Indiana Department of Environmental Management
IFRS	International Financial Reporting Standards
IRP	Infrastructure Replacement Program
IURC	Indiana Utility Regulatory Commission
LDCs	Local distribution companies
LIBOR	London InterBank Offered Rate
LIFO	Last in first out
Mcf	Million cubic feet
MGP	Manufactured Gas Plant
MISO	Midwest Independent Transmission System Operator
Mitchell	Dean H. Mitchell Coal Fired Generating Station
MMDth	Million dekatherms
mw	Megawatts
NAAQS	National Ambient Air Quality Standards
NOV	Notice of Violation
NO2	Nitrogen dioxide
NOx	Nitrogen oxide
NYMEX	New York Mercantile Exchange
OCI	Other Comprehensive Income (Loss)
OPEB	Other Postretirement and Postemployment Benefits
OUCC	Indiana Office of Utility Consumer Counselor
PADEP	Pennsylvania Department of Environmental Protection
Piedmont	Piedmont Natural Gas Company, Inc.
PJM	PJM Interconnection (a regional transmission organization
	(RTO) that coordinates the movement of wholesale electricity
	in all or parts of 13 states and the District of Columbia.)
PM	particulate matter
PSC	Public Service Commission
PUC	Public Utility Commission
PUCO	Public Utilities Commission of Ohio
RA	Resource Adequacy
RBS	Royal Bank of Scotland PLC
RCRA	Resource Conservation and Recovery Act
RDAF	revenue decoupling adjustment factor
RTO	Regional Transmission Organization
SEC	Securities and Exchange Commission
SIP	State Implementation Plan
SO2	Sulfur dioxide

4

DEFINED TERMS (continued)

TIRF	Targeted Infrastructure Reinvestment Factor
VaR	Value-at-risk and instrument sensitivity to market factors
VIE	Variable Interest Entities
VSCC	Virginia State Corporation Commission
WACOG	Weighted Average Cost of Gas

5

PART I

ITEM 1.  FINANCIAL STATEMENTS

NiSource Inc.

Condensed Statements of Consolidated Income (unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except per share amounts)	2012			2011			2012			2011
Net Revenues
Gas Distribution	$	282.6		$	500.4		$	1,156.3		$	1,872.4
Gas Transportation and Storage		356.2			307.3			765.4			710.3
Electric		377.1			349.2			729.7			695.7
Other		32.8			71.4			56.0			181.5
Gross Revenues		1,048.7			1,228.3			2,707.4			3,459.9
Cost of Sales (excluding depreciation and amortization)		241.1			462.5			871.4			1,633.4
Total Net Revenues		807.6			765.8			1,836.0			1,826.5
Operating Expenses
Operation and maintenance		394.3			400.3			799.7			829.6
Depreciation and amortization		148.0			134.5			294.1			268.8
Impairment and (gain)/loss on sale of assets, net		(1.5	)		-			(3.1	)		0.7
Other taxes		66.7			67.8			153.5			160.8
Total Operating Expenses		607.5			602.6			1,244.2			1,259.9
Equity Earnings in Unconsolidated Affiliates		8.5			2.3			16.2			5.3
Operating Income		208.6			165.5			608.0			571.9
Other Income (Deductions)
Interest expense, net		(103.2	)		(94.4	)		(206.5	)		(184.2	)
Other, net		2.8			0.6			3.1			3.9
Total Other Deductions		(100.4	)		(93.8	)		(203.4	)		(180.3	)
Income from Continuing Operations before Income Taxes		108.2			71.7			404.6			391.6
Income Taxes		37.7			30.9			140.6			141.7
Income from Continuing Operations		70.5			40.8			264.0			249.9
Loss from Discontinued Operations - net of taxes		(1.1	)		(0.6	)		(1.2	)		(0.2	)
Net Income	$	69.4		$	40.2		$	262.8		$	249.7
Basic Earnings Per Share
Continuing operations	$	0.25		$	0.14		$	0.93		$	0.89
Discontinued operations		-			-			-			-
Basic Earnings Per Share	$	0.25		$	0.14		$	0.93		$	0.89
Diluted Earnings Per Share
Continuing operations	$	0.23		$	0.14		$	0.89		$	0.87
Discontinued operations		-			-			-			-
Diluted Earnings Per Share	$	0.23		$	0.14		$	0.89		$	0.87
Dividends Declared Per Common Share	$	0.24		$	0.23		$	0.70		$	0.69
Basic Average Common Shares Outstanding		284.4			280.2			283.6			279.8
Diluted Average Common Shares		295.8			287.1			294.6			286.2

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

6

ITEM 1.  FINANCIAL STATEMENTS (continued)

NiSource Inc.

Condensed Statements of Consolidated Comprehensive Income (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, net of taxes)	2012		2011		2012			2011
Net Income	$	69.4	$	40.2	$	262.8		$	249.7
Other comprehensive income (loss)
Net unrealized gain (loss) on available-for-sale securities(1)		0.3		1.1		(2.5	)		0.9
Net unrealized gain on cash flow hedges(2)		0.9		0.6		1.9			1.7
Unrecognized pension benefit and OPEB costs(3)		0.7		0.4		1.3			0.8
Total other comprehensive income		1.9		2.1		0.7			3.4
Total Comprehensive Income	$	71.3	$	42.3	$	263.5		$	253.1

(1) Net unrealized gains (losses) on available-for-sale securities, net of $0.2 million and $0.7 million tax expense in the second quarter of 2012 and 2011, respectively, and $1.8 million tax benefit and $0.5 million tax expense for the first six months of 2012 and 2011, respectively.

(2) Net unrealized gains on derivatives qualifying as cash flow hedges, net of $0.6 million and $0.4 million tax expense in the second quarter of 2012 and 2011, respectively, and $1.2 million and $1.1 million tax expense for the first six months of 2012 and 2011, respectively. Net unrealized gains on cash flow hedges includes gains of $0.2 million related to the unrealized gains and losses of interest rate swaps held by NiSource’s unconsolidated equity method investments for the second quarter of 2012 and 2011. Net unrealized gains on cash flow hedges include gains of $0.5 million and $0.4 million related to the unrealized gains and losses of interest swaps held by NiSource’s unconsolidated equity method investments for the six months ended June 30, 2012 and 2011, respectively.

(3) Unrecognized pension benefit and OPEB costs, net of $0.3 million tax expense in the second quarter of 2012 and 2011, and $0.8 million and $0.7 million tax expense for the first six months of 2012 and 2011, respectively.

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

7

ITEM 1.  FINANCIAL STATEMENTS (continued)

NiSource Inc.

Condensed Consolidated Balance Sheets (unaudited)

(in millions)	June 30, 2012			December 31, 2011
ASSETS
Property, Plant and Equipment
Utility Plant	$	20,888.6		$	20,337.8
Accumulated depreciation and amortization		(8,882.8	)		(8,670.2	)
Net utility plant		12,005.8			11,667.6
Other property, at cost, less accumulated depreciation		143.2			132.5
Net Property, Plant and Equipment		12,149.0			11,800.1
Investments and Other Assets
Assets of discontinued operations and assets held for sale		0.2			0.2
Unconsolidated affiliates		211.5			204.7
Other investments		156.8			150.9
Total Investments and Other Assets		368.5			355.8
Current Assets
Cash and cash equivalents		52.8			11.5
Restricted cash		85.0			160.6
Accounts receivable (less reserve of $42.2 and $30.5, respectively)		553.3			854.8
Income tax receivable		0.7			0.9
Gas inventory		252.9			427.6
Underrecovered gas and fuel costs		1.9			20.7
Materials and supplies, at average cost		99.5			87.6
Electric production fuel, at average cost		75.7			50.9
Price risk management assets		120.0			137.2
Exchange gas receivable		42.7			64.9
Regulatory assets		192.9			169.7
Prepayments and other		274.2			261.8
Total Current Assets		1,751.6			2,248.2
Other Assets
Price risk management assets		90.3			188.7
Regulatory assets		1,899.2			1,978.2
Goodwill		3,677.3			3,677.3
Intangible assets		292.1			297.6
Postretirement and postemployment benefits assets		38.3			31.5
Deferred charges and other		143.1			130.9
Total Other Assets		6,140.3			6,304.2
Total Assets	$	20,409.4		$	20,708.3

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

8

ITEM 1.  FINANCIAL STATEMENTS (continued)

NiSource Inc.

Condensed Consolidated Balance Sheets (unaudited) (continued)

(in millions, except share amounts)	June 30, 2012			December 31, 2011
CAPITALIZATION AND LIABILITIES
Capitalization
Common Stockholders’ Equity
Common stock - $0.01 par value, 400,000,000 shares authorized; 284,767,362 and 281,853,571 shares issued and outstanding, respectively	$	2.9		$	2.8
Additional paid-in capital		4,221.0			4,167.7
Retained earnings		980.9			917.0
Accumulated other comprehensive loss		(59.0	)		(59.7	)
Treasury stock		(40.5	)		(30.5	)
Total Common Stockholders’ Equity		5,105.3			4,997.3
Long-term debt, excluding amounts due within one year		6,806.9			6,267.1
Total Capitalization		11,912.2			11,264.4
Current Liabilities
Current portion of long-term debt		766.9			327.3
Short-term borrowings		327.6			1,359.4
Accounts payable		292.1			434.8
Dividends payable		68.3			-
Customer deposits and credits		201.8			313.6
Taxes accrued		185.5			220.9
Interest accrued		116.6			111.9
Overrecovered gas and fuel costs		84.1			48.9
Price risk management liabilities		132.7			167.8
Exchange gas payable		101.4			168.2
Deferred revenue		10.0			10.1
Regulatory liabilities		93.3			112.0
Accrued liability for postretirement and postemployment benefits		26.6			26.6
Legal and environmental reserves		35.6			43.9
Other accruals		219.8			301.0
Total Current Liabilities		2,662.3			3,646.4
Other Liabilities and Deferred Credits
Price risk management liabilities		45.6			138.9
Deferred income taxes		2,730.5			2,541.9
Deferred investment tax credits		26.9			29.0
Deferred credits		85.0			78.9
Accrued liability for postretirement and postemployment benefits		939.4			953.8
Regulatory liabilities and other removal costs		1,615.7			1,663.9
Asset retirement obligations		149.7			146.4
Other noncurrent liabilities		242.1			244.7
Total Other Liabilities and Deferred Credits		5,834.9			5,797.5
Commitments and Contingencies (Refer to Note 19)		-			-
Total Capitalization and Liabilities	$	20,409.4		$	20,708.3

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

9

ITEM 1.  FINANCIAL STATEMENTS (continued)

NiSource Inc.

Condensed Statements of Consolidated Cash Flows (unaudited)

Six Months Ended June 30, (in millions)	2012			2011
Operating Activities
Net Income	$	262.8		$	249.7
Adjustments to Reconcile Net Income to Net Cash from Continuing Operations:
Depreciation and amortization		294.1			268.8
Net changes in price risk management assets and liabilities		(20.1	)		15.3
Deferred income taxes and investment tax credits		129.0			135.9
Deferred revenue		(0.1	)		(2.6	)
Stock compensation expense and 401(k) profit sharing contribution		19.7			17.2
Gain on sale of assets		(3.1	)		-
Loss on impairment of assets		-			0.7
Income from unconsolidated affiliates		(14.9	)		(4.4	)
Loss from discontinued operations - net of taxes		1.2			0.2
Amortization of debt related costs		4.7			4.2
AFUDC equity		(3.0	)		(1.9	)
Distributions of earnings received from equity investees		17.2			9.9
Changes in Assets and Liabilities:
Accounts receivable		305.2			434.6
Income tax receivable		0.2			97.8
Inventories		133.6			13.7
Accounts payable		(147.5	)		(250.4	)
Customer deposits and credits		(111.7	)		(134.9	)
Taxes accrued		(34.8	)		(41.2	)
Interest accrued		4.7			-
Overrecovered gas and fuel costs		54.1			221.3
Exchange gas receivable/payable		(44.7	)		(166.2	)
Other accruals		(92.8	)		(26.3	)
Prepayments and other current assets		35.2			20.6
Regulatory assets/liabilities		7.3			23.4
Postretirement and postemployment benefits		(12.6	)		(118.9	)
Deferred credits		8.5			6.3
Deferred charges and other noncurrent assets		(18.3	)		12.1
Other noncurrent liabilities		(1.1	)		(4.8	)
Net Operating Activities from Continuing Operations		772.8			780.1
Net Operating Activities used for Discontinued Operations		(1.0	)		(44.1	)
Net Cash Flows from Operating Activities		771.8			736.0
Investing Activities
Capital expenditures		(619.5	)		(445.0	)
Proceeds from disposition of assets		2.2			9.4
Restricted cash withdrawals		75.9			48.3
Contributions to equity investees		(7.6	)		(0.1	)
Other investing activities		(19.9	)		(36.0	)
Net Cash Flow used for Investing Activities		(568.9	)		(423.4	)
Financing Activities
Issuance of long-term debt		991.4			395.3
Retirement of long-term debt		(7.8	)		(13.0	)
Premiums and other debt related costs		(3.4	)		(8.2	)
Change in short-term borrowings, net		(1,031.4	)		(512.2	)
Issuance of common stock		30.0			7.9
Acquisition of treasury stock		(10.0	)		(3.0	)
Dividends paid - common stock		(130.4	)		(128.7	)
Net Cash Flow used for Financing Activities		(161.6	)		(261.9	)
Change in cash and cash equivalents from continuing operations		42.3			94.8
Cash contributions to discontinued operations		(1.0	)		(44.1	)
Cash and cash equivalents at beginning of period		11.5			9.2
Cash and Cash Equivalents at End of Period	$	52.8		$	59.9

The accompanying Notes to Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

10

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Basis of Accounting Presentation

The accompanying unaudited condensed consolidated financial statements for NiSource (the “Company”) reflect all normal recurring adjustments that are necessary, in the opinion of management, to present fairly the results of operations in accordance with GAAP in the United States of America.

The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in NiSource’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Income for interim periods may not be indicative of results for the calendar year due to weather variations and other factors.

The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although NiSource believes that the disclosures made are adequate to make the information not misleading.

Immaterial Restatement

As indicated in NiSource’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, NiSource made correcting adjustments to its historical financial statements including for the three and six months ended June 30, 2011 relating to deferred revenue, environmental asset recovery, OPEB over-reimbursement, and OPEB regulatory assets. NiSource does not believe that these corrections, individually or in the aggregate, are material to its financial statements (unaudited) for the three and six months ended June 30, 2012. For additional information on these corrections, see Note 1, Nature of Operations and Summary of Significant Accounting Policies, and Note 26, Quarterly Financial Data (Unaudited), of the Consolidated Financial Statements of NiSource’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

The following table sets forth the effects of the correcting adjustments to Net Income for the three and six months ended June 30, 2011:

Increase/(Decrease) in Net Income (in millions)	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011
Previously reported Net Income	$	38.9		$	244.1
Deferred revenue		-			(0.6	)
Environmental asset recovery		-			8.0
OPEB over-reimbursement		(0.2	)		(0.4	)
OPEB regulatory asset		2.4			2.4
Total corrections		2.2			9.4
Income taxes		0.9			3.8
Corrected Net Income	$	40.2		$	249.7

11

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The following table sets forth the effects of the correcting adjustments on affected line items within the Condensed Statement of Consolidated Income (unaudited) for the three and six months ended June 30, 2011:

Condensed Statements of Consolidated Income (unaudited)

	Three Months Ended June 30, 2011				Six Months Ended June 30, 2011
(in millions, except per share amounts)	As Previously Reported		As Corrected		As Previously Reported		As Corrected
Net Revenues
Electric	$	349.2	$	349.2	$	696.3	$	695.7
Gross Revenues		1,228.3		1,228.3		3,460.5		3,459.9
Total Net Revenues		765.8		765.8		1,827.1		1,826.5
Operation and maintenance		402.5		400.3		835.0		829.6
Depreciation and amortization		134.5		134.5		273.4		268.8
Total Operating Expenses		604.8		602.6		1,269.9		1,259.9
Operating Income		163.3		165.5		562.5		571.9
Income from Continuing Operations before Income Taxes		69.5		71.7		382.2		391.6
Income Taxes		30.0		30.9		137.9		141.7
Income from Continuing Operations		39.5		40.8		244.3		249.9
Net Income	$	38.9	$	40.2	$	244.1	$	249.7
Basic Earnings Per Share ($)
Continuing operations	$	0.14	$	0.14	$	0.87	$	0.89
Basic Earnings Per Share	$	0.14	$	0.14	$	0.87	$	0.89
Diluted Earnings Per Share ($)
Continuing operations	$	0.14	$	0.14	$	0.85	$	0.87
Diluted Earnings Per Share	$	0.14	$	0.14	$	0.85	$	0.87

These corrections affected certain line items within net cash flows from operating activities on the Condensed Statement of Consolidated Cash Flows (unaudited) for the six months ended June 30, 2011, with no net effect on total net cash flows from operating activities.

2. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Comprehensive Income. In June 2011, the FASB issued Accounting Standards Update 2011-05, which revises the manner in which entities present comprehensive income in their financial statements. The new guidance removes the presentation options in ASC 220 and requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The update does not change the items that must be reported in other comprehensive income. In December 2011, the FASB issued Accounting Standards Update 2011-12, which indefinitely defers the requirement to present reclassification adjustments out of accumulated other comprehensive income by component in both the Condensed Statements of Consolidated Income (unaudited) and the Condensed Statements of Consolidated Comprehensive Income (unaudited), as required by Accounting Standards Update 2011-05. For public entities, these updates are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. NiSource adopted the guidance on January 1, 2012 by presenting the Condensed Statements of Consolidated Income (unaudited) and the Condensed Statements of Consolidated Comprehensive Income (unaudited) as two separate but consecutive statements.

12

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Goodwill Impairment. In September 2011, the FASB issued Accounting Standards Update 2011-08, which gives entities testing goodwill for impairment the option of performing a qualitative assessment before calculating the fair value of a reporting unit for the goodwill impairment test. The amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. As NiSource performs its annual Goodwill impairment test during the second quarter of its fiscal year, NiSource considered the provisions of this new standard and determined not to elect the option for the second quarter of 2012. NiSource will continue to evaluate whether to elect the option going forward.

Recently Issued Accounting Pronouncements

Balance Sheet Disclosure. In December 2011, the FASB issued Accounting Standards Update 2011-11, which requires additional disclosures regarding the nature of an entity’s rights to offset positions associated with its financial and derivative instruments. These new disclosures will provide additional information about the entity’s gross and net financial exposure. The amendment is effective for fiscal years, and interim periods within those years, beginning after January 1, 2013 with retrospective application required. NiSource is currently reviewing the provisions of this new standard to determine the impact on its Condensed Consolidated Financial Statements (unaudited) and Notes to Condensed Consolidated Financial Statements (unaudited).

3. Earnings Per Share

Basic EPS is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The weighted average shares outstanding for diluted EPS includes the incremental effects of the various long-term incentive compensation plans and the Forward Agreements (refer to Note 4 “Forward Equity Agreement” for additional information). The calculation of diluted earnings per share excludes out-of-the-money stock options which had an anti-dilutive effect. These options were 1.6 million and 3.4 million for the three months ended June 30, 2012 and 2011, respectively, and 1.7 million and 3.4 million for the six months ended June 30, 2012 and 2011, respectively. The numerator in calculating both basic and diluted EPS for each period is reported net income. The computation of diluted average common shares follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2012		2011		2012		2011
Denominator
Basic average common shares outstanding		284,370		280,217		283,648		279,780
Dilutive potential common shares
Stock options		201		-		157		-
Shares contingently issuable under employee stock plans		284		1,078		270		1,061
Shares restricted under stock plans		620		342		607		326
Forward Agreements		10,292		5,422		9,921		4,989
Diluted Average Common Shares		295,767		287,059		294,603		286,156

4. Forward Equity Agreement

On September 14, 2010, NiSource and Credit Suisse Securities (USA) LLC, as forward seller, closed an underwritten registered public offering of 24,265,000 shares of NiSource’s common stock. All of the shares sold were borrowed and delivered to the underwriters by the forward seller. NiSource did not receive any of the proceeds from the sale of the borrowed shares, but NiSource will receive proceeds upon settlement of the Forward Agreements referred to below.

In connection with the public offering, NiSource entered into forward sale agreements (“Forward Agreements”) with an affiliate of the forward seller covering an aggregate of 24,265,000 shares of NiSource’s common stock. Settlement of the Forward Agreements is expected to occur no later than September 10, 2012. Subject to certain exceptions, NiSource may elect cash or net share settlement for all or a portion of its obligations under the Forward Agreements. Upon any physical settlement of the Forward Agreements, NiSource will deliver shares of its common

13

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

stock in exchange for cash proceeds at the forward sale price, which initially is $15.9638 and is subject to adjustment as provided in the Forward Agreements. If the equity forward had been settled by delivery of shares at June 30, 2012, NiSource would have received approximately $345.3 million based on a forward price of $14.2288 for the 24,265,000 shares. NiSource currently anticipates settling the equity forward by delivering shares.

In accordance with ASC 815-40, NiSource has classified the Forward Agreements as an equity transaction. As a result of this classification, no amounts have been recorded in the Condensed Consolidated Financial Statements (unaudited) as of the six months ended June 30, 2012 and the year ended December 31, 2011 in connection with the Forward Agreements. The only impact to the Condensed Consolidated Financial Statements (unaudited) is the inclusion of incremental shares within the calculation of fully diluted EPS under the treasury stock method. Refer to Note 3, “Earnings Per Share,” for additional information.

5. Gas in Storage

Both the LIFO inventory methodology and the weighted average cost methodology are used to value natural gas in storage. Gas Distribution Operations price natural gas storage injections at the average of the costs of natural gas supply purchased during the year. For interim periods, the difference between current projected replacement cost and the LIFO cost for quantities of gas temporarily withdrawn from storage is recorded as a temporary LIFO liquidation credit or debit within the Condensed Consolidated Balance Sheets (unaudited). Due to seasonality requirements, NiSource expects interim variances in LIFO layers to be replenished by year-end. NiSource has a temporary LIFO liquidation debit of $8.9 million recorded for the six months ended June 30, 2012 for certain gas distribution companies recorded within “Prepayments and other,” on the Condensed Consolidated Balance Sheets (unaudited).

6. Discontinued Operations and Assets and Liabilities Held for Sale

There were no significant assets or liabilities of discontinued operations and held for sale on the Condensed Consolidated Balance Sheets (unaudited) at June 30, 2012 and December 31, 2011.

Results from discontinued operations, which primarily arise from changes in estimate for certain liabilities for Columbia Propane and NiSource’s former exploration and production subsidiary, CER, are provided in the following table:

	Three Months Ended June 30,						Six Months Ended June  30,
(in millions)	2012			2011			2012			2011
Loss from discontinued operations	$	(1.7	)	$	(0.8	)	$	(1.9	)	$	(0.2	)
Income tax benefit		(0.6	)		(0.2	)		(0.7	)		-
Loss from Discontinued Operations - net of taxes	$	(1.1	)	$	(0.6	)	$	(1.2	)	$	(0.2	)

7. Asset Retirement Obligations

Certain costs of removal that have been, and continue to be, included in depreciation rates and collected in the service rates of the rate-regulated subsidiaries are classified as “Regulatory liabilities and other removal costs” on the Condensed Consolidated Balance Sheets (unaudited).

14

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Changes in NiSource’s liability for asset retirement obligations for the six months ended June 30, 2012 and 2011 are presented in the table below:

(in millions)	2012			2011
Balance as of January 1,	$	146.4		$	138.8
Accretion expense		0.5			0.3
Accretion recorded as a regulatory asset/liability		4.3			3.8
Settlements		(1.5	)		(1.1)
Change in estimated cash flows		-			(2.9)
Balance as of June 30,	$	149.7		$	138.9

8. Regulatory Matters

Gas Distribution Operations Regulatory Matters

Significant Rate Developments. On June 27, 2011, Northern Indiana filed a settlement agreement with the IURC in which regulatory stakeholders agreed that Northern Indiana should adopt the WACOG accounting methodology instead of LIFO, Northern Indiana’s historical method. On August 31, 2011, the IURC approved the settlement and Northern Indiana transitioned to WACOG accounting methodology beginning January 1, 2012.

On March 15, 2012, the IURC approved a settlement agreement with Northern Indiana and all participating parties to extend its product and services contained in its current gas ARP indefinitely.

On May 19, 2008 Columbia of Ohio filed an application with the PUCO to defer environmental remediation expenses. On September 24, 2008, the PUCO approved the application. Each year Columbia of Ohio must report on the amounts deferred during the previous year. On December 6, 2011, Columbia of Ohio filed its annual deferral report for the twelve months ended November 30, 2011. PUCO Staff filed its Comments on January 5, 2012, and objected to deferral of costs for a Toledo remediation project. Columbia of Ohio capitalized $2.4 million in costs associated with the Toledo project which will be proposed for recovery as a component of future rate base.

On March 19, 2012, Columbia of Massachusetts filed its Off-Peak RDAF with a proposed effective date of May 1, 2012. On April 23, 2012, the DPU issued an order, allowing the proposed RDAF to take effect subject to further investigation and reconciliation. An evidentiary hearing is set for August 28, 2012.

On April 13, 2012, Columbia of Massachusetts submitted a filing with the Massachusetts DPU requesting an annual revenue requirement increase of $29.2 million. Columbia of Massachusetts filed using a historic test year ending December 31, 2011. Additionally, Columbia of Massachusetts proposed rate-year, rate base treatment, as well as modification to the TIRF. The rate-year, rate base treatment has been proposed to reduce the impact of regulatory lag. An order is expected later this year, with new rates going into effect on November 1, 2012.

On February 14, 2012, Columbia of Ohio held its first standard choice offer auction which resulted in a retail price adjustment of $1.53 per Mcf. On February 14, 2012, the PUCO issued an entry that approved the results of the auction with the new retail price adjustment to become effective April 1, 2012. With the implementation of the standard choice offer, Columbia of Ohio will report lower gross revenues and lower cost of sales. There is no impact on net revenues.

On October 3, 2011, Columbia of Ohio filed an application with PUCO, requesting authority to defer incurred charges to a regulatory asset for debt-based post-in-service carrying charges, depreciation and property taxes associated with Columbia of Ohio’s capital program. Interested parties filed comments on Columbia of Ohio’s application by February 17, 2012. Columbia of Ohio filed Reply Comments on February 27, 2012.

On November 30, 2011 Columbia of Ohio filed a Notice of Intent to file an application to adjust rates associated with Rider IRP and Rider DSM. On February 28, 2012, Columbia of Ohio filed its application to adjust rates associated with IRP and DSM Riders. The DSM Rider tracks and recovers costs associated with Columbia of Ohio’s energy efficiency and conservation programs. The application sought to increase the annual revenue from

15

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

the riders by approximately $27.9 million. On April 10, 2012, Columbia of Ohio reached a settlement with parties allowing for an increase in annual revenue from the Riders of approximately $27 million. On April 25, 2012, the PUCO issued an Entry that provided for approval of the settlement with new rates effective April 29, 2012.

On December 9, 2011 Columbia of Ohio filed a Notice of Intent to file an application to extend its Infrastructure Replacement Program. On January 6, 2012, the OCC filed a Memorandum Contra, arguing that Columbia of Ohio’s base rates should be reviewed as part of the IRP extension process. Columbia of Ohio filed a Reply Memorandum on January 11, 2012. Columbia of Ohio filed an amended Notice of Intent and an amended Motion for Waiver on March 5, 2012. On May 8, 2012, Columbia of Ohio filed its application and supporting exhibits and testimony. On June 14, 2012 the PUCO issued an Entry through which it established a procedural schedule that provided for the filing of comments by June 14, 2012 and the filing of reply comments by June 25, 2012. On June 8, 2012, the PUCO Staff filed a motion for an extension of time for filing of comments by all parties to August 31, 2012. By Entry dated June 12, 2012, the PUCO extended the deadline for filing comments to August 31, 2012 and the deadline for filing reply comments to September 11, 2012.

On March 30, 2012, Columbia of Ohio filed an application with the PUCO that requests authority to establish a regulatory asset for corporate OPEB expenses allocated to Columbia of Ohio. The amount that Columbia of Ohio sought authority to defer is $2.1 million. By Entry dated July 18, 2012, the PUCO approved the application.

On April 12, 2012, Columbia of Virginia filed an Application with the VSCC for approval to amend and extend its CARE Plan for an additional three year period beginning January 1, 2013. The Amended CARE Plan includes incentives for residential and small general service customers to actively pursue conservation and energy efficiency measures, a surcharge designed to recover the costs of such measures on a real-time basis, and a performance-based incentive for the delivery of conservation and energy efficiency benefits. The Amended CARE Plan also includes a rate decoupling mechanism designed to mitigate the impact of declining customer usage. On April 27, 2012, the VSCC issued a procedural order inviting comments from the VSCC Staff and interested persons. The VSCC Staff and Columbia of Virginia reached a comprehensive settlement of the issues in the case and filed a Joint Motion requesting VSCC approval of the settlement terms on July 13, 2012. A decision is anticipated by August 10, 2012.

On April 19, 2012, Columbia of Ohio filed an application that requests authority to increase its uncollectible expense rider rate in order to generate an additional $14.6 million in annual revenue in order to offset anticipated increases in uncollectible expenses. On May 30, 2012, the PUCO issued an Entry that provided for approval of Columbia of Ohio’s April 19, 2012 application for adjustment of its uncollectible expense rider with the new rate effective May 30, 2012.

On April 30, 2012, Columbia of Ohio filed an application to adjust its Interim, Emergency and Temporary Percentage of Income Payment Plan Rider (“PIPP”) from $0.1274 per Mcf to $0.0294 per Mcf to provide for the passback of an overrecovery of approximately $10.9 million and the recovery of its annual change in PIPP arrears. The PUCO approved the application and the revised PIPP Rider went into effect for the first billing unit of July 2012.

Cost Recovery and Trackers. A significant portion of the distribution companies’ revenue is related to the recovery of gas costs, the review and recovery of which occurs via standard regulatory proceedings. All states require periodic review of actual gas procurement activity to determine prudence and to permit the recovery of prudently incurred costs related to the supply of gas for customers. NiSource distribution companies have historically been found prudent in the procurement of gas supplies to serve customers.

Certain operating costs of the NiSource distribution companies are significant, recurring in nature, and generally outside the control of the distribution companies. Some states allow the recovery of such costs via cost tracking mechanisms. Such tracking mechanisms allow for abbreviated regulatory proceedings in order for the distribution companies to implement charges and recover appropriate costs. Tracking mechanisms allow for more timely recovery of such costs as compared with more traditional cost recovery mechanisms. Examples of such mechanisms include GCR adjustment mechanisms, tax riders, and bad debt recovery mechanisms.

Comparability of Gas Distribution Operations line item operating results is impacted by regulatory trackers that allow for the recovery in rates of certain costs such as bad debt expenses. Increases in the expenses that are the subject of trackers, result in a corresponding increase in net revenues and therefore have essentially no impact on total operating income results.

16

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Certain of the NiSource distribution companies have completed rate proceedings involving infrastructure replacement or are embarking upon regulatory initiatives to replace significant portions of their operating systems that are nearing the end of their useful lives. Each LDC’s approach to cost recovery may be unique, given the different laws, regulations and precedent that exist in each jurisdiction.

Gas Transmission and Storage Operations Regulatory Matters

Columbia Gulf Rate Case. On October 28, 2010, Columbia Gulf filed a rate case with the FERC, proposing a rate increase and tariff changes. Among other things, the filing proposed a revenue increase of approximately $50 million to cover increases in the cost of services, which includes adjustments for operation and maintenance expenses, capital investments, adjustments to depreciation rates and expense, rate of return, and increased federal, state and local taxes. On November 30, 2010, the FERC issued an Order allowing new rates to become effective by May 2011, subject to refund. Columbia Gulf placed new rates into effect, subject to refund, on May 1, 2011. Columbia Gulf and the active parties to the case negotiated a settlement, which was filed with the FERC on September 9, 2011. On September 30, 2011, the Chief Judge severed the issues relating to a contesting party for separate hearing and decision. On October 4, 2011, the Presiding Administrative Law Judge certified the settlement agreement as uncontested to the FERC with severance of the contesting party from the settlement. On November 1, 2011, Columbia Gulf began billing interim rates to customers. On December 1, 2011, the FERC issued an order approving the settlement without change. The key elements of the settlement, which was a “black box agreement”, include: (1) increased base rate to $0.1520 per Dth and (2) establishing a postage stamp rate design. No protests to the order were filed and therefore, pursuant to the Settlement, the order became final on January 1, 2012 which made the settlement effective on February 1, 2012. On February 2, 2012, the Presiding Administrative Law Judge issued an initial decision granting a joint motion terminating the remaining litigation with the contesting party and allowing it to become a settling party. The FERC issued an order on March 15, 2012, affirming the initial decision, which terminated the remaining litigation with the contesting party. Refunds of approximately $16 million, accrued as of December 31, 2011, were disbursed to settling parties in March 2012.

Electric Operations Regulatory Matters

Significant Rate Developments. On July 18, 2011, Northern Indiana filed with the IURC a settlement in its 2010 Electric Rate Case with the OUCC, Northern Indiana Industrial Group, NLMK Indiana and Indiana Municipal Utilities Group. The settlement agreement limited the proposed base rate impact to the residential customer class to a 4.5% increase. The parties have also agreed to a rate of return of 6.98% based upon a 10.2% return on equity. The settlement also resolves all pending issues related to compliance with the August 25, 2010 Order in the 2008 Electric Rate Case. On December 21, 2011, the IURC issued an Order approving the Settlement Agreement as filed, and new electric base rates became effective on December 27, 2011. On January 20, 2012, the City of Hammond filed an appeal of the IURC’s December 21, 2011 Order and subsequently, on June 4, 2012, filed a motion to dismiss the appeal. The motion was granted on June 27, 2012.

During 2002, Northern Indiana settled certain regulatory matters related to an electric rate review. On September 23, 2002, the IURC issued an Order adopting most aspects of the settlement. The Order approving the settlement provided that certain electric customers of Northern Indiana would receive bill credits of approximately $55.1 million each year. The credits continued at approximately the same annual level and per the same methodology, until the IURC approval and implementation of new customer rates, which occurred on December 27, 2011. A final reconciliation of the credits will occur in a future fuel cost filing according to the terms of the approved settlement in the 2010 Electric Rate Case. Credits amounting to $(1.0) million and $25.1 million were recognized for electric customers for the first six months of 2012 and 2011, respectively.

On December 9, 2009, the IURC issued an Order in its generic DSM investigation proceeding establishing an overall annual energy savings goal of 2% to be achieved by Indiana jurisdictional electric utilities in 10 years, with interim savings goals established in years one through nine. On May 25, 2011, the IURC issued an Order approving a tracker mechanism to recover the costs associated with these energy efficiency programs. On July 27, 2011, the IURC issued an Order approving the energy efficiency programs. On February 1, 2012, Northern Indiana submitted a petition to the IURC to recover lost margins. The evidentiary hearing was held on July 3, 2012. No party opposed Northern Indiana’s request. An order is anticipated late in the third quarter of 2012.

17

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Cost Recovery and Trackers. A significant portion of Northern Indiana’s revenue is related to the recovery of fuel costs to generate power and the fuel costs related to purchased power. These costs are recovered through a FAC, a standard, quarterly, “summary” regulatory proceeding in Indiana.

As part of a multi-state effort to strengthen the electric transmission system serving the Midwest, Northern Indiana anticipates making an investment in a new, 100-mile, 345-kilovolt transmission project in northern Indiana. The project, a major new transmission system improvement reviewed and authorized by the MISO, is scheduled to be in service during the latter part of the decade. On March 16, 2012, Northern Indiana filed with the FERC for incentives for this transmission project, including all construction work in progress in rate base. Northern Indiana has also been identified by the MISO as one of two Transmission Owners to invest in another project. On February 8, 2012, Pioneer Transmission, LLC filed a complaint with the FERC, seeking to obtain 100 percent of the investment rights in this second project. The last Response was filed by Northern Indiana on March 27, 2012. On July 19, 2012, the FERC issued an order approving the incentives requested by Northern Indiana, including all construction work in progress in rate base, for the 100-mile, 345-kilovolt transmission project in northern Indiana. On this same day, the FERC also issued an order which denied the complaint filed by Pioneer Transmission, LLC and affirmed that Northern Indiana and Duke Energy are the appropriate parties to share equally in the development of a 66-mile 765kV transmission project extending between Reynolds, Indiana and Greentown, Indiana.

In the Order issued on August 25, 2010, the IURC approved an RTO tracker for recovery of MISO non-fuel costs and revenues and off-system sales sharing and ordered that purchased power costs and fuel-related MISO charge types be recovered in the FAC. The IURC also approved a purchase capacity tracker referred to as the RA Tracker. Similar treatment was requested in the 2010 Electric Rate Case filing and approved in the December 21, 2011 Order approving the Settlement Agreement. The implementation of such trackers coincides with the implementation of new customer rates. Northern Indiana made its first filings for recovery of costs under the RTO and RA mechanisms on February 2, 2012. The RTO filing also seeks authorization from the IURC to retain certain revenues under MISO Schedule 26-A to support investments in Northern Indiana’s Multi-Value Projects under MISO’s 2011 transmission expansion plan. On April 10, 2012, the IURC approved a procedural schedule to consider the retention of MISO Schedule 26-A revenues. The hearing was held on May 14, 2012. An order is anticipated in the third quarter of 2012.

As part of the August 25, 2010 Order, a new “purchase power benchmark” became effective. This purchase power benchmark superseded the one made effective by a settlement in October 2007. The benchmark is based upon the costs of power generated by a hypothetical natural gas fired unit using gas purchased and delivered to Northern Indiana. During the first six months of 2012 and 2011, no purchased power costs exceeded the benchmark.

On March 22, 2011, Northern Indiana filed a petition with the IURC for a certificate of public convenience and necessity and associated relief for the construction of additional environmental projects required to comply with the NOV consent decree lodged in the United States District Court for the Northern District of Indiana on January 13, 2011. Refer to Note 19-C, “Environmental Matters,” for additional information. This petition has since been trifurcated into three separate phases. On December 28, 2011, the IURC issued an order for the Phase I projects estimated to cost $500 million and granting the requested ratemaking and accounting relief associated with these Phase I projects. On February 15, 2012, the IURC issued an order for the Phase II projects. The proposed construction of a FGD unit on Michigan City Generating Station Unit 12 is the subject of Phase III of this proceeding. The evidentiary hearing for the Phase III projects was held on May 10, 2012. No party opposed Northern Indiana’s request. An order is anticipated in the second half of 2012.

On February 7, 2012, Northern Indiana filed ECR-19 and EER-9, the filing implementing the ECT, which included $109.6 million of net capital expenditures and operation and maintenance and depreciation expenses of $32.6 million for the period ended December 31, 2011.

18

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

9. Risk Management Activities

NiSource is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are commodity price risk and interest rate risk. Derivative natural gas contracts are entered into to manage the price risk associated with natural gas price volatility and to secure forward natural gas prices. Interest rate swaps are entered into to manage interest rate risk associated with NiSource’s fixed-rate borrowings. NiSource designates some of its commodity forward contracts as cash flow hedges of forecasted purchases of commodities and designates its interest rate swaps as fair value hedges of fixed-rate borrowings. Additionally, certain NiSource subsidiaries enter into forward physical contracts with various third parties to procure or sell natural gas or power. Certain forward physical contracts are derivatives which qualify for, and which NiSource may elect, the normal purchase and normal sales exception which do not require mark-to-market accounting.

Accounting Policy for Derivative Instruments.    The ASC topic on accounting for derivatives and hedging requires an entity to recognize all derivatives as either assets or liabilities on the Consolidated Balance Sheets at fair value, unless such contracts are exempted such as a normal purchase and normal sale contract under the provisions of the ASC topic. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and resulting designation.

NiSource uses a variety of derivative instruments (exchange traded futures and options, physical forwards and options, basis contracts, financial commodity swaps, and interest rate swaps) to effectively manage its commodity price risk and interest rate risk exposure. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, or (b) a hedge of the exposure to variable cash flows of a forecasted transaction. In order for a derivative contract to be designated as a hedge, the relationship between the hedging instrument and the hedged item or transaction must be highly effective. The effectiveness test is performed at the inception of the hedge and each reporting period thereafter, throughout the period that the hedge is designated. Any amounts determined to be ineffective are recognized currently in earnings. For derivative contracts that qualify for the normal purchase and normal sales exception, a contract’s fair value is not recognized in the Consolidated Financial Statements until the contract is settled.

Unrealized and realized gains and losses are recognized each period as components of AOCI, regulatory assets and liabilities or earnings depending on the designation of the derivative instrument. For subsidiaries that utilize derivatives for cash flow hedges, the effective portions of the gains and losses are recorded to AOCI and are recognized in earnings concurrent with the disposition of the hedged risks. If a forecasted transaction corresponding to a cash flow hedge is no longer probable to occur, the accumulated gains or losses on the derivative are recognized currently in earnings. For fair value hedges, the gains and losses are recorded in earnings each period together with the change in the fair value of the hedged item. As a result of the rate-making process, the rate-regulated subsidiaries generally record gains and losses as regulatory liabilities or assets and recognize such gains or losses in earnings when both the contracts settle and the physical commodity flows. These gains and losses recognized in earnings are then subsequently recovered or passed back to customers in revenues through rates. When gains and losses are recognized in earnings, they are recognized in revenues or cost of sales for derivatives that correspond to commodity risk activities and are recognized in interest expense for derivatives that correspond to interest-rate risk activities.

NiSource has elected not to net fair value amounts for its derivative instruments or the fair value amounts recognized for its right to receive cash collateral or obligation to pay cash collateral arising from those derivative instruments recognized at fair value, which are executed with the same counterparty under a master netting arrangement. NiSource discloses amounts recognized for the right to reclaim cash collateral within “Restricted cash” and amounts recognized for the right to return cash collateral within “Other accruals” on the Consolidated Balance Sheets.

Commodity Price Risk Programs.    NiSource and NiSource’s utility customers are exposed to variability in cash flows associated with natural gas purchases and volatility in natural gas prices. NiSource purchases natural gas for sale and delivery to its retail, commercial and industrial customers, and for most customers the variability in the market price of gas is passed through in their rates. Some of NiSource’s utility subsidiaries offer programs where variability in the market price of gas is assumed by the respective utility. The objective of NiSource’s commodity

19

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

price risk programs is to mitigate this gas cost variability, for NiSource or on behalf of its customers, associated with natural gas purchases or sales by economically hedging the various gas cost components by using a combination of futures, options, forward physical contracts, basis swap contracts or other derivative contracts. Northern Indiana also uses derivative contracts to minimize risk associated with power price volatility. These commodity price risk programs and their respective accounting treatment are described below.

Northern Indiana, Columbia of Pennsylvania, Columbia of Kentucky, Columbia of Maryland and Columbia of Virginia use NYMEX futures and NYMEX options to minimize risk associated with gas price volatility. These derivative programs must be marked to fair value, but because these derivatives are used within the framework of the companies’ GCR or FAC mechanism, regulatory assets or liabilities are recorded to offset the change in the fair value of these derivatives.

Northern Indiana and Columbia of Virginia offer a fixed price program as an alternative to the standard GCR mechanism. These services provide certain customers with the opportunity to either lock in their gas cost or place a cap on the gas costs that would be charged in future months. In order to hedge the anticipated physical purchases associated with these obligations, forward physical contracts, NYMEX futures and NYMEX options are used to secure forward gas prices. The accounting treatment elected for these contracts is varied in that certain of these contracts have been accounted for as cash flow hedges while some contracts are not. The accounting treatment is based on the election of the company. The normal purchase and normal sales exception is elected for forward physical contracts associated with these programs where delivery of the commodity is probable to occur.

Northern Indiana also offers a DependaBill program to its customers as an alternative to the standard tariff rate that is charged to residential customers. The program allows Northern Indiana customers to fix their total monthly bill in future months at a flat rate regardless of gas usage or commodity cost. In order to hedge the anticipated physical purchases associated with these obligations, forward physical contracts, NYMEX futures and NYMEX options have been used to secure forward gas prices. The normal purchase and normal sales exception is elected for forward physical contracts associated with these programs where delivery of the commodity is probable to occur.

Northern Indiana enters into gas purchase contracts at first of the month prices that give counterparties the daily option to either sell an additional package of gas at first of the month prices or recall the original volume to be delivered. Northern Indiana charges a fee for this option. The changes in the fair value of these options are primarily due to the changing expectations of the future intra-month volatility of gas prices. These written options are derivative instruments, must be marked to fair value and do not meet the requirement for hedge accounting treatment. However, Northern Indiana records the related gains and losses associated with these transactions as a regulatory asset or liability.

Columbia of Kentucky, Columbia of Ohio and Columbia of Pennsylvania enter into contracts that allow counterparties the option to sell gas to them at first of the month prices for a particular month of delivery. These Columbia LDCs charge the counterparties a fee for this option. The changes in the fair value of the options are primarily due to the changing expectations of the future intra-month volatility of gas prices. These Columbia LDCs defer a portion of the change in the fair value of the options as either a regulatory asset or liability based on the regulatory customer sharing mechanisms in place, with the remaining changes in fair value recognized currently in earnings.

As part of the MISO Day 2 initiative, Northern Indiana was allocated or has purchased FTRs. These FTRs help Northern Indiana offset congestion costs due to the MISO Day 2 activity. The FTRs are marked to fair value and are not accounted for as a hedge, but since congestion costs are recoverable through the fuel cost recovery mechanism, the related gains and losses associated with marking these derivatives to market are recorded as a regulatory asset or liability. In the second quarter of 2008, MISO changed its allocation procedures from an allocation of FTRs to an allocation of ARRs, whereby Northern Indiana was allocated ARRs based on its historical use of the MISO administered transmission system. ARRs entitle the holder to a stream of revenues or charges based on the price of the associated FTR in the FTR auction, so ARRs can be used to purchase FTRs in the FTR auction. ARRs are not derivatives.

20

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

NiSource is in the process of winding down its unregulated natural gas marketing business, where gas financial contracts are utilized to economically hedge expected future gas purchases associated with forward gas agreements. These financial contracts, as well as the associated forward physical sales contracts, are derivatives and are marked-to-market with all associated gains and losses recognized to income. NiSource established a reserve of $1.6 million and $25.6 million against certain derivatives as of June 30, 2012 and December 31, 2011, respectively. This amount represents reserves related to the creditworthiness of certain customers, fair value of future cash flows, and the cost of maintaining significant amounts of restricted cash. The physical sales contracts marked-to-market had a fair value of approximately $55.4 million at June 30, 2012 and $136.8 million at December 31, 2011, while the financial derivative contracts marked-to-market had a fair value loss of $52.9 million at June 30, 2012, and $155.5 million at December 31, 2011. During the fourth quarter of 2011, NiSource recorded a reserve of $22.6 million on certain assets related to the wind down of the unregulated natural gas marketing business. During 2012, NiSource settled a majority of the contracts related to the reserve noted above and wrote off $43.8 million of price risk assets. Additionally, NiSource has a notes receivable balance related to the settlements of $21.3 million as of June 30, 2012.

On October 31, 2011, cash and derivatives broker-dealer MF Global filed for Chapter 11 bankruptcy protection. MF Global brokered NYMEX hedges of natural gas futures on behalf of NiSource affiliates. At the date of bankruptcy, NiSource affiliates had contracts open with MF Global with settlement dates ranging from November 2011 to February 2014. On November 3, 2011, these contracts were measured at a mark-to-market loss of approximately $46.4 million. NiSource affiliates had posted initial margin to open these accounts of $6.9 million and additional maintenance margin for mark-to-market losses, for a total cash balance of $53.3 million. Within the first week after the filing, at the direction of the Bankruptcy Court, a transfer of assets was initiated on behalf of NiSource affiliates to a court-designated replacement broker for future trade activity. The existing futures positions were closed and then rebooked with the replacement broker at the new closing prices as of November 3, 2011. Initial margin on deposit at MF Global of $5.7 million was transferred to the court-designated replacement broker. The maintenance margin was retained by MF Global to offset the loss positions of the open contracts on November 3, 2011. NiSource affiliates are monitoring the activity in the bankruptcy case and have filed a proof of claim at the Court’s direction. As of June 30, 2012, NiSource affiliates maintained a reserve for the $1.2 million difference between the initial margin posted with MF Global and the cash transferred to the court-designated replacement broker as a loss contingency.

Commodity price risk program derivative contracted gross volumes are as follows:

	June 30, 2012		December 31, 2011
Commodity Price Risk Program:
Gas price volatility program derivatives (MMDth)		31.5		26.1
Price Protection Service program derivatives (MMDth)		0.4		1.0
DependaBill program derivatives (MMDth)		0.3		0.3
Regulatory incentive program derivatives (MMDth)		-		0.9
Gas marketing program derivatives (MMDth)(1)		13.8		28.5
Gas marketing forward physical derivatives (MMDth)(2)		13.8		27.1
Electric energy program FTR derivatives (mw)(3)		17,686.2		8,578.5

⁽¹⁾Basis contract volumes not included in the above table were 14.1 MMDth and 15.9 MMDth as of June 30, 2012 and December 31, 2011, respectively.

⁽²⁾Basis contract volumes not included in the above table were 14.5 MMDth and 29.9 MMDth as of June 30, 2012 and December 31, 2011, respectively.

⁽³⁾Megawatt hours reported in thousands

Interest Rate Risk Activities. NiSource recognizes that the prudent and selective use of derivatives may help it to lower its cost of debt capital and manage its interest rate exposure. NiSource Finance has entered into various “receive fixed” and “pay floating” interest rate swap agreements which modify the interest rate characteristics of a portion of its outstanding long-term debt from fixed to variable rate. These interest rate swaps also serve to hedge the fair market value of NiSource Finance’s outstanding debt portfolio. As of June 30, 2012, NiSource had $7.3

21

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

billion of outstanding fixed rate debt, of which $500.0 million is subject to fluctuations in interest rates as a result of the fixed-to-variable interest rate swap transactions. These interest rate swaps are designated as fair value hedges. NiSource had no net gain or loss recognized in earnings due to hedging ineffectiveness for the six months ended June 30, 2012 and 2011.

On July 22, 2003, NiSource Finance entered into fixed-to-variable interest rate swap agreements in a notional amount of $500 million with four counterparties with an 11-year term. NiSource Finance receives payments based upon a fixed 5.40% interest rate and pays a floating interest amount based on U.S. 6-month BBA LIBOR plus an average of 0.78% per annum. There was no exchange of premium at the initial date of the swaps. In addition, each party has the right to cancel the swaps on July 15, 2013.

Contemporaneously with the issuance on September 16, 2005 of $1 billion of its 5.25% and 5.45% notes, maturing September 15, 2017 and 2020, respectively, NiSource Finance settled $900 million of forward starting interest rate swap agreements with six counterparties. NiSource paid an aggregate settlement payment of $35.5 million which is being amortized from AOCI to interest expense over the term of the underlying debt, resulting in an effective interest rate of 5.67% and 5.88%, respectively. As of June 30, 2012, AOCI includes $10.5 million related to forward starting interest rate swap settlement, net of tax. These derivative contracts are accounted for as a cash flow hedge.

As of June 30, 2012, NiSource holds a 47.5% interest in Millennium. As NiSource reports Millennium as an equity method investment, NiSource is required to recognize a proportional share of Millennium’s OCI. NiSource’s proportionate share of the remaining unrealized loss associated with a settled interest rate swap is $19.2 million, net of tax, as of June 30, 2012. Millennium is amortizing the unrealized loss related to these terminated interest rate swaps into earnings using the effective interest method through interest expense as interest payments are made. NiSource records its proportionate share of the amortization as Equity Earnings in Unconsolidated Affiliates in the Condensed Statements of Consolidated Income (unaudited).

NiSource’s location and fair value of derivative instruments on the Condensed Consolidated Balance Sheets (unaudited) were:

Asset Derivatives (in millions)	June 30, 2012		December 31, 2011
Balance Sheet Location	Fair Value		Fair Value (1)
Derivatives designated as hedging instruments
Interest rate risk activities
Price risk management assets (current)	$	-	$	-
Price risk management assets (noncurrent)		48.5		56.7
Total derivatives designated as hedging instruments	$	48.5	$	56.7
Derivatives not designated as hedging instruments
Commodity price risk programs
Price risk management assets (current)	$	120.0	$	141.8
Price risk management assets (noncurrent)		41.8		150.0
Total derivatives not designated as hedging instruments	$	161.8	$	291.8
Total Asset Derivatives	$	210.3	$	348.5

⁽¹⁾During the fourth quarter of 2011, NiSource recorded reserves of $22.6 million ($4.6 million current and $18.0 million noncurrent) on certain commodity price risk assets related to the wind down of the unregulated natural gas marketing business. As of June 30, 2012, NiSource has fully reversed these reserves as all contracts have been settled. The non-designated price risk asset amounts above are shown gross and have not been adjusted for the reserves.

22

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Liability Derivatives (in millions)	June 30, 2012		December 31, 2011
Balance Sheet Location	Fair Value		Fair Value
Derivatives designated as hedging instruments
Commodity price risk programs
Price risk management liabilities (current)	$	-	$	0.4
Price risk management liabilities (noncurrent)		-		0.1
Total derivatives designated as hedging instruments	$	-	$	0.5
Derivatives not designated as hedging instruments
Commodity price risk programs
Price risk management liabilities (current)	$	132.7	$	167.4
Price risk management liabilities (noncurrent)		45.6		138.8
Total derivatives not designated as hedging instruments	$	178.3	$	306.2
Total Liability Derivatives	$	178.3	$	306.7

The effect of derivative instruments on the Condensed Statements of Consolidated Income (unaudited) was:

Derivatives in Cash Flow Hedging Relationships

Three Months Ended, (in millions):

	Amount of Gain Recognized in OCI on Derivative (Effective Portion)				Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Amount of (Loss) Gain Reclassified from AOCI into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	June 30, 2012		June 30, 2011			June 30, 2012			June 30, 2011
Commodity price risk programs	$	0.3	$	-	Cost of Sales	$	(0.2	)	$	0.2
Interest rate risk activities		0.4		0.4	Interest expense, net		(0.7	)		(0.7	)
Total	$	0.7	$	0.4		$	(0.9	)	$	(0.5	)
Six Months Ended (in millions):
	Amount of Gain Recognized in OCI on Derivative (Effective Portion)				Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	June 30, 2012		June 30, 2011			June 30, 2012			June 30, 2011
Commodity price risk programs	$	0.6	$	0.5	Cost of Sales	$	(0.8)		$	0.8
Interest rate risk activities		0.8		0.8	Interest expense, net		(1.3	)		(1.3	)
Total	$	1.4	$	1.3		$	(2.1	)	$	(0.5	)

23

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Three Months Ended, (in millions):

Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
		June 30, 2012		June 30, 2011
Commodity price risk programs	Cost of Sales	$	-	$	-
Interest rate risk activities	Interest expense, net		-		-
Total		$	-	$	-
Six Months Ended, (in millions)
Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
		June 30, 2012		June 30, 2011
Commodity price risk programs	Cost of Sales	$	-	$	-
Interest rate risk activities	Interest expense, net		-		-
Total		$	-	$	-

It is anticipated that during the next twelve months the expiration and settlement of cash flow hedge contracts will result in income statement recognition of amounts currently classified in AOCI of approximately $0.2 million of loss, net of taxes.

Derivatives in Fair Value Hedging Relationships

Three Months Ended, (in millions)

Derivatives in Fair Value Hedging Relationships	Location of Gain Recognized in Income on Derivatives	Amount of Gain Recognized in Income on Derivatives
		June 30, 2012			June 30, 2011
Interest rate risk activities	Interest expense, net	$	0.8		$	9.8
Total		$	0.8		$	9.8
Six Months Ended, (in millions)
Derivatives in Fair Value Hedging Relationships	Location of Loss Recognized in Income on Derivatives	Amount of Loss Recognized in Income on Derivatives
		June 30, 2012			June 30, 2011
Interest rate risk activities	Interest expense, net	$	(8.2	)	$	(0.4	)
Total		$	(8.2	)	$	(0.4	)

24

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Three Months Ended, (in millions)

Hedged Item in Fair Value Hedge Relationships	Location of Loss Recognized in Income on Related Hedged Item	Amount of Loss Recognized in Income on Related Hedged Items
		June 30, 2012			June 30, 2011
Fixed-rate debt	Interest expense, net	$	(0.8	)	$	(9.8	)
Total		$	(0.8	)	$	(9.8	)
Six Months Ended, (in millions)
Hedged Item in Fair Value Hedge Relationships	Location of Gain Recognized in Income on Related Hedged Item	Amount of Gain Recognized in Income on Related Hedged Items
		June 30, 2012			June 30, 2011
Fixed-rate debt	Interest expense, net	$	8.2		$	0.4
Total		$	8.2		$	0.4

Derivatives not designated as hedging instruments

Three Months Ended, (in millions)

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Realized/Unrealized Gain (Loss) Recognized in Income on Derivatives *
		June 30, 2012			June 30, 2011
Commodity price risk programs	Gas Distribution revenues	$	(0.1	)	$	(0.1	)
Commodity price risk programs	Other revenues		7.7			7.8
Commodity price risk programs	Cost of Sales		9.6			(4.5	)
Total		$	17.2		$	3.2

* For the amounts of realized/unrealized gain (loss) recognized in income on derivatives disclosed in the table above, gains of $4.7 million and $3.4 million for the three months of 2012 and 2011, respectively, were deferred as allowed by regulatory orders. These amounts will be amortized to income over future periods of up to twelve months as specified in a regulatory order.

Six Months Ended, (in millions)

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Realized/Unrealized Gain (Loss) Recognized in Income on Derivatives *
		June 30, 2012			June 30, 2011
Commodity price risk programs	Gas Distribution revenues	$	0.3		$	(21.8	)
Commodity price risk programs	Other revenues		6.0			18.4
Commodity price risk programs	Cost of Sales		(11.5	)		(7.8	)
Total		$	(5.2	)	$	(11.2	)

* For the amounts of realized/unrealized gain (loss) recognized in income on derivatives disclosed in the table above, losses of $15.1 million and $19.3 million for the six months of 2012 and 2011, respectively, were deferred as allowed per regulatory orders. These amounts will be amortized to income over future periods of up to twelve months as specified in a regulatory order.

25

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

NiSource’s derivative instruments measured at fair value as of June 30, 2012 and December 31, 2011 do not contain any credit-risk-related contingent features.

Certain NiSource affiliates have physical commodity purchase agreements that contain “ratings triggers” that require increases in collateral if the credit rating of NiSource or certain of its affiliates are rated below BBB- by Standard & Poor’s or below Baa3 by Moody’s. These agreements are primarily for the physical purchase or sale of natural gas and electricity. The collateral requirement from a downgrade below the ratings trigger levels would amount to approximately $1.9 million. In addition to agreements with ratings triggers, there are some agreements that contain “adequate assurance” or “material adverse change” provisions that could result in additional credit support such as letters of credit and cash collateral to transact business.

NiSource had $81.4 million and $158.2 million of cash on deposit with brokers for margin requirements associated with open derivative positions reflected within “Restricted cash” on the Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2012 and December 31, 2011, respectively.

10. Fair Value Disclosures

A. Fair Value Measurements.

Recurring Fair Value Measurements. The following tables present financial assets and liabilities measured and recorded at fair value on NiSource’s Condensed Consolidated Balance Sheets (unaudited) on a recurring basis and their level within the fair value hierarchy as of June 30, 2012 and December 31, 2011:

Recurring Fair Value Measurements June 30, 2012 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of June 30, 2012
Assets
Commodity Price risk management assets:
Physical price risk programs	$	-	$	55.9	$	-	$	55.9
Financial price risk programs		104.4		1.5		-		105.9
Interest rate risk activities		-		48.5		-		48.5
Available-for-sale securities		30.7		69.3		-		100.0
Total	$	135.1	$	175.2	$	-	$	310.3
Liabilities
Commodity Price risk management liabilities:
Physical price risk programs	$	-	$	0.5	$	-	$	0.5
Financial price risk programs		176.5		1.0		0.3		177.8
Total	$	176.5	$	1.5	$	0.3	$	178.3

26

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Recurring Fair Value Measurements December 31, 2011 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2011
Assets
Commodity Price risk management assets:
Physical price risk programs	$	-	$	140.7	$	-	$	140.7
Financial price risk programs (1)		148.3		2.5		0.3		151.1
Interest rate risk activities		-		56.7		-		56.7
Available-for-sale securities		32.9		63.1		-		96.0
Total	$	181.2	$	263.0	$	0.3	$	444.5
Liabilities
Commodity Price risk management liabilities:
Physical price risk programs	$	-	$	3.9	$	-	$	3.9
Financial price risk programs		301.1		1.7		-		302.8
Total	$	301.1	$	5.6	$	-	$	306.7

⁽¹⁾During the fourth quarter of 2011, NiSource recorded a reserve of $22.6 million on certain assets related to the wind down of the unregulated natural gas marketing business. The financial price risk program amount above is shown gross and has not been adjusted for the reserve.

Price risk management assets and liabilities include commodity exchange-traded and non-exchange-based derivative contracts. Exchange-traded derivative contracts are generally based on unadjusted quoted prices in active markets and are classified within Level 1. These financial assets and liabilities are secured with cash on deposit with the exchange; therefore nonperformance risk has not been incorporated into these valuations. Certain non-exchange-traded derivatives are valued using broker or over-the-counter, on-line exchanges. In such cases, these non-exchange-traded derivatives are classified within Level 2. Non-exchange-based derivative instruments include swaps, forwards, and options. In certain instances, these instruments may utilize models to measure fair value. NiSource uses a similar model to value similar instruments. Valuation models utilize various inputs that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, other observable inputs for the asset or liability, and market-corroborated inputs, i.e., inputs derived principally from or corroborated by observable market data by correlation or other means. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. Certain derivatives trade in less active markets with a lower availability of pricing information and models may be utilized in the valuation. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized in Level 3. Credit risk is considered in the fair value calculation of derivative instruments that are not exchange-traded. Credit exposures are adjusted to reflect collateral agreements which reduce exposures. As of June 30, 2012 and 2011, there were no material transfers between fair value hierarchies. Additionally there were no changes in the method or significant assumptions used to estimate the fair value of NiSource’s financial instruments.

To determine the fair value of derivatives associated with NiSource’s unregulated natural gas marketing business, certain reserves were calculated. These reserves were primarily determined by evaluating the credit worthiness of certain customers, fair value of future cash flows, and the cost of maintaining restricted cash. Refer to Note 9, “Risk Management Activities” for additional information on price risk assets.

Price risk management assets also include fixed-to-floating interest-rate swaps, which are designated as fair value hedges, as a means to achieve NiSource’s targeted level of variable-rate debt as a percent of total debt. NiSource uses a calculation of future cash inflows and estimated future outflows related to the swap agreements, which are discounted and netted to determine the current fair value. Additional inputs to the present value calculation include

27

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

the contract terms, as well as market parameters such as current and projected interest rates and volatility. As they are based on observable data and valuations of similar instruments, the interest-rate swaps are categorized in Level 2 in the fair value hierarchy. Credit risk is considered in the fair value calculation of the interest rate swap.

Available-for-sale securities are investments pledged as collateral for trust accounts related to NiSource’s wholly-owned insurance company. Available-for-sale securities are included within “Other investments” in the Condensed Consolidated Balance Sheets (unaudited). Securities classified within Level 1 include U.S. Treasury debt securities which are highly liquid and are actively traded in over-the-counter markets. NiSource values corporate and mortgage-backed debt securities using a matrix pricing model that incorporates market-based information. These securities trade less frequently and are classified within Level 2. Total gains and losses from available-for-sale securities are included in other comprehensive income (loss). The amortized cost, gross unrealized gains and losses, and fair value of available-for-sale debt securities at June 30, 2012 and December 31, 2011 were:

(in millions)	Amortized Cost		Total Gains		Total Losses			Fair Value
Available-for-sale debt securities, June 30, 2012
U.S. Treasury	$	34.2	$	1.7	$	-		$	35.9
Corporate/Other		62.1		2.1		(0.1	)		64.1
Total Available-for-sale debt securities	$	96.3	$	3.8	$	(0.1	)	$	100.0
(in millions)	Amortized Cost		Total Gains		Total Losses			Fair Value
Available-for-sale debt securities, December 31, 2011
U.S. Treasury	$	36.7	$	1.7	$	-		$	38.4
Corporate/Other		56.3		1.6		(0.3	)		57.6
Total Available-for-sale debt securities	$	93.0	$	3.3	$	(0.3	)	$	96.0

For the three months ended June 30, 2012 and 2011, the net realized gain on the sale of available-for-sale U.S. Treasury debt securities was $0.2 million. For the three months ended June 30, 2012 and 2011, the net realized gain on sale of available-for-sale Corporate/Other bond debt securities was zero and $0.5 million, respectively.

For the six months ended June 30, 2012 and 2011, the net realized gain on the sale of available-for-sale U.S. Treasury debt securities was $0.2 million and $0.3 million, respectively. For the six months ended June 30, 2012 and 2011, the net realized gain on sale of available-for-sale Corporate/Other bond debt securities was $0.1 million and $1.0 million, respectively.

The cost of maturities sold is based upon specific identification. At June 30, 2012, all of the U.S. Treasury debt securities have maturities of greater than one year. At June 30, 2012, approximately $3.1 million of Corporate/Other bonds have maturities of less than a year while the remaining securities have maturities of greater than one year.

The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for the six months ended June 30, 2012 and 2011:

Three Months Ended June 30, 2012 (in millions)	Other Derivatives
Balance as of April 1, 2012	$	0.1
Total gains or (losses) (unrealized/realized) Included in regulatory assets/liabilities		(0.4	)
Balance as of June 30, 2012	$	(0.3	)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2012	$	-

28

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Three Months Ended June 30, 2011 (in millions)	Other Derivatives
Balance as of April 1, 2011	$	(0.1	)
Total gains or losses (unrealized/realized)
Included in regulatory assets/liabilities		(0.6	)
Purchases		(0.5	)
Settlements		0.4
Balance as of June 30, 2011	$	(0.8	)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2011	$	(1.5	)
Six Months Ended, June 30, 2012 (in millions)	Other Derivatives
Balance as of January 1, 2012	$	0.3
Total gains or (losses) (unrealized/realized)
Included in regulatory assets/liabilities		(0.6	)
Balance as of June 30, 2012	$	(0.3	)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2012	$	-
Six Months Ended, June 30, 2011 (in millions)	Other Derivatives
Balance as of January 1, 2011	$	0.2
Total gains or losses (unrealized/realized)
Included in regulatory assets/liabilities		(1.0	)
Purchases		(1.0	)
Settlements		1.0
Balance as of June 30, 2011	$	(0.8	)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2011	$	(1.5	)

Non-recurring Fair Value Measurements. There were no significant non-recurring fair value measurements recorded during the six months ended June 30, 2012 and 2011.

B.         Other Fair Value Disclosures for Financial Instruments. NiSource has certain financial instruments that are not measured at fair value on a recurring basis but nevertheless are recorded at amounts that approximate fair value due to their liquid or short-term nature, including cash and cash equivalents, restricted cash, accounts receivable, notes receivable, accounts payable, customer deposits and short-term borrowings. NiSource’s long-term borrowings are recorded at historical amounts unless designated as a hedged item in a fair value hedge.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate fair value.

Long-term Debt. The fair values of these securities are estimated based on the quoted market prices for the same or similar issues or on the rates offered for securities of the same remaining maturities. Certain premium costs associated with the early settlement of long-term debt are not taken into consideration in determining fair value. These fair value measurements are classified as Level 2 within the fair value hierarchy. For the quarters ending June 30, 2012 and 2011, there were no changes in the method or significant assumptions used to estimate the fair value of the financial instruments.

29

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

The carrying amount and estimated fair values of financial instruments were as follows:

(in millions)	Carrying Amount as of June 30, 2012		Estimated Fair Value as of June 30, 2012		Carrying Amount as of Dec. 31, 2011		Estimated Fair Value as of Dec. 31, 2011
Long-term debt (including current portion)	$	7,573.8	$	8,491.0	$	6,594.4		$	7,369.4

11.    Transfers of Financial Assets

Transfers of accounts receivable are accounted for as secured borrowings resulting in the recognition of short-term borrowings on the Condensed Consolidated Balance Sheets (unaudited). The maximum amount of debt that can be recognized related to NiSource’s accounts receivable programs is $515 million.

All accounts receivable sold to the commercial paper conduits are valued at face value, which approximate fair value due to their short-term nature. The amount of the undivided percentage ownership interest in the accounts receivable sold is determined in part by required loss reserves under the agreements. Below is information about the accounts receivable securitization agreements entered into by NiSource’s subsidiaries.

On October 23, 2009, Columbia of Ohio entered into an agreement to sell, without recourse, substantially all of its trade receivables, as they originate, to CGORC, a wholly-owned subsidiary of Columbia of Ohio. CGORC, in turn, is party to an agreement with BTMU and RBS, also dated October 23, 2009, under the terms of which it sells an undivided percentage ownership interest in its accounts receivable to commercial paper conduits sponsored by BTMU and RBS. On October 21, 2011, the agreement was renewed with an amendment increasing the maximum seasonal program limit from $200 million to $240 million. The amended agreement expires on October 19, 2012, and can be renewed if mutually agreed to by all parties. As of June 30, 2012, $77.1 million of accounts receivable had been transferred by CGORC. CGORC is a separate corporate entity from NiSource and Columbia of Ohio, with its own separate obligations, and upon a liquidation of CGORC, CGORC’s obligations must be satisfied out of CGORC’s assets prior to any value becoming available to CGORC’s stockholder. Under the agreement, an event of termination occurs if NiSource’s debt rating is withdrawn by either Standard & Poor’s or Moody’s, or falls below BB- or Ba3 at either Standard & Poor’s or Moody’s, respectively.

On October 23, 2009, Northern Indiana entered into an agreement to sell, without recourse, substantially all of its trade receivables, as they originate, to NARC, a wholly-owned subsidiary of Northern Indiana. NARC, in turn, is party to an agreement with RBS, also dated October 23, 2009, under the terms of which it sells an undivided percentage ownership interest in its accounts receivable to a commercial paper conduit sponsored by RBS. The maximum seasonal program limit under the terms of the agreement is $200 million. On August 31, 2011, the agreement was renewed, having a new scheduled termination date of August 29, 2012, and can be further renewed if mutually agreed to by both parties. As of June 30, 2012, $106.1 million of accounts receivable had been transferred by NARC. NARC is a separate corporate entity from NiSource and Northern Indiana, with its own separate obligations, and upon a liquidation of NARC, NARC’s obligations must be satisfied out of NARC’s assets prior to any value becoming available to NARC’s stockholder. Under the agreement, an event of termination occurs if Northern Indiana’s debt rating is withdrawn by either Standard & Poor’s or Moody’s, or falls below BB or Ba2 at either Standard & Poor’s or Moody’s, respectively.

On March 15, 2010, Columbia of Pennsylvania entered into an agreement to sell, without recourse, substantially all of its trade receivables, as they originate, to CPRC, a wholly-owned subsidiary of Columbia of Pennsylvania. CPRC, in turn, is party to an agreement with BTMU, also dated March 15, 2010, under the terms of which it sells an undivided percentage ownership interest in its accounts receivable to a commercial paper conduit sponsored by BTMU. The maximum seasonal program limit under the terms of the agreement is $75 million. On March 13, 2012, the agreement was renewed, having a new scheduled termination date of March 12, 2013, and can be further renewed if mutually agreed to by both parties. As of June 30, 2012, $10.0 million of accounts receivable had been transferred by CPRC. CPRC is a separate corporate entity from NiSource and Columbia of Pennsylvania, with its own separate obligations, and upon a liquidation of CPRC, CPRC’s obligations must be satisfied out of CPRC’s assets prior to any value becoming available to CPRC’s stockholder. Under the agreement, an event of termination occurs if NiSource’s debt rating is withdrawn by either Standard & Poor’s or Moody’s, or falls below BB- or Ba3 at either Standard & Poor’s or Moody’s, respectively.

30

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

The following table reflects the gross and net receivables transferred as well as short-term borrowings related to the securitization transactions as of June 30, 2012 and December 31, 2011 for Columbia of Ohio, Northern Indiana and Columbia of Pennsylvania:

(in millions)	June 30, 2012		December 31, 2011
Gross Receivables	$	335.6	$	510.5
Less: Receivables not transferred		142.4		278.8
Net receivables transferred	$	193.2	$	231.7
Short-term debt due to asset securitization	$	193.2	$	231.7

For the three months ended June 30, 2012 and 2011, $0.9 million and $0.8 million of fees associated with the securitization transactions were recorded as interest expense, respectively. For the six months ended June 30, 2012 and 2011, $2.0 million and $2.3 million of fees associated with the securitization transactions were recorded as interest expense, respectively. Columbia of Ohio, Northern Indiana and Columbia of Pennsylvania remain responsible for collecting on the receivables securitized and the receivables cannot be sold to another party.

12. Goodwill Assets

NiSource tests its goodwill for impairment annually unless indicators, events, or circumstances would require an immediate review. Goodwill is tested for impairment at a level of reporting referred to as a reporting unit, which generally is an operating segment or a component of an operating segment as defined by GAAP. In accordance with GAAP, certain components of an operating segment with similar economic characteristics are aggregated and deemed a single reporting unit. Goodwill is generally allocated to the reporting units based upon the amounts allocated at the time of their respective acquisition. The goodwill impairment test is a two-step process which requires NiSource to make estimates regarding the fair value of the reporting unit. The first step of the goodwill impairment test compares the fair value of the reporting unit with its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step of the impairment test is not required. However, if the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss (if any), which compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of reporting unit goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess.

During the second quarter of 2012, NiSource changed its method of applying an accounting principle whereby the annual impairment test of goodwill will be performed as of May 1^st each year instead of June 30^th, the previous testing date. This change is preferable under the circumstances as it more closely aligns the impairment testing date with the long-range planning and forecasting process. The change also provides NiSource with additional time to complete the required testing and evaluate the results prior to the quarter-end closing and reporting activities when resources are more constrained. The change in the annual goodwill impairment testing date is not intended to nor does it delay, accelerate, or avoid an impairment charge. As it was impracticable to objectively determine projected cash flows and related valuation estimates as of each May 1 for periods prior to May 1, 2012, NiSource has prospectively applied the change in the annual goodwill impairment testing date from May 1, 2012.

NiSource has three reporting units that are allocated goodwill. NiSource’s goodwill assets at June 30, 2012 were $3.7 billion pertaining primarily to the acquisition of Columbia on November 1, 2000. Of this amount, approximately $2.0 billion is allocated to Columbia Transmission Operations and $1.7 billion is allocated to Columbia Distribution Operations. In addition, Northern Indiana Gas Distribution Operations’ goodwill assets at June 30, 2012 related to the purchase of Northern Indiana Fuel and Light in March 1993 and Kokomo Gas in February 1992 were $18.8 million.

31

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

In estimating the fair value of the Columbia Transmission Operations and Columbia Distribution Operations reporting units for the May 1, 2012 test, NiSource used a weighted average of the income and market approaches. The income approach utilized a discounted cash flow model. This model is based on management’s short-term and long-term forecast of operating performance for each reporting unit. The two main assumptions used in the models are the growth rates, which are based on the cash flows from operations for each of the reporting units, and the weighted average cost of capital, or discount rate. The starting point for each reporting unit’s cash flow from operations is the detailed five year plan, which takes into consideration a variety of factors such as the current economic environment, industry trends, and specific operating goals set by management. The discount rates are based on trends in overall market as well as industry specific variables and include components such as the risk-free rate, cost of debt, and company volatility at May 1, 2012. Under the market approach, NiSource utilized three market-based models to estimate the fair value of the reporting units: (i) the comparable company multiples method, which estimated fair value of each reporting unit by analyzing EBITDA multiples of a peer group of publicly traded companies and applying that multiple to the reporting unit’s EBITDA, (ii) the comparable transactions method, which valued the reporting unit based on observed EBITDA multiples from completed transactions of peer companies and applying that multiple to the reporting unit’s EBITDA, and (iii) the market capitalization method, which used the NiSource share price and allocated NiSource’s total market capitalization among both the goodwill and non-goodwill reporting units based on the relative EBITDA, revenues, and operating income of each reporting unit. Each of the three market approaches were calculated with the assistance of a third party valuation firm, using multiples and assumptions inherent in today’s market. The degree of judgment involved and reliability of inputs into each model were considered in weighting the various approaches. The resulting estimate of fair value of the reporting units, using the weighted average of the income and market approaches, exceeded their carrying values, indicating that no impairment exists under step 1 of the annual impairment test.

Certain key assumptions used in determining the fair values of the reporting units included planned operating results, discount rates and the long-term outlook for growth. NiSource used discount rates of 5.60% for both Columbia Transmission Operations and Columbia Distribution Operations, resulting in excess fair values of approximately $1,643 million and $1,682 million, respectively. The results of the impairment test indicated that each of the reporting units passed step 1 of the impairment test.

Goodwill at Northern Indiana Gas Distribution Operations related to the acquisition of Northern Indiana Fuel and Light and Kokomo Gas of $18.8 million was also tested for impairment as of May 1, 2012. The income approach was used to determine the fair value of the Northern Indiana Gas Distribution reporting unit. Key assumptions in the income approach were a discount rate of 5.60% and a growth rate based on the cash flow from operations. These cash flows factor in the regulatory environment and planned growth initiatives. The step 1 goodwill impairment test resulted in the fair value of the Northern Indiana Gas reporting unit to be above the carrying value by $356 million.

NiSource considered whether there were any events or changes in circumstances subsequent to the annual test that would reduce the fair value of any of the reporting units below their carrying amounts and necessitate another goodwill impairment test. No such indicators were noted that would require goodwill impairment testing subsequent to May 1, 2012.

13. Income Taxes

NiSource’s interim effective tax rates reflect the estimated annual effective tax rates for 2012 and 2011, adjusted for tax expense associated with certain discrete items. The effective tax rates for the three months ended June 30, 2012 and 2011 were 34.8% and 43.1%, respectively. The effective tax rates for the six months ended June 30, 2012 and 2011 were 34.8% and 36.2%, respectively. These effective tax rates differ from the Federal tax rate of 35% primarily due to the effects of tax credits, state income taxes, utility rate-making, and other permanent book-to-tax differences.

The decrease in the three and six month effective tax rates of 8.3% and 1.4%, respectively, in 2012 versus 2011 is due primarily to the 2011 enactment of Indiana tax legislation.

On May 12, 2011, the governor of Indiana signed into law House Bill 1004, which among other things, lowers the corporate income tax rate from 8.5% to 6.5% over four years beginning on July 1, 2012. The reduction in the tax rate will impact deferred income taxes and tax related regulatory assets and liabilities recoverable in the rate making

32

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

process. In addition, other deferred tax assets and liabilities, primarily deferred tax assets related to Indiana net operating loss carry forward, will be reduced to reflect the lower rate at which these temporary differences and tax benefits will be realized. In the second quarter 2011, NiSource recorded tax expense of $6.8 million to reflect the effect of this rate change.

On December 27, 2011, the United States Treasury Department and the IRS issued temporary and proposed regulations effective for years beginning on or after January 1, 2012 that, among other things, provided guidance on whether expenditures qualified as deductible repairs. In addition, on March 15, 2012, the IRS issued a directive to discontinue exam activity related to positions on this issue taken on original tax returns for years beginning before January 1, 2012. NiSource expects the IRS to issue guidance for the treatment of expenditures for gas transmission and distribution assets, and generation within the next twelve months. NiSource further expects that it will be more likely to adopt the procedures provided in this guidance rather than the more general rules set forth in the temporary and proposed regulations. Accordingly, NiSource management expects to adjust unrecognized tax benefits recorded in 2009 related to its change in tax accounting for repairs for gas transmission and distribution, assets and generation assets in the period specific guidance for these assets is issued. As noted above, NiSource management believes that the issuance of such guidance and intent to adopt the guidance by NiSource is reasonably possible to occur within the next twelve months. In that event, NiSource will adjust its unrecognized tax benefits for this issue in the amount of $80.9 million. NiSource believes these adjustments will not have a significant effect on the income statement.

On July 2, 2012, House Bill 761 was signed into law in Pennsylvania, which among other things, adopts a single-sales factor apportionment effective for tax years beginning on or after January 1, 2013. NiSource does not believe this adjustment will have a significant effect on net income.

There were no material changes recorded in the second quarter of 2012 to NiSource’s uncertain tax positions as of December 31, 2011.

14. Pension and Other Postretirement Benefits

NiSource provides defined contribution plans and noncontributory defined benefit retirement plans that cover its employees. Benefits under the defined benefit retirement plans reflect the employees’ compensation, years of service and age at retirement. Additionally, NiSource provides health care and life insurance benefits for certain retired employees. The majority of employees may become eligible for these benefits if they reach retirement age while working for NiSource. The expected cost of such benefits is accrued during the employees’ years of service. Current rates of rate-regulated companies include postretirement benefit costs, including amortization of the regulatory assets that arose prior to inclusion of these costs in rates. For most plans, cash contributions are remitted to grantor trusts.

For the six months ended June 30, 2012, NiSource has contributed $1.6 million to its pension plans and $23.3 million to its other postretirement benefit plans.

The following table provides the components of the plans’ net periodic benefits cost for the three and six months ended June 30, 2012 and 2011:

	Pension Benefits						Other Postretirement Benefits
Three Months Ended June 30, (in millions)	2012			2011			2012			2011
Components of Net Periodic Benefit Cost
Service cost	$	9.4		$	9.4		$	2.8		$	2.5
Interest cost		28.2			29.9			9.3			9.6
Expected return on assets		(41.1	)		(41.8	)		(6.7	)		(6.7	)
Amortization of transition obligation		-			-			0.3			0.3
Amortization of prior service cost		0.1			0.1			(0.1	)		(0.1	)
Recognized actuarial loss		20.3			13.9			2.4			1.7
Total Net Periodic Benefit Costs	$	16.9		$	11.5		$	8.0		$	7.3

33

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

	Pension Benefits						Other Postretirement Benefits
Six Months Ended June 30, (in millions)	2012			2011			2012			2011
Components of Net Periodic Benefit Cost
Service cost	$	18.8		$	18.8		$	5.6		$	5.0
Interest cost		56.4			59.8			18.6			19.2
Expected return on assets		(82.2	)		(83.6	)		(13.4	)		(13.4	)
Amortization of transition obligation		-			-			0.6			0.6
Amortization of prior service cost		0.2			0.2			(0.2	)		(0.2	)
Recognized actuarial loss		40.6			27.8			4.8			3.4
Total Net Periodic Benefit Costs	$	33.8		$	23.0		$	16.0		$	14.6

For the quarters ended June 30, 2012 and 2011, pension and other postretirement benefit cost of approximately $5.3 million and $1.7 million, respectively, was capitalized as a component of plant or recognized as a regulatory asset or liability consistent with regulatory orders for certain of NiSource’s regulated businesses. For the six months ended June 30, 2012 and 2011, pension and other postretirement benefit cost of approximately $10.9 million and $8.8 million, respectively, was capitalized as a component of plant or recognized as a regulatory asset or liability consistent with regulatory orders for certain of NiSource’s regulated businesses.

15. Variable Interests and Variable Interest Entities

In general, a VIE is an entity which (1) has an insufficient amount of at-risk equity to permit the entity to finance its activities without additional financial subordinated support provided by any parties, (2) whose at-risk equity owners, as a group, do not have power, through voting rights or similar rights, to direct activities of the entity that most significantly impact the entity’s economic performance or (3) whose at-risk owners do not absorb the entity’s losses or receive the entity’s residual return. A VIE is required to be consolidated by a company if that company is determined to be the primary beneficiary of the VIE.

NiSource consolidates those VIEs for which it is the primary beneficiary. NiSource considers quantitative and qualitative elements in determining the primary beneficiary. Qualitative measures include the ability to control an entity and the obligation to absorb losses or the right to receive benefits.

NiSource’s analysis includes an assessment of guarantees, operating leases, purchase agreements, and other contracts, as well as its investments and joint ventures. For items that have been identified as variable interests, or where there is involvement with an identified VIE, an in-depth review of the relationship between the relevant entities and NiSource is made to evaluate qualitative and quantitative factors to determine the primary beneficiary, if any, and whether additional disclosures would be required under the current standard.

At June 30, 2012, consistent with prior periods, NiSource consolidated its low income housing real estate investments from which NiSource derives certain tax benefits. As of June 30, 2012, NiSource is a 99% limited partner with a net investment of approximately $0.2 million. Consistent with prior periods, NiSource evaluated the nature and intent of the low income housing investments when determining the primary beneficiary. NiSource concluded that it continues to be the primary beneficiary. Subject to certain conditions precedent, NiSource has the contractual right to take control of the low income housing properties. At June 30, 2012, net assets of the low income housing real estate investments in continuing operations were $6.6 million. Current and non-current assets were $0.3 million and $6.3 million, respectively. As of June 30, 2012, NiSource has long-term debt of approximately $5.5 million as a result of consolidating these investments. However, this debt is nonrecourse to NiSource and NiSource’s direct and indirect subsidiaries. Approximately $0.4 million of the assets are restricted to settle the obligations of the entity.

Northern Indiana has a service agreement with Pure Air, a general partnership between Air Products and Chemicals, Inc. and First Air Partners LP, under which Pure Air provides scrubber services to reduce sulfur dioxide emissions for Units 7 and 8 at the Bailly Generating Station. Services under this contract commenced on July 1, 1992 and

34

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

expired on June 30, 2012. The agreement was renewed on June 29, 2012 for ten years and Northern Indiana will continue to pay for the services under a combination of fixed and variable charges. NiSource has made an exhaustive effort to obtain information needed from Pure Air to determine the status of Pure Air as a VIE. However, Northern Indiana had not been able to obtain this information and as a result, it is unclear whether Pure Air is a VIE and if Northern Indiana is the primary beneficiary. Northern Indiana will continue to request the information required to determine whether Pure Air is a VIE. Northern Indiana has no exposure to loss related to the service agreement with Pure Air and payments under this agreement were $10.7 million and $10.1 million for the six months ended June 30, 2012 and 2011, respectively.

16. Long-Term Debt

On June 14, 2012, NiSource Finance issued $250.0 million of 3.85% senior unsecured notes that mature on February 15, 2023 and $500.0 million of 5.25% senior unsecured notes that mature on February 15, 2043.

On April 5, 2012, NiSource Finance negotiated a $250.0 million three-year bank term loan with a syndicate of banks which matures on April 3, 2015. Borrowings under the term loan will have an effective cost of LIBOR plus 137 basis points.

17. Short-Term Borrowings

During June 2011, NiSource Finance implemented a new commercial paper program with a program limit of up to $500.0 million with a dealer group comprised of Barclays, Citigroup, Credit Suisse and Wells Fargo. Commercial paper issuances are supported by available capacity under NiSource’s $1.5 billion unsecured revolving credit facility, which expires in May 2017. At June 30, 2012, NiSource had $134.4 million of commercial paper outstanding.

During May 2012, NiSource Finance amended its existing $1.5 billion revolving credit facility with a syndicate of banks led by Barclays Capital extending the termination date to May 15, 2017 also reducing the borrowing costs under the facility. The purpose of the facility is to fund ongoing working capital requirements including the provision of liquidity support for NiSource’s commercial paper program, provide for issuance of letters of credit, and also for general corporate purposes. At June 30, 2012, NiSource had no outstanding borrowings under this facility.

As of June 30, 2012 and December 31, 2011, NiSource had $37.5 million of stand-by letters of credit outstanding, of which $19.2 million were under the revolving credit facility.

Transfers of accounts receivable are accounted for as secured borrowings resulting in the recognition of short-term debt on the Condensed Consolidated Balance Sheet in the amount of $193.2 million and $231.7 million as of June 30, 2012 and December 31, 2011, respectively. Refer to Note 11, “Transfers of Financial Assets,” for additional information.

(in millions)	June 30, 2012		December 31, 2011
Commercial Paper weighted average interest rate of 1.16% and 1.01% at June 30, 2012 and December 31, 2011, respectively.	$	134.4	$	402.7
Credit facilities borrowings weighted average interest rate of 1.99% at December 31, 2011.		-		725.0
Accounts receivable securitization facility borrowings		193.2		231.7
Total short-term borrowings	$	327.6	$	1,359.4

Given their turnover is less than 90 days, cash flows related to the borrowings and repayments of the items listed above are presented net in the Condensed Statements of Consolidated Cash Flows (unaudited).

35

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

18. Share-Based Compensation

The stockholders approved and adopted the NiSource Inc. 2010 Omnibus Incentive Plan (the “Omnibus Plan”), at the Annual Meeting of Stockholders held on May 11, 2010. The Omnibus Plan provides for awards to employees and non-employee directors of incentive and nonqualified stock options, stock appreciation rights, restricted stock and restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards. The Omnibus Plan provides that the number of shares of common stock of NiSource available for awards is 8,000,000 plus the number of shares subject to outstanding awards granted under either the 1994 Plan or the Director Plan (described below) that expire or terminate for any reason. No further awards are permitted to be granted under the prior 1994 Plan or the Director Plan. At June 30, 2012, there were 7,396,657 shares reserved for future awards under the Omnibus Plan.

Prior to May 11, 2010, NiSource issued long-term equity incentive grants to key management employees under a long-term incentive plan approved by stockholders on April 13, 1994 (“1994 Plan”). The types of equity awards previously authorized under the 1994 Plan did not significantly differ from those permitted under the Omnibus Plan.

NiSource recognized stock-based employee compensation expense of $4.1 million and $3.4 million for the three months ended June 30, 2012, and 2011, respectively, as well as related tax benefits of $1.4 million and $1.3 million. For the six months ended June 30, 2012, and 2011, stock-based employee compensation expense of $7.3 million and $6.4 million was recognized, respectively as well as related tax benefits of $2.5 million and $2.3 million, respectively.

As of June 30, 2012, the total remaining unrecognized compensation cost related to nonvested awards amounted to $23.8 million, which will be amortized over the weighted-average remaining requisite service period of 2.1 years.

Stock Options. As of June 30, 2012, approximately 1.8 million options were outstanding and exercisable with a weighted average strike price of $22.00. No options were granted during the six months ended June 30, 2012 and 2011. As of June 30, 2012, the aggregate intrinsic value for the options outstanding and exercisable was $5.0 million. During the six months ended June 30, 2012 and 2011, cash received from the exercise of options was $21.8 million and $0.3 million, respectively.

Restricted Awards. During the six months ended June 30, 2012, NiSource granted restricted stock units and shares of restricted stock of 180,816, subject to service conditions. The total grant date fair value of the shares of restricted stock and restricted stock units was $4.0 million, based on the average market price of NiSource’s common stock at the date of each grant less the present value of any dividends not received during the vesting period, which will be expensed, net of forfeitures, over the vesting period which is generally three years. If the employee terminates employment before the service conditions lapse due to (1) Retirement or Disability (as defined in the award agreement), or (2) death, the employment conditions will lapse with respect to a pro rata portion of the shares of restricted stock and restricted stock units on the date of termination. In the event of a Change-in-Control (as defined in the award agreement), all unvested shares of restricted stock and restricted stock units will immediately vest. Termination due to any other reason will result in all shares of restricted stock and restricted stock units awarded being forfeited effective on the employee’s date of termination. As of June 30, 2012, 554,028 nonvested shares (all of which are expected to vest) of restricted stock and restricted stock units were granted and outstanding.

Performance Shares. During the six months ended June 30, 2012, NiSource granted 749,601 performance shares subject to performance conditions. The grant date fair-value of the awards was $15.5 million, based on the average market price of NiSource’s common stock at the date of each grant less the present value of dividends not received during the vesting period which will be expensed, net of forfeitures, over the three year requisite service period. The performance conditions are based on achievement of two non-GAAP financial measures: cumulative net operating earnings, that NiSource defines as income from continuing operations adjusted for certain items; and cumulative funds from operations that NiSource defines as net operating cash flows provided by continuing operations; and relative total shareholder return that NiSource defines as the annualized growth in the dividends and share price of a share of NiSource’s common stock (calculated using a 20 trading day average of NiSource’s closing price beginning December 31, 2011 and ending on December 31, 2014) compared to the total shareholder return performance of a predetermined peer group of companies. The service conditions lapse on January 30, 2015 when the shares vest provided the performance criteria are satisfied. In general, if the employee terminates employment before January 30,

36

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

2015 due to (1) Retirement or Disability (as defined in the award agreement), or (2) death, the employment conditions will lapse with respect to a pro rata portion of the performance shares payable at target on the date of termination provided the performance criteria are met. In the event of a Change-in-Control (as defined in the award agreement), all unvested performance shares will immediately vest. Termination due to any other reason will result in all performance shares awarded being forfeited effective on the employee’s date of termination. As of June 30, 2012, 1,996,841 nonvested performance shares were granted and outstanding.

Non-employee Director Awards. As of May 11, 2010, awards to non-employee directors may be made only under the Omnibus Plan. Currently, restricted stock units are granted annually to non-employee directors, subject to a non-employee director’s election to defer receipt of such restricted stock unit award. The non-employee director’s restricted stock units vest on the last day of the non-employee director’s annual term corresponding to the year the restricted stock units were awarded subject to special pro-rata vesting rules in the event of Retirement or Disability (as defined in the award agreement), or death. The vested restricted stock units are payable as soon as practicable following vesting except as otherwise provided pursuant to the non-employee director’s election to defer. As of June 30, 2012, 132,537 restricted stock units are outstanding to non-employee directors under the Omnibus Plan.

Only restricted stock units remain outstanding under the prior plan for non-employee directors, the Amended and Restated Non-employee Director Stock Incentive Plan (the “Director Plan”). All such awards are fully vested and shall be distributed to the directors upon their separation from the Board. As of June 30, 2012, 240,180 restricted stock units remain outstanding under the Director Plan and as noted above no further shares may be awarded under the Director Plan.

401(k) Match, Profit Sharing and Company Contribution. NiSource has a voluntary 401(k) savings plan covering eligible employees that allows for periodic discretionary matches as a percentage of each participant’s contributions in newly issued shares of common stock. NiSource also has a retirement savings plan that provides for discretionary profit sharing contributions of shares of common stock to eligible employees based on earnings results; and eligible exempt employees hired after January 1, 2010, receive a non-elective company contribution of three percent of eligible pay in shares of common stock. For the quarter ended June 30, 2012 and 2011, NiSource recognized 401(k) match, profit sharing and non-elective contribution expense of $6.9 million and $5.2 million, respectively. For the six months ended June 30, 2012 and 2011, NiSource recognized 401(k) match, profit sharing and non-elective contribution expense of $12.7 million and $9.1 million, respectively.

19. Other Commitments and Contingencies

A. Guarantees and Indemnities. As a part of normal business, NiSource and certain subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of certain subsidiaries. Such agreements include guarantees and stand-by letters of credit. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the subsidiaries’ intended commercial purposes. The total guarantees and indemnities in existence at June 30, 2012 and the years in which they expire were:

(in millions)	Total		2012		2013		2014		2015		2016		After
Guarantees of subsidiaries debt	$	7,120.9	$	315.0	$	420.3	$	500.0	$	480.0	$	291.6	$	5,114.0
Guarantees supporting commodity transactions of subsidiaries		140.9		44.5		14		0.5		80.0		-		1.9
Accounts receivable securitization		193.2		193.2		-		-		-		-		-
Lines of credit		134.4		134.4		-		-		-		-		-
Letters of credit		37.5		28.4		8.1		1.0		-		-		-
Other guarantees		310.4		33.0		223.7		32.2		3.0		-		18.5
Total commercial commitments	$	7,937.3	$	748.5	$	666.1	$	533.7	$	563.0	$	291.6	$	5,134.4

37

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Guarantees of Subsidiaries Debt. NiSource has guaranteed the payment of $7.1 billion of debt for various wholly-owned subsidiaries including NiSource Finance and Columbia of Massachusetts, and through a support agreement, Capital Markets, which is reflected on NiSource’s Condensed Consolidated Balance Sheets (unaudited). The subsidiaries are required to comply with certain covenants under the debt indenture and in the event of default, NiSource would be obligated to pay the debt’s principal and related interest. NiSource does not anticipate its subsidiaries will have any difficulty maintaining compliance. On October 3, 2011, NiSource executed a Second Supplemental Indenture to the original Columbia of Massachusetts Indenture dated April 1, 1991, for the specific purpose of guaranteeing Columbia of Massachusetts’ outstanding medium-term notes.

Guarantees Supporting Commodity Transactions of Subsidiaries. NiSource has issued guarantees, which support up to $140.9 million of commodity-related payments for its current subsidiaries involved in energy marketing activities. These guarantees were provided to counterparties in order to facilitate physical and financial transactions involving natural gas services. To the extent liabilities exist under the commodity-related contracts subject to these guarantees, such liabilities are included in the Condensed Consolidated Balance Sheets (unaudited).

Lines and Letters of Credit and Accounts Receivable Advances. During May 2012, NiSource Finance amended its existing $1.5 billion revolving credit facility with a syndicate of banks led by Barclays Capital, extending the termination date to May 15, 2017 also reducing the borrowing costs under the facility. The purpose of the facility is to fund ongoing working capital requirements including the provision of liquidity support for NiSource’s commercial paper program, provide for the issuance of letters of credit, and also for general corporate purposes. At June 30, 2012, NiSource had no borrowings under its five-year revolving credit facility, $134.4 million in commercial paper outstanding and $193.2 million outstanding under its accounts receivable securitization agreements. At June 30, 2012, NiSource issued stand-by letters of credit of approximately $37.5 million for the benefit of third parties. See Note 17, “Short-Term Borrowings,” for additional information.

Other Guarantees or Obligations. On June 30, 2008, NiSource’s subsidiary, PEI, sold Whiting Clean Energy to BPAE for $216.7 million which included $16.1 million in working capital. The agreement with BPAE contains representations, warranties, covenants and closing conditions. NiSource has executed purchase and sales agreement guarantees totaling $220 million which guarantee performance of PEI’s covenants, agreements, obligations, liabilities, representations and warranties under the agreement with BPAE. No amounts related to the purchase and sales agreement guarantees are reflected in the Condensed Consolidated Balance Sheet (unaudited) as of June 30, 2012. These guarantees are due to expire in June 2013.

NiSource has additional purchase and sales agreement guarantees totaling $30.0 million, which guarantee performance of the seller’s covenants, agreements, obligations, liabilities, representations and warranties under the agreements. No amounts related to the purchase and sales agreement guarantees are reflected in the Condensed Consolidated Balance Sheets (unaudited). Management believes that the likelihood NiSource would be required to perform or otherwise incur any significant losses associated with any of the aforementioned guarantees is remote.

In connection with Millennium’s refinancing of its long-term debt in August 2010, NiSource provided a letter of credit to Union Bank N.A., as Collateral Agent for deposit into a debt service reserve account as required under the Deposit and Disbursement Agreement governing the Millennium notes offering. This account is to be drawn upon by the note holders in the event that Millennium is delinquent on its principal and interest payments. The value of NiSource’s letter of credit represents 47.5% (NiSource’s ownership percentage in Millennium) of the Debt Service Reserve Account requirement, or $16.2 million. The total exposure for NiSource is $16.2 million. NiSource has an accrued liability of $1.5 million related to the inception date fair value of this guarantee as of June 30, 2012.

NiSource has issued other guarantees supporting derivative related payments associated with interest rate swap agreements issued by NiSource Finance, operating leases for many of its subsidiaries and for other agreements entered into by its current and former subsidiaries.

B.        Other Legal Proceedings. In the normal course of its business, NiSource and its subsidiaries have been named as defendants in various legal proceedings. In the opinion of management, the ultimate disposition of these currently asserted claims will not have a material impact on NiSource’s consolidated financial statements.

38

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

C.    Environmental Matters.

NiSource operations are subject to environmental statutes and regulations related to air quality, water quality, hazardous waste and solid waste. NiSource believes that it is in substantial compliance with those environmental regulations currently applicable to its operations and believes that it has all necessary permits to conduct its operations.

It is management’s continued intent to address environmental issues in cooperation with regulatory authorities in such a manner as to achieve mutually acceptable compliance plans. However, there can be no assurance that fines and penalties will not be incurred. Management expects a significant portion of environmental assessment and remediation costs to be recoverable through rates for certain NiSource companies.

As of June 30, 2012 and December 31, 2011, NiSource had recorded reserves of approximately $168.0 million and $173.5 million, respectively, to cover environmental remediation at various sites. The current portion of this reserve is included in Legal and Environmental Reserves in the Condensed Consolidated Balance Sheet. The noncurrent portion is included in Other Noncurrent Liabilities in the Condensed Consolidated Balance Sheet. NiSource accrues for costs associated with environmental remediation obligations when the incurrence of such costs is probable and the amounts can be reasonably estimated. The original estimates for cleanup can differ materially from the amount ultimately expended. The actual future expenditures depend on many factors, including currently enacted laws and regulations, the nature and extent of contamination, the method of cleanup, and the availability of cost recovery from customers. These expenditures are not currently estimable at some sites. NiSource periodically adjusts its reserves as information is collected and estimates become more refined.

Air

The actions listed below could require further reductions in emissions from various emission sources. NiSource will continue to closely monitor developments in these matters.

Climate Change.   Future legislative and regulatory programs could significantly restrict emissions of GHGs or could impose a cost or tax on GHG emissions. Recently, proposals have been developed to implement Federal, state and regional GHG programs and to create renewable energy standards.

In the first quarter of 2012, EPA proposed an output-based carbon standard for new power plants. The standard would, for the first time, set national limits on the amount of carbon emissions allowed from new power plants. This numerical limit places compliance out of reach for coal-fired plants designed without capture and sequestration of carbon dioxide, limiting NiSource’s options for future generation growth. In addition, based on authority provided by the Clean Air Act, once the EPA has promulgated a New Source Performance Standard for a new or modified source in a specific source category, regulation of existing sources in specific circumstances is required.

If the EPA develops a GHG new source performance standard for existing units or if a Federal or state comprehensive climate change bill were to be enacted into law, the impact on NiSource’s financial performance would depend on a number of factors, including the overall level of required GHG reductions, the renewable energy targets, the degree to which offsets may be used for compliance, the amount of recovery allowed from customers, and the extent to which NiSource would be entitled to receive CO2 allowances at no cost. Comprehensive Federal or state GHG regulation could result in additional expense or compliance costs that may not be fully recoverable from customers and could materially impact NiSource’s financial results.

National Ambient Air Quality Standards.   The CAA requires EPA to set national air quality standards for particulate matter and five other pollutants (the NAAQS) considered harmful to public health and the environment. Periodically EPA imposes new or modifies existing NAAQS. States that contain areas that do not meet the new or revised standards must take steps to maintain or achieve compliance with the standards. These steps could include additional pollution controls on boilers, engines, turbines, and other facilities owned by electric generation, gas distribution, and gas transmission operations.

39

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

The following NAAQS were recently added or modified:

Particulate Matter:   In 2006, the EPA issued revisions to the NAAQS for particulate matter. The final rule (1) increased the stringency of the current fine particulate (PM2.5) standard, (2) added a new standard for inhalable coarse particulate (particulate matter between 10 and 2.5 microns in diameter), and (3) revoked the annual standards for coarse particulate (PM10) while retaining the 24-hour PM10 standards. These actions were challenged in a case before the DC Court of Appeals, American Farm Bureau Federation et al. v. EPA. In 2009, the appeals court granted portions of the plaintiffs’ petitions challenging the fine particulate standards but denied portions of the petitions challenging the standards for coarse particulate. State plans implementing the new standard for inhalable coarse particulate and the modified 24-hour standard for fine particulate are expected in 2012. The annual and secondary PM2.5 standards have been remanded to the EPA for reconsideration. Northern Indiana will continue to monitor this matter and cannot estimate the impact of any new rules at this time.

Ozone (eight hour):   On September 2, 2011, the EPA announced it would implement its 2008 eight-hour ozone NAAQS rather than tightening the standard in 2012. The EPA will review, and possibly revise, the standard in 2013 consistent with CAA requirements. In addition, the EPA has proposed to re-designate the Chicago metropolitan area, including the areas in which Northern Indiana operates three of its electric generation facilities, as non-attainment for ozone. Northern Indiana will continue to monitor this matter and cannot estimate the impact of any new rules at this time.

Nitrogen Dioxide (NO2):   The EPA revised the NO2 NAAQS by adding a one-hour standard while retaining the annual standard. The new standard could impact some NiSource combustion sources. EPA will designate areas that do not meet the new standard beginning in 2012. States with areas that do not meet the standard will need to develop rules to bring areas into compliance within five years of designation. Additionally, under certain permitting circumstances emissions from some existing NiSource combustion sources may need to be assessed and compared to the revised NO2 standards before areas are designated. Petitions challenging the rule have been filed by various parties. NiSource will continue to monitor this matter and cannot estimate the impact of these rules at this time.

National Emission Standard for Hazardous Air Pollutants.   On August 20, 2010, the EPA revised national emission standards for hazardous air pollutants for certain stationary reciprocating internal combustion engines. Compliance requirements vary by engine type and will generally be required within three years. NiSource is continuing its evaluation of the cost impacts of the final rule and estimates the cost of compliance to be $20 - $25 million.

Waste

NiSource subsidiaries are potentially responsible parties at waste disposal sites under the CERCLA (commonly known as Superfund) and similar state laws. Additionally, a program has been instituted to identify and investigate former MGP sites where Gas Distribution Operations subsidiaries or predecessors may have liability. The program has identified 67 such sites where liability is probable. Remedial actions at many of these sites are being overseen by state or federal environmental agencies through consent agreements or voluntary remediation agreements.

During the fourth quarter of 2011, NiSource completed a probabilistic model to estimate its future remediation costs related to its MGP sites. The model was prepared by a third party and incorporates NiSource and general industry experience with remediating MGP sites. NiSource accordingly increased its liability for estimated remediation costs by $71.1 million. Since the fourth quarter of 2011, NiSource has monitored the liability on a quarterly basis and in the second quarter of 2012, completed an annual refresh of the model. No material changes to the liability were noted as a result of the refresh. The total liability at NiSource related to the facilities subject to remediation was $136.1 million and $139.5 million at June 30, 2012 and December 31, 2011, respectively. The liability represents NiSource’s best estimate of the probable cost to remediate the facilities. NiSource believes that it is reasonably possible that remediation costs could vary by as much as $25 million in addition to the costs noted above. Remediation costs are estimated based on the best available information, applicable remediation standards at the balance sheet date, and experience with similar facilities.

40

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Additional Issues Related to Individual Business Segments

The sections below describe various regulatory actions that affect Gas Transmission and Storage Operations, Electric Operations, and certain other discontinued operations for which NiSource has retained a liability.

Gas Transmission and Storage Operations.

Waste

Columbia Transmission continues to conduct characterization and remediation activities at specific sites under a 1995 AOC (subsequently modified in 1996 and 2007). The 1995 AOC originally covered 245 major facilities, approximately 13,000 liquid removal points, approximately 2,200 mercury measurement stations and about 3,700 storage well locations. As a result of the 2007 amendment, approximately 50 facilities remain subject to the terms of the AOC. During the third quarter of 2011, Columbia Transmission completed a study to estimate its future remediation requirements related to the AOC. Columbia Transmission accordingly increased its liability for estimated remediation costs by $25.6 million. Since the third quarter of 2011, Columbia Transmission has been monitoring its liability on a quarterly basis and performed an annual refresh of the study during the second quarter of 2012. An additional $3.5 million was added to the liability due to estimate changes and cost increases as a result of the refresh. The total liability at Columbia Transmission related to the facilities subject to remediation was $28.4 million and $30.0 million at June 30, 2012 and December 31, 2011, respectively. The liability represents Columbia Transmission’s best estimate of the cost to remediate the facilities or manage the site until retirement. Remediation costs are estimated based on the information available, applicable remediation standards, and experience with similar facilities. Columbia Transmission expects that the remediation for these facilities will be completed in 2015.

One of the facilities subject to the 1995 AOC is the Majorsville Operations Center, which was remediated under an EPA approved Remedial Action Work Plan in summer 2008. Pursuant to the Remedial Action Work Plan, Columbia Transmission completed a project that stabilized residual oil contained in soils at the site and in sediments in an adjacent stream. Columbia Transmission continues to monitor the site subject to EPA oversight. On April 23, 2009, PADEP issued an NOV to Columbia Transmission, alleging that the remediation did not fully address the contamination. The NOV asserts violations of the Pennsylvania Clean Streams Law and the Pennsylvania Solid Waste Management Act and includes a proposed penalty of $1 million. Columbia Transmission is unable to estimate the likelihood or cost of potential penalties or additional remediation at this time.

Electric Operations.

Air

Northern Indiana expects to become subject to a number of new air-quality mandates in the next several years. These mandates may require Northern Indiana to make capital improvements to its electric generating stations. The cost of capital improvements is estimated to be $925 million to $1.05 billion. This figure includes additional capital improvements associated with the New Source Review Consent Decree, CSAPR and the Utility Mercury and Air Toxics Standards Rule. Northern Indiana believes that the capital costs will likely be recoverable from ratepayers.

Sulfur dioxide: On December 8, 2009, the EPA revised the SO₂ NAAQS by adopting a new 1-hour primary NAAQS for SO₂. EPA expects to designate areas that do not meet the new standard by mid-2012. States with such areas would have until 2014 to develop attainment plans with compliance required by 2017. Northern Indiana will continue to monitor developments in these matters but does not anticipate a material impact.

Cross-State Air Pollution Rule / Clean Air Interstate Rule (CAIR) / Transport Rule: On July 6, 2011, the EPA announced its replacement for the 2005 CAIR to reduce the interstate transport of fine particulate matter and ozone. The CSAPR reduces overall emissions of SO₂ and NO_x by setting state-wide caps on power plant emissions. The CSAPR limits emissions, including Northern Indiana’s, with restricted emission allowance trading programs scheduled to begin in 2012. In a decision issued on December 30, 2011, the D.C. Circuit Court stayed the CSAPR and reinstated the CAIR trading program provisions and requirements, including reissuing CAIR emission allowances, pending resolution of the stay. This development does not significantly impact Northern Indiana’s current emissions control plans. Northern Indiana utilizes the inventory model in accounting for emission allowances issued under the CAIR program whereby these allowances were recognized at zero cost upon receipt from the EPA. Northern Indiana believes its current multi-pollutant compliance plan and New Source Review Consent Decree capital investments will allow Northern Indiana to meet the emission requirements of CSAPR whenever final resolution of the appeal is reached.

41

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Utility Mercury and Air Toxics Standards Rule:   On February 8, 2008, the United States Court of Appeals for the District of Columbia Circuit vacated two EPA rules that are the basis for the Indiana Air Pollution Control Board’s Clean Air Mercury Rule (CAMR) that established utility mercury emission limits in two phases (2010 and 2018) and a cap-and-trade program to meet those limits. In response to the vacatur, the EPA pursued a new Section 112 rulemaking to establish MACT standards for electric utilities. The EPA finalized the Mercury and Air Toxics Standards (MATS) Rule on December 16, 2011. Compliance for Northern Indiana’s affected units will be required in early 2015, with the possibility of a one year extension. Northern Indiana is currently developing a plan for further environmental controls to comply with MATS.

New Source Review:   On September 29, 2004, the EPA issued an NOV to Northern Indiana for alleged violations of the CAA and the Indiana SIP. The NOV alleged that modifications were made to certain boiler units at three of Northern Indiana’s generating stations between the years 1985 and 1995 without obtaining appropriate air permits for the modifications. Northern Indiana, EPA, the Department of Justice, and IDEM have settled the matter through a consent decree.

Water

The Phase II Rule of the Clean Water Act Section 316(b), which requires all large existing steam electric generating stations to meet certain performance standards to reduce the effects on aquatic organisms at their cooling water intake structures, became effective on September 7, 2004. Under this rule, stations will either have to demonstrate that the performance of their existing fish protection systems meet the new standards or develop new systems, such as a closed-cycle cooling tower. Various court challenges and EPA responses ensued. The EPA announced a proposed rule and is obligated to finalize a rule in 2013. Northern Indiana will continue to monitor this matter but cannot estimate the cost of compliance at this time.

Waste

On March 31, 2005, the EPA and Northern Indiana entered into an AOC under the authority of Section 3008(h) of the RCRA for the Bailly Station. The order requires Northern Indiana to identify the nature and extent of releases of hazardous waste and hazardous constituents from the facility. Northern Indiana must also remediate any release of hazardous constituents that present an unacceptable risk to human health or the environment. The process to complete investigation and select appropriate remediation activities is ongoing.

On June 21, 2010, EPA published a proposed rule for CCRs through the RCRA. The proposal outlines multiple regulatory approaches that EPA is considering. These proposed regulations could negatively affect Northern Indiana’s ongoing byproduct reuse programs and would impose additional requirements on its management of coal combustion residuals. Northern Indiana will continue to monitor developments in this matter and cannot estimate the cost of compliance at this time.

Other Operations.

Waste

NiSource affiliates have retained environmental liabilities, including cleanup liabilities associated with some of its former operations. Four sites are associated with its former propane operations and ten sites associated with former petroleum operations. At one of those sites, an AOC has been signed with EPA to address petroleum residue in soil and groundwater.

42

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

20. Accumulated Other Comprehensive Loss

The following table displays the components of Accumulated Other Comprehensive Loss.

(in millions)	June 30, 2012			December 31, 2011
Other comprehensive income (loss), before tax:
Unrealized gains on securities	$	3.7		$	8.0
Tax expense on unrealized gains on securities		(1.3	)		(3.1	)
Unrealized losses on cash flow hedges		(49.2	)		(52.3	)
Tax benefit on unrealized losses on cash flow hedges		19.3			20.5
Unrecognized pension and OPEB costs		(50.9	)		(53.0	)
Tax benefit on unrecognized pension and OPEB costs		19.4			20.2
Total Accumulated Other Comprehensive Loss, net of taxes	$	(59.0	)	$	(59.7	)

Equity Investment

As an equity method investment, NiSource is required to recognize a proportional share of Millennium’s OCI. The remaining unrealized loss at June 30, 2012 of $19.2 million, net of tax, related to terminated interest rate swaps is being amortized over the period ending June 2025 into earnings using the effective interest method through interest expense as interest payments are made by Millennium. The unrealized loss of $19.2 million and $19.7 million at June 30, 2012 and December 31, 2011, respectively, is included in unrealized losses on cash flow hedges above.

21. Business Segment Information

Operating segments are components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. The NiSource Chief Executive Officer is the chief operating decision maker.

At June 30, 2012, NiSource’s operations are divided into three primary business segments. The Gas Distribution Operations segment provides natural gas service and transportation for residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana and Massachusetts. The Gas Transmission and Storage Operations segment offers gas transportation and storage services for LDCs, marketers and industrial and commercial customers located in northeastern, mid-Atlantic, midwestern and southern states. The Electric Operations segment provides electric service in 20 counties in the northern part of Indiana.

43

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

The following table provides information about business segments. NiSource uses operating income as its primary measurement for each of the reported segments and makes decisions on finance, dividends and taxes at the corporate level on a consolidated basis. Segment revenues include intersegment sales to affiliated subsidiaries, which are eliminated in consolidation. Affiliated sales are recognized on the basis of prevailing market, regulated prices or at levels provided for under contractual agreements. Operating income is derived from revenues and expenses directly associated with each segment.

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2012			2011			2012			2011
REVENUES
Gas Distribution Operations
Unaffiliated (1)	$	452.2		$	629.7		$	1,521.3		$	2,214.5
Intersegment		0.1			0.2			0.3			0.9
Total		452.3			629.9			1,521.6			2,215.4
Gas Transmission and Storage Operations
Unaffiliated		209.5			200.5			442.5			413.9
Intersegment		31.5			33.0			73.9			75.0
Total		241.0			233.5			516.4			488.9
Electric Operations
Unaffiliated		378.7			350.8			733.1			699.0
Intersegment		0.2			0.2			0.4			0.4
Total		378.9			351.0			733.5			699.4
Corporate and Other
Unaffiliated (2)		8.3			47.3			10.5			132.5
Intersegment		115.3			122.2			226.0			232.7
Total		123.6			169.5			236.5			365.2
Eliminations		(147.1	)		(155.6	)		(300.6	)		(309.0	)
Consolidated Revenues	$	1,048.7		$	1,228.3		$	2,707.4		$	3,459.9
Operating Income (Loss)
Gas Distribution Operations	$	46.9		$	46.6		$	258.9		$	288.1
Gas Transmission and Storage Operations		91.5			84.6			230.1			203.0
Electric Operations		70.4			40.3			116.6			90.9
Corporate and Other		(0.2	)		(6.0	)		2.4			(10.1	)
Consolidated Operating Income	$	208.6		$	165.5		$	608.0		$	571.9

⁽¹⁾With the implementation of the standard choice offer, Columbia of Ohio reported lower gross revenues and cost of sales beginning April 1, 2012. There was no impact on net revenues.

⁽²⁾The reduction to other revenues is attributed to the continued wind down of the unregulated natural gas marketing business as well as the early termination of certain contracts as discussed in Note 9, “Risk Management Activities.” There was a corresponding decrease in cost of sales with no impact to operating income.

44

ITEM 1. FINANCIAL STATEMENTS (continued)

NISOURCE INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

22. Supplemental Cash Flow Information

The following table provides additional information regarding NiSource’s Condensed Statements of Consolidated Cash Flows (unaudited) for the six months ended June 30, 2012 and 2011:

Six Months Ended June 30, (in millions)	2012		2011
Supplemental Disclosures of Cash Flow Information
Non-cash transactions:
Capital expenditures included in current liabilities	$	105.6	$	65.1
Stock issuance to employee saving plans		12.4		10.8
Schedule of interest and income taxes paid:
Cash paid for interest, net of interest capitalized amounts	$	197.2	$	180.0
Cash paid for income taxes		7.0		4.7

45

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

NISOURCE INC.

Note regarding forward-looking statements

The Management’s Discussion and Analysis, including statements regarding market risk sensitive instruments, contains “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Investors and prospective investors should understand that many factors govern whether any forward-looking statement contained herein will be or can be realized. Any one of those factors could cause actual results to differ materially from those projected. These forward-looking statements include, but are not limited to, statements concerning NiSource’s plans, objectives, expected performance, expenditures and recovery of expenditures through rates, stated on either a consolidated or segment basis, and any and all underlying assumptions and other statements that are other than statements of historical fact. From time to time, NiSource may publish or otherwise make available forward-looking statements of this nature. All such subsequent forward-looking statements, whether written or oral and whether made by or on behalf of NiSource, are also expressly qualified by these cautionary statements. All forward-looking statements are based on assumptions that management believes to be reasonable; however, there can be no assurance that actual results will not differ materially.

Realization of NiSource’s objectives and expected performance is subject to a wide range of risks and can be adversely affected by, among other things, weather, fluctuations in supply and demand for energy commodities, growth opportunities for NiSource’s businesses, increased competition in deregulated energy markets, the success of regulatory and commercial initiatives, dealings with third parties over whom NiSource has no control, actual operating experience of NiSource’s assets, the regulatory process, regulatory and legislative changes, the impact of potential new environmental laws or regulations, the results of material litigation, changes in pension funding requirements, changes in general economic, capital and commodity market conditions, counterparty credit risk, and the matters set forth in the “Risk Factors” section of NiSource’s 2011 Form 10-K, which many of are beyond the control of NiSource. In addition, the relative contributions to profitability by each segment, and the assumptions underlying the forward-looking statements relating thereto, may change over time. NiSource expressly disclaims a duty to update any of the forward-looking statements contained in this report.

The following Management’s Discussion and Analysis should be read in conjunction with NiSource’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

CONSOLIDATED REVIEW

Executive Summary

NiSource (the “Company”) is an energy holding company under the Public Utility Holding Company Act of 2005 whose subsidiaries are engaged in the transmission, storage and distribution of natural gas in the high-demand energy corridor stretching from the Gulf Coast through the Midwest to New England and the generation, transmission and distribution of electricity in Indiana. NiSource generates virtually 100% of its operating income through these rate-regulated businesses. A significant portion of NiSource’s operations are subject to seasonal fluctuations in sales. During the heating season, which is primarily from November through March, net revenues from gas sales are more significant, and during the cooling season, which is primarily from June through September, net revenues from electric sales and transportation services are more significant than in other months.

For the six months ended June 30, 2012, NiSource reported income from continuing operations of $264.0 million, or $0.93 per basic share, compared to $249.9 million, or $0.89 per basic share reported for the same period in 2011.

The increase in income from continuing operations was due primarily to the following items:

• Electric Operations’ net revenues increased $61.2 million primarily due to the implementation of the electric rate case. Refer to Note 8, “Regulatory Matters,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for more information.

• Regulatory and service programs at Gas Distributions Operations increased net revenues by $20.1 million primarily due to the rate case at Columbia of Pennsylvania and the implementation of rates under Columbia of Ohio’s approved infrastructure replacement program. Refer to Note 8, “Regulatory Matters,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for more information.

46

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (continued)

NISOURCE INC.

• Higher demand margin revenues at Gas Transmission and Storage Operations increased net revenues by $14.5 million primarily due to growth projects placed into service in the prior year. Refer below and to the Gas Transmission and Storage Operations segment discussion for a list of growth projects.

• Equity earnings increased by $10.9 million compared to the prior year, primarily from increased earnings at Millennium. Refer to the Gas Transmission and Storage Operations segment discussion for more information regarding Millennium.

These increases were partially offset by the following:

• Warmer weather in the current quarter resulted in a decrease in income from continuing operations of $42.9 million compared to the prior year, primarily affecting the Gas Distribution Operations segment. Weather statistics are provided in the Gas Distribution Operations’ segment discussion.

• Depreciation and amortization increased $25.3 million due primarily to higher capital expenditures and the additional depreciation related to the Sugar Creek facility due to the expiration of the deferral as a result of the electric rate case. NiSource’s capital expenditures are projected to be approximately $1.4 billion in 2012.

• NiSource incurred higher interest expense of $22.3 million resulting from the issuance of long-term debt of $750.0 million in June 2012, $400.0 million in June 2011 and $500.0 million in November 2011, and the expiration of the Sugar Creek deferral. These increases were partially offset by the repurchase of $125.3 million of the 2016 and $124.7 million of the 2013 notes in November 2011 and lower short-term borrowings and rates.

These factors and other impacts to the financial results are discussed in more detail within the following discussions of “Results of Operations” and “Results and Discussion of Segment Operations.”

Platform for Growth

NiSource’s business plan will continue to center on commercial and regulatory initiatives; commercial growth and expansion of the gas transmission and storage business; financial management of the balance sheet; and cost and process excellence.

Commercial and Regulatory Initiatives

NiSource is moving forward on regulatory initiatives across several distribution company markets. Whether through full rate case filings or other approaches, NiSource’s goal is to develop strategies that benefit all stakeholders as it addresses changing customer conservation patterns, develops more contemporary pricing structures, and embarks on long-term investment programs to enhance its infrastructure.

Northern Indiana continues to advance initiatives designed to improve customer services and reliability, as well as enhance the region’s environmental and economic sustainability.

• Significant environmental investments at Northern Indiana’s coal-fired electric generation facilities remain on track, including construction of FGD equipment on two units at Northern Indiana’s Schahfer generating station. The improvements are part of a nearly $850 million environmental investment program expected to be completed in 2015.

• Northern Indiana requested approval of a Green Power Rate pilot program from the IURC. The program allows customers to designate a portion or all of their monthly electric usage to be attributable to power generated by renewable energy sources, including wind, solar, geothermal, biomass and hydroelectric.

• Northern Indiana reached an all-time peak load record on June 28, 2012, of approximately 3,710 mw.

47

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (continued)

NISOURCE INC.

NiSource Gas Distribution companies continue to deliver strong results from their strategy of aligning long-term infrastructure replacement and enhancement programs with a variety of complementary customer programs and rate-design initiatives.

• Infrastructure projects across much of the gas distribution territory, combined with customer programs and regulatory treatment, continue to generate earnings growth. These initiatives contributed approximately $20 million in additional operating earnings during the first half of the year compared to the same period last year.

• The Columbia of Massachusetts base rate case before the Massachusetts DPU, seeking an annual revenue requirement increase of $29.2 million, remains on schedule. The case is designed to support the Company’s infrastructure modernization and replacements plans with timely investment recovery. An order is expected later this year.

• Columbia of Pennsylvania plans to file a rate case late in the third quarter of 2012 to support the Company’s modernization programs.

Refer to Note 8, “Regulatory Matters,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for a complete discussion of regulatory and commercial matters.

Commercial Growth and Expansion of the Gas Transmission and Storage Business

NiSource Gas Transmission & Storage Operations continues to develop and execute investment opportunities in existing and new markets, including midstream projects to serve the increased natural gas production in the Utica and Marcellus Shale regions.

• NiSource Midstream entered into a joint venture to construct new gathering pipelines and natural gas liquids processing facilities to support hydrocarbon production in the Utica Shale region of northeast Ohio and western Pennsylvania. The venture currently estimates to invest approximately $300 million to provide gathering capacity of about 400,000 Dth per day and initial processing capacity of approximately 200,000 Dth per day. The project is expected to be in service starting in the second half of 2013, with significant planned expansion based on producer activity in the area.

• NiSource Midstream entered into a definitive agreement to pool a portion of its assets in a joint undertaking to develop the hydrocarbon potential on a combined acreage position in the Utica and Point Pleasant Shale formation in eastern Ohio and western Pennsylvania. NiSource will be a non-operating, five percent (5%) working interest owner in the total acreage position.

• NiSource also remains on track to begin construction in August 2012 of the 70-mile, $150 million Big Pine Gathering System in western Pennsylvania, which is anchored by a long-term gathering agreement with XTO Energy Inc. The project is expected to be in service in December 2012, with an initial capacity of approximately 425,000 Dth per day.

• Columbia Transmission and Columbia Gulf are moving forward with plans to upgrade and modify facilities to support the West Side Expansion Project. Due to the changing supply and demand markets, the project will reverse the flow of gas on part of the system to transport approximately 500,000 Dth per day of Marcellus production originating in southwest Pennsylvania and north-central West Virginia to Gulf Coast markets. Service is scheduled to begin in late 2014.

• During the first half of 2012, NiSource Gas Transmission and Storage Operations placed into service three separate Marcellus Shale related growth projects at an investment of approximately $35 million, adding nearly 350,000 Dth per day of capacity.

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• Columbia Transmission also continues to advance plans for a long-term infrastructure modernization and enhancement program. Similar to the modernization programs in place at NiSource’s gas utilities, this effort will enhance the reliability and flexibility of the Company’s core pipeline system, ensuring continued safe and reliable service while positioning the Company to meet anticipated regulatory requirements. The plan is estimated to involve an investment of about $4 billion over a 10 to 15 year period.

Financial Management of the Balance Sheet

At the end of the second quarter, NiSource maintained approximately $1,399.2 million in net available liquidity.

On April 5, 2012, NiSource Finance negotiated a $250.0 million three-year bank term loan with a syndicate of banks which matures on April 3, 2015. Borrowings under the term loan will have an effective cost of LIBOR plus 137 basis points.

On May 15, 2012, NiSource increased its quarterly dividend by 4.3%, resulting in an increase in the annualized Common Stock dividend from $0.92 to $0.96 per share.

During May 2012, NiSource Finance amended its existing $1.5 billion revolving credit facility with a syndicate of banks led by Barclays Capital, extending the termination date to May 15, 2017 and reduced the cost of borrowing.

On June 14, 2012, NiSource Finance issued $250.0 million of 3.85% senior unsecured notes that mature on February 15, 2023 and $500.0 million of 5.25% senior unsecured notes that mature on February 15, 2043.

NiSource also remains on track to draw on its $400 million forward equity sale during the third quarter.

Ethics and Controls

NiSource has had a long-term commitment to providing accurate and complete financial reporting as well as high standards for ethical behavior by its employees. NiSource’s senior management takes an active role in the development of this Form 10-Q and the monitoring of the company’s internal control structure and performance. In addition, NiSource will continue its mandatory ethics training program for all employees.

Refer to “Controls and Procedures” included in Item 4.

Results of Operations

Quarter Ended June 30, 2012

Net Income

NiSource reported net income of $69.4 million, or $0.25 per basic share, for the three months ended June 30, 2012, compared to a net income of $40.2 million, or $0.14 per basic share, for the second quarter of 2011. Income from continuing operations was $70.5 million, or $0.25 per basic share, for the three months ended June 30, 2012, compared to income from continuing operations of $40.8 million, or $0.14 per basic share, for the second quarter of 2011. Operating income was $208.6 million, an increase of $43.1 million from the same period in 2011. All per share amounts are basic earnings per share. Basic average shares of common stock outstanding at June 30, 2012 were 284.4 million compared to 280.2 million at June 30, 2011.

Comparability of line item operating results between quarterly periods is impacted by regulatory and tax trackers that allow for the recovery in rates of certain costs such as bad debt expenses. Therefore, increases in these tracked operating expenses are offset by increases in net revenues and have essentially no impact on income from continuing operations.

Immaterial Restatement

As indicated in NiSource’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, NiSource made correcting adjustments to its historical financial statements including for the three and six months ended June 30, 2011 relating to deferred revenue, environmental asset recovery, OPEB over-reimbursement, and OPEB regulatory assets. NiSource does not believe that these corrections, individually or in the aggregate, are material to

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its financial statements (unaudited) for the three and six months ended June 30, 2012. For additional information on these corrections, see Note 1, Nature of Operations and Summary of Significant Accounting Policies, and Note 26, Quarterly Financial Data (Unaudited), of the Consolidated Financial Statements of NiSource’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

The following table sets forth the effects of the correcting adjustments to Net Income for the three and six months ended June 30, 2011:

Increase/(Decrease) in Net Income (in millions)	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011
Previously reported Net Income	$	38.9		$	244.1
Deferred revenue		-			(0.6	)
Environmental asset recovery		-			8.0
OPEB over-reimbursement		(0.2	)		(0.4	)
OPEB regulatory asset		2.4			2.4
Total corrections		2.2			9.4
Income taxes		0.9			3.8
Corrected Net Income	$	40.2		$	249.7

The following table sets forth the effects of the correcting adjustments on affected line items within the Condensed Statement of Consolidated Income (unaudited) for the three and six months ended June 30, 2011:

Condensed Statements of Consolidated Income (unaudited)

	Three Months Ended June 30, 2011				Six Months Ended June 30, 2011
(in millions, except per share amounts)	As Previously Reported		As Corrected		As Previously Reported		As Corrected
Net Revenues
Electric	$	349.2	$	349.2	$	696.3	$	695.7
Gross Revenues		1,228.3		1,228.3		3,460.5		3,459.9
Total Net Revenues		765.8		765.8		1,827.1		1,826.5
Operation and maintenance		402.5		400.3		835.0		829.6
Depreciation and amortization		134.5		134.5		273.4		268.8
Total Operating Expenses		604.8		602.6		1,269.9		1,259.9
Operating Income		163.3		165.5		562.5		571.9
Income from Continuing Operations before Income Taxes		69.5		71.7		382.2		391.6
Income Taxes		30.0		30.9		137.9		141.7
Income from Continuing Operations		39.5		40.8		244.3		249.9
Net Income	$	38.9	$	40.2	$	244.1	$	249.7
Basic Earnings Per Share ($)
Continuing operations	$	0.14	$	0.14	$	0.87	$	0.89
Basic Earnings Per Share	$	0.14	$	0.14	$	0.87	$	0.89
Diluted Earnings Per Share ($)
Continuing operations	$	0.14	$	0.14	$	0.85	$	0.87
Diluted Earnings Per Share	$	0.14	$	0.14	$	0.85	$	0.87

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These corrections affected certain line items within net cash flows from operating activities on the Condensed Statement of Consolidated Cash Flows (unaudited) for the six months ended June 30, 2011, with no net effect on total net cash flows from operating activities.

Net Revenues

Total consolidated net revenues (gross revenues less cost of sales) for the quarter ended June 30, 2012, were $807.6 million, a $41.8 million increase from the same period last year. This increase in net revenues was primarily due to increased Electric Operations’ net revenues of $39.0 million and increased Gas Transmission and Storage Operations’ net revenues of $7.4 partially offset by decreased Gas Distribution Operations’ net revenues of $2.6 million.

• Electric Operations’ net revenues increased primarily due to increased industrial, commercial and residential margins of $15.2 million mainly due to the implementation of the electric rate case. Additionally, there were lower revenue credits of $12.1 million in the current period as the electric rate case discontinued these credits. Net revenues also increased $8.1 million due to the impact of weather, increased off system sales of $3.9 million, and an increase in a RTO recovery mechanism of $3.1 million. These increases were partially offset by a decrease in environmental cost recovery of $4.6 million due to the plant balance eligible for recovery being reset to zero as a result of the electric rate case.

• Gas Transmission and Storage Operations’ net revenues increased primarily due to increased regulatory trackers, which are offset in expense, of $6.2 million and higher demand margin revenue of $5.3 million as a result of growth projects placed into service since the first quarter of 2011. These increases were partially offset by a settlement of $2.8 million during the second quarter of 2011 and a decrease of $2.1 million in condensate revenue.

• Gas Distribution Operations’ net revenues decreased due primarily to the effects of warmer weather of $5.4 million and lower regulatory trackers, which are offset in expense, of $5.3 million. These decreases in net revenues were partially offset by an increase of $8.6 million for regulatory and service programs, including the impact of new rates under Columbia of Ohio’s approved infrastructure replacement program and the impact of the rate case at Columbia of Pennsylvania.

Expenses

Operating expenses for the second quarter 2012 were $607.5 million, an increase of $4.9 million from the 2011 period. This increase was primarily due to higher depreciation and amortization of $13.5 million partially offset by a decrease in operation and maintenance expense of $6.0 million. The increase in depreciation and amortization is primarily due to higher capital expenditures and additional depreciation related to the Sugar Creek facility due to the expiration of the deferral as a result of the electric rate case. The decrease in operation and maintenance expense was primarily due to lower electric generation costs of $10.5 million primarily due to the timing of planned and unplanned outages and lower employee and administration costs of $6.5 million. This decrease was partially offset by an increase in outside services of $5.7 million and an increase in MISO fees of $4.4 million resulting from the electric rate case.

Equity Earnings in Unconsolidated Affiliates

Equity Earnings in Unconsolidated Affiliates were $8.5 million during the second quarter of 2012 compared to $2.3 million for the second quarter of 2011. Equity Earnings in Unconsolidated Affiliates includes investments in Millennium and Hardy Storage, which are integral to the Gas Transmission and Storage Operations’ business. Equity earnings increased as a result of an increase in demand and commodity revenues included in earnings at Millennium.

Other Income (Deductions)

Other Income (Deductions) reduced income by $100.4 million in 2012 compared to a reduction in income of $93.8 million in the prior year. The increase in deductions is primarily due to an increase in interest expense of $8.8 million resulting from the issuance of long-term debt of $400.0 million in June 2011, $500.0 million in November 2011 and $750 million in June 2012, and the expiration of the Sugar Creek deferral. This was partially offset by a decrease in interest expense due to the repurchase of $125.3 million of the 2016 and $124.7 million of the 2013

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notes in November 2011 and lower short-term borrowings and rates. Other-net income of $2.8 million was recorded in 2012 compared to $0.6 million in 2011. Other-net income increased primarily as a result of increased AFUDC-equity compared to the prior period.

Income Taxes

Income tax expense for the second quarter of 2012 was $37.7 million compared to $30.9 million in the prior year. NiSource’s interim effective tax rates reflect the estimated annual effective tax rates for 2012 and 2011, adjusted for tax expense associated with certain discrete items. The effective tax rates for the three months ended June 30, 2012 and 2011 were 34.8% and 43.1%, respectively. These effective tax rates differ from the Federal tax rate of 35% primarily due to the effects of tax credits, state income taxes, utility rate-making, and other permanent book-to-tax differences.

On May 12, 2011, the governor of Indiana signed into law House Bill 1004, which among other things, lowers the corporate income tax rate from 8.5% to 6.5% over four years beginning on July 1, 2012. The reduction in the tax rate will impact deferred income taxes and tax related regulatory assets and liabilities recoverable in the rate making process. In addition, other deferred tax assets and liabilities, primarily deferred tax assets related to Indiana net operating loss carry forward, will be reduced to reflect the lower rate at which these temporary differences and tax benefits will be realized. In the second quarter 2011, NiSource recorded tax expense of $6.8 million to reflect the effect of this rate change.

On December 27, 2011, the United States Treasury Department and the IRS issued temporary and proposed regulations effective for years beginning on or after January 1, 2012 that, among other things, provided guidance on whether expenditures qualified as deductible repairs. In addition, on March 15, 2012, the IRS issued a directive to discontinue exam activity related to positions on this issue taken on original tax returns for years beginning before January 1, 2012. NiSource expects the IRS to issue guidance for the treatment of expenditures for gas transmission and distribution assets, and generation within the next twelve months. NiSource further expects that it will be more likely to adopt the procedures provided in this guidance rather than the more general rules set forth in the temporary and proposed regulations. Accordingly, NiSource management expects to adjust unrecognized tax benefits recorded in 2009 related to its change in tax accounting for repairs for gas transmission and distribution, assets and generation assets in the period specific guidance for these assets is issued. As noted above, NiSource management believes that the issuance of such guidance and intent to adopt the guidance by NiSource is reasonably possible to occur within the next twelve months. In that event, NiSource will recognize a tax benefit for this issue in the amount of $80.9 million. NiSource believes these adjustments will not have a significant effect on the income statement.

On July 2, 2012, House Bill 761 was signed into law in Pennsylvania, which among other things, adopts a single-sales factor apportionment effective for tax years beginning on or after January 1, 2013. NiSource does not believe this adjustment will have a significant effect on net income.

Refer to Note 13, “Income Taxes,” in the Notes to the Condensed Consolidated Financial Statements (unaudited) for more detail about income taxes.

Discontinued Operations

There was a net loss of $1.1 million in the second quarter of 2012 from discontinued operations compared to net loss of $0.6 million in the second quarter of 2011.

Results of Operations

Six Months Ended June 30, 2012

Net Income

NiSource reported net income of $262.8 million, or $0.93 per basic share, for the six months ended June 30, 2012, compared to net income of $249.7 million, or $0.89 per basic share, for the first six months of 2011. Income from continuing operations was $264.0 million, or $0.93 per basic share, for the first six months ended June 30, 2012, compared to income from continuing operations of $249.9 million, or $0.89 per basic share, for the comparable 2011 period. Operating income was $608.0 million, an increase of $36.1 million from the same period in 2011. All per share amounts are basic earnings per share. Basic average shares of common stock outstanding at June 30, 2012 were 283.6 million compared to 279.8 million at June 30, 2011.

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Comparability of line item operating results between quarterly periods was impacted by regulatory and tax trackers that allow for the recovery in rates of certain costs such as bad debt expenses. Therefore, increases in these tracked operating expenses are offset by increases in net revenues and had essentially no impact on income from continuing operations.

Net Revenues

Total consolidated net revenues (gross revenues less cost of sales) for the six months ended June 30, 2012, were $1,836.0 million, a $9.5 million increase from the same period last year. This increase in net revenues was primarily due to increased Electric Operations’ net revenues of $61.2 million and increased Gas Transmission and Storage Operations’ net revenues of $26.5 million partially offset by decreased Gas Distributions’ net revenues of $76.5 million.

• Electric Operations’ net revenues increased primarily due to increased industrial, commercial and residential margins of $35.9 million mainly due to the implementation of the electric rate case. Additionally, there were lower revenue credits of $26.0 million in the current period as the electric rate case discontinued these credits. Net revenues also increased as a result of an increase in a RTO recovery mechanism of $7.5 million, off system sales of $3.3 million and the impact of weather of $1.4 million. These increases were partially offset by a decrease in environmental cost recovery of $15.6 million due to the plant balance eligible for recovery being reset to zero as a result of the electric rate case.

• Gas Transmission and Storage Operations’ net revenues increased primarily due to higher demand margin revenue of $14.5 million as a result of growth projects placed into service in the prior year. Additionally, there was an increase in regulatory trackers, which are offset in expense, of $8.8 million, increased revenues of $5.7 million due to the impact of the rate case filing at Columbia Gulf, and higher revenues from shorter term transportation services of $2.5 million. These increases were offset by a decrease in condensate revenue of $2.8 million.

• Gas Distribution Operations’ net revenues decreased due primarily to lower regulatory and tax trackers, which are offset in expense, of $51.4 million and the effects of warmer weather of $44.3 million. These decreases in net revenues were partially offset by an increase of $20.1 million for regulatory and service programs, including the impact of new rates under Columbia of Ohio’s approved infrastructure replacement program and the impact of the rate case at Columbia of Pennsylvania.

Expenses

Operating expenses for the six months ended June 30, 2012 were $1,244.2 million, a decrease of $15.7 million from the 2011 period. This decrease was primarily due to lower operation and maintenance expenses of $29.9 million and a decrease in other taxes of $7.3 million partially offset by an increase in depreciation and amortization of $25.3 million. The decrease in operation and maintenance expenses is due to a decrease in regulatory trackers, which are offset in revenue, of $33.0 million, lower employee and administration costs of $3.7 million and a decrease in electric generation costs of $3.6 million due primarily to the timing of planned and unplanned outages. This was partially offset by an increase in MISO fees of $10.0 million resulting from the electric rate case. Other taxes decreased primarily as a result of lower tax trackers, which are offset in revenue. Depreciation and amortization increased due primarily to higher capital expenditures and additional deprecation related to the Sugar Creek facility due to the expiration of the deferral as a result of the electric rate case.

Equity Earnings in Unconsolidated Affiliates

Equity Earnings in Unconsolidated Affiliates were $16.2 million for the six months ended June 30, 2012, an increase of $10.9 million compared to 2011. Equity Earnings in Unconsolidated Affiliates includes investments in Millennium and Hardy Storage which are integral to the Gas Transmission and Storage Operations’ business. Equity earnings increased as a result of an increase in demand and commodity revenues included in earnings at Millennium.

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Other Income (Deductions)

Other Income (Deductions) reduced income by $203.4 million for the six months ended June 30, 2012 compared to a reduction in income of $180.3 million in the prior year. The increase in deductions is primarily due to increased interest expense of $22.3 million due to the issuance of long-term debt of $400.0 million in June 2011, $500.0 million in November 2011 and $750.0 million in June 2012, and the expiration of the Sugar Creek deferral. This was partially offset by a decrease in interest expense due to the repurchase of $125.3 million of the 2016 and $124.7 million of the 2013 notes in November 2011 and lower short-term borrowings and rates. Other-net income of $3.1 million was recorded in 2012 compared to $3.9 million in 2011.

Income Taxes

Income taxes for the first six months of 2012 were $140.6 million, a decrease of $1.1 million compared to the first six months of 2011, mainly attributable to the 2011 enactment of Indiana tax legislation reducing the state rate.

The effective tax rates for the six months ended June 30, 2012 and 2011 were 34.8% and 36.2%, respectively. These effective tax rates differ from the Federal tax rate of 35% primarily due to the effects of tax credits, state income taxes, utility rate-making, and other permanent book-to-tax differences.

Discontinued Operations

There was a $1.2 million net loss from discontinued operations for the six months ended June 30, 2012, compared to a $0.2 million net loss from discontinued operations in 2011.

Liquidity and Capital Resources

A significant portion of NiSource’s operations, most notably in the gas distribution, gas transportation and storage and electric distribution businesses, are subject to seasonal fluctuations in cash flow. During the heating season, which is primarily from November through March, cash receipts from gas sales and transportation services typically exceed cash requirements. During the summer months, cash on hand, together with the seasonal increase in cash flows from the electric business during the summer cooling season and external short-term and long-term financing, is used to purchase gas to place in storage for heating season deliveries and perform necessary maintenance of facilities. NiSource believes that through income generated from operating activities, amounts available under its revolving credit facility, commercial paper program, long-term debt agreements and NiSource’s ability to access the capital markets, there is adequate capital available to fund its operating activities and capital expenditures in 2012.

Operating Activities

Net cash from operating activities for the six months ended June 30, 2012 was $771.8 million, an increase of $35.8 million compared to the six months ended June 30, 2011. The increase in net cash from operating activities was primarily due to the settlement payment of $28.7 million in 2011 related to the Thacker litigation and higher net income in the current period.

Pension and Other Postretirement Plan Funding.    NiSource expects to make contributions of approximately $3.3 million to its pension plans and approximately $51.7 million to its postretirement medical and life plans in 2012, which could change depending on market conditions. For the six months ended June 30, 2012, NiSource has contributed $1.6 million to its pension plans and $23.3 million to its other postretirement benefit plans.

Investing Activities

NiSource’s capital expenditures for the six months ended June 30, 2012 were $619.5 million, compared to $445.0 million for the comparable period in 2011. The increase is the result of increased spending for Gas Transmission and Storage Operations’ system growth and environmental tracker capital for FGD projects in the generation fleet in the Electric Operations segment. NiSource projects 2012 capital expenditures to be approximately $1.4 billion.

Restricted cash was $85.0 million and $160.6 million as of June 30, 2012 and December 31, 2011, respectively. The decrease in restricted cash was due to the wind-down of NiSource’s unregulated natural gas marketing business.

Financing Activities

Long-term Debt.    Refer to Note 16, “Long-Term Debt,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on long-term debt.

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Credit Facilities.    During May 2012, NiSource Finance amended its existing $1.5 billion revolving credit facility with a syndicate of banks led by Barclays Capital, extending the termination date to May 15, 2017 also reducing the borrowing costs under the facility. The purpose of the facility is to fund ongoing working capital requirements including the provision of liquidity support for NiSource’s commercial paper program, provide for the issuance of letters of credit, and also for general corporate purposes.

During June 2011, NiSource Finance implemented a new commercial paper program with a program limit of up to $500.0 million with a dealer group comprised of Barclays, Citigroup, Credit Suisse and Wells Fargo. Commercial paper issuances are supported by available capacity under NiSource’s $1.5 billion unsecured revolving credit facility, which expires in May 2017.

NiSource Finance had no outstanding borrowings under its five-year revolving credit facility at June 30, 2012 and borrowings of $725.0 million at December 31, 2011, at a weighted average interest rate of 1.99%. In addition, NiSource Finance had $134.4 million in commercial paper outstanding at June 30, 2012, at a weighted average interest rate of 1.16% and $402.7 million in commercial paper outstanding at December 31, 2011, at a weighted average interest rate of 1.01%.

As of June 30, 2012 and December 31, 2011, NiSource had $193.2 million and $231.7 million, respectively, of short-term borrowings recorded on the Condensed Consolidated Balance Sheets (unaudited) and cash from financing activities in the same amount relating to its accounts receivable securitization facilities. See Note 11, “Transfers of Financial Assets.”

As of June 30, 2012 and December 31, 2011, NiSource had $37.5 million of stand-by letters of credit outstanding of which $19.2 million were under the revolving credit facility.

As of June 30, 2012, an aggregate of $1,346.4 million of credit was available under the credit facility.

Sale of Trade Accounts Receivables.    Refer to Note 11, “Transfers of Financial Assets,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on the sale of accounts receivable.

All accounts receivable sold to the commercial paper conduits are valued at face value, which approximates fair value due to their short-term nature. The amount of the undivided percentage ownership interest in the accounts receivables sold is determined, in part, by required loss reserves under the agreements.

Credit Ratings.    On February 29, 2012, Standard & Poor’s affirmed the senior unsecured ratings for NiSource and its subsidiaries at BBB-. Standard & Poor’s outlook for NiSource and all of its subsidiaries is stable. On December 13, 2011, Fitch affirmed the senior unsecured ratings for NiSource at BBB-, and the existing ratings of all other subsidiaries. Fitch’s outlook for NiSource and all of its subsidiaries is stable. On November 18, 2011, Moody’s Investors Service affirmed the senior unsecured ratings for NiSource at Baa3, and the existing ratings of all other subsidiaries. Moody’s outlook for NiSource and all of its subsidiaries is stable. Although all ratings continue to be investment grade, a downgrade by Standard & Poor’s, Moody’s or Fitch would result in a rating that is below investment grade.

Certain NiSource affiliates have agreements that contain “ratings triggers” that require increased collateral if the credit ratings of NiSource or certain of its subsidiaries are rated below BBB- by Standard & Poor’s or Baa3 by Moody’s. These agreements are primarily for insurance purposes and for the physical purchase or sale of power. The collateral requirement that would be required in the event of a downgrade below the ratings trigger levels would amount to approximately $24.1 million. In addition to agreements with ratings triggers, there are other agreements that contain “adequate assurance” or “material adverse change” provisions that could necessitate additional credit support such as letters of credit and cash collateral to transact business. In addition, under Northern Indiana’s trade receivables sales program, an event of termination occurs if Northern Indiana’s debt rating is withdrawn by either Standard & Poor’s or Moody’s, or falls below BB or Ba2 at either Standard & Poor’s or Moody’s, respectively. Likewise, under Columbia of Ohio’s and Columbia of Pennsylvania’s trade receivables sales programs, an event of termination occurs if NiSource’s debt rating is withdrawn by either Standard & Poor’s or Moody’s, or falls below BB- or Ba3 at either Standard & Poor’s or Moody’s, respectively.

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Contractual Obligations.    Refer to Note 13, “Income Taxes,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for material changes recorded during the three and six months ended June 30, 2012 to NiSource’s uncertain tax positions recorded as of December 31, 2011.

Northern Indiana has a service agreement with Pure Air, a general partnership between Air Products and Chemicals, Inc. and First Air Partners LP, under which Pure Air provides scrubber services to reduce sulfur dioxide emissions for Units 7 and 8 at the Bailly Generating Station. Services under this contract commenced on July 1, 1992 and expired on June 30, 2012. On June 29, 2012, this agreement was renewed for ten years and, in accordance with GAAP, was evaluated to determine whether the arrangement qualified as a lease. Based on the terms of the agreement, the arrangement qualified for capital lease accounting. The effective date of the new agreement is July 1, 2012. NiSource will capitalize this lease beginning in the third quarter of 2012.

Forward Equity Sale.    Refer to Note 4, “Forward Equity Agreement,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on financing activities related to the forward equity sale.

Market Risk Disclosures

Risk is an inherent part of NiSource’s energy businesses. The extent to which NiSource properly and effectively identifies, assesses, monitors and manages each of the various types of risk involved in its businesses is critical to its profitability. NiSource seeks to identify, assess, monitor and manage, in accordance with defined policies and procedures, the following principal market risks that are involved in NiSource’s energy businesses: commodity price risk, interest rate risk and credit risk. Risk management at NiSource is a multi-faceted process with oversight by the Risk Management Committee that requires constant communication, judgment and knowledge of specialized products and markets. NiSource’s senior management takes an active role in the risk management process and has developed policies and procedures that require specific administrative and business functions to assist in the identification, assessment and control of various risks. These include but are not limited to market, operational, financial and strategic risk types. In recognition of the increasingly varied and complex nature of the energy business, NiSource’s risk management process, policies and procedures continue to evolve and are subject to ongoing review and modification.

Various analytical techniques are employed to measure and monitor NiSource’s market and credit risks, including VaR. VaR represents the potential loss or gain for an instrument or portfolio from changes in market factors, for a specified time period and at a specified confidence level.

Commodity Price Risk

NiSource is exposed to commodity price risk as a result of its subsidiaries’ operations involving natural gas and power. To manage this market risk, NiSource’s subsidiaries use derivatives, including commodity futures contracts, swaps and options. NiSource is not involved in speculative energy trading activity.

Commodity price risk resulting from derivative activities at NiSource’s rate-regulated subsidiaries is limited, since regulations allow recovery of prudently incurred purchased power, fuel and gas costs through the rate-making process, including gains or losses on these derivative instruments. If states should explore additional regulatory reform, these subsidiaries may begin providing services without the benefit of the traditional rate-making process and may be more exposed to commodity price risk. Some of NiSource’s rate-regulated utility subsidiaries offer commodity price risk products to its customers for which derivatives are used to hedge forecasted customer usage under such products. These subsidiaries do not have regulatory recovery orders for these products and are subject to gains and losses recognized in earnings due to hedge ineffectiveness.

Interest Rate Risk

NiSource is exposed to interest rate risk as a result of changes in interest rates on borrowings under its revolving credit agreement, term loan, commercial paper program and accounts receivable programs, which have interest rates that are indexed to short-term market interest rates. NiSource is also exposed to interest rate risk due to changes in interest rates on fixed-to-variable interest rate swaps that hedge the fair value of long-term debt. Based upon average borrowings and debt obligations subject to fluctuations in short-term market interest rates, an increase (or decrease) in short-term interest rates of 100 basis points (1%) would have increased (or decreased) interest expense by $4.1 million and $8.5 million for the three and six months ended June 30, 2012, respectively, and $4.0 million and $8.3 million for the three and six months ended June 30, 2011, respectively.

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Credit Risk

Due to the nature of the industry, credit risk is embedded in many of NiSource’s business activities. NiSource’s extension of credit is governed by a Corporate Credit Risk Policy. In addition, Risk Management Committee guidelines are in place which document management approval levels for credit limits, evaluation of creditworthiness, and credit risk mitigation efforts. Exposures to credit risks are monitored by the Corporate Credit Risk function which is independent of commercial operations. Credit risk arises due to the possibility that a customer, supplier or counterparty will not be able or willing to fulfill its obligations on a transaction on or before the settlement date. For derivative related contracts, credit risk arises when counterparties are obligated to deliver or purchase defined commodity units of gas or power to NiSource at a future date per execution of contractual terms and conditions. Exposure to credit risk is measured in terms of both current obligations and the market value of forward positions net of any posted collateral such as cash, letters of credit and qualified guarantees of support.

NiSource closely monitors the financial status of its banking credit providers and interest rate swap counterparties. NiSource evaluates the financial status of its banking partners through the use of market-based metrics such as credit default swap pricing levels, and also through traditional credit ratings provided by major credit rating agencies.

On October 31, 2011, cash and derivatives broker-dealer MF Global filed for Chapter 11 bankruptcy protection. MF Global brokered NYMEX hedges of natural gas futures on behalf of NiSource affiliates. At the date of bankruptcy, NiSource affiliates had contracts open with MF Global with settlement dates ranging from November 2011 to February 2014. On November 3, 2011, these contracts were measured at a mark-to-market loss of approximately $46.4 million. NiSource affiliates had posted initial margin to open these accounts of $6.9 million and additional maintenance margin for mark-to-market losses, for a total cash balance of $53.3 million. Within the first week after the filing, at the direction of the Bankruptcy Court, a transfer of assets was initiated on behalf of NiSource affiliates to a court-designated replacement broker for future trade activity. The existing futures positions were closed and then rebooked with the replacement broker at the new closing prices as of November 3, 2011. Initial margin on deposit at MF Global of $5.7 million was transferred to the court-designated replacement broker. The maintenance margin was retained by MF Global to offset the loss positions of the open contracts on November 3, 2011. NiSource affiliates are monitoring the activity in the bankruptcy case and have filed a proof of claim at the Court’s direction. As of June 30, 2012, NiSource affiliates maintained a reserve for the $1.2 million difference between the initial margin posted with MF Global and the cash transferred to the court-designated replacement broker as a loss contingency.

Fair Value Measurement

NiSource measures certain financial assets and liabilities at fair value. The level of the fair value hierarchy disclosed is based on the lowest level of input that is significant to the fair value measurement. NiSource’s financial assets and liabilities include price risk assets and liabilities, available-for-sale securities and a deferred compensation plan obligation.

Exchange-traded derivative contracts are generally based on unadjusted quoted prices in active markets and are classified within Level 1. These financial assets and liabilities are secured with cash on deposit with the exchange; therefore nonperformance risk has not been incorporated into these valuations. Certain non-exchange-traded derivatives are valued using broker or over-the-counter, on-line exchanges. In such cases, these non-exchange-traded derivatives are classified within Level 2. Non-exchange-based derivative instruments include swaps, forwards, and options. In certain instances, these instruments may utilize models to measure fair value. NiSource uses a similar model to value similar instruments. Valuation models utilize various inputs that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, other observable inputs for the asset or liability, and market-corroborated inputs, i.e., inputs derived principally from or corroborated by observable market data by correlation or other means. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. Certain derivatives trade in less active markets with a lower availability of pricing information and models may be utilized in the valuation. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized in Level 3. Credit risk is considered in the fair value calculation of derivative instruments that are not exchange-traded. Credit exposures are adjusted to reflect collateral agreements which reduce exposures.

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Price risk management assets also include fixed-to-floating interest-rate swaps, which are designated as fair value hedges, as a means to achieve its targeted level of variable-rate debt as a percent of total debt. NiSource uses a calculation of future cash inflows and estimated future outflows related to the swap agreements, which are discounted and netted to determine the current fair value. Additional inputs to the present value calculation include the contract terms, as well as market parameters such as current and projected interest rates and volatility. As they are based on observable data and valuations of similar instruments, the interest-rate swaps are categorized in Level 2 in the fair value hierarchy. Credit risk is considered in the fair value calculation of the interest rate swap.

Refer to Note 10, “Fair Value Disclosures,” in the Notes to the Condensed Consolidated Financial Statements (unaudited) for additional information on NiSource’s fair value measurements.

Market Risk Measurement

Market risk refers to the risk that a change in the level of one or more market prices, rates, indices, volatilities, correlations or other market factors, such as liquidity, will result in losses for a specified position or portfolio. NiSource calculates a one-day VaR at a 95% confidence level for the unregulated gas marketing group that utilizes a variance/covariance methodology. The daily market exposure for the unregulated gas marketing portfolio on an average, high and low basis was $0.1 million, $0.1 million and zero, respectively, for the second quarter of 2012. The daily market exposure for the unregulated gas marketing portfolio on an average, high and low basis was $0.1 million, $0.2 million and zero, respectively, for the six months ended June 30, 2012. Prospectively, management has set the VaR limit at $0.4 million for gas marketing. Exceeding this limit would result in management actions to reduce portfolio risk.

Refer to Note 9, “Risk Management Activities,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for further discussion of NiSource’s risk management.

Off Balance Sheet Arrangements

As a part of normal business, NiSource and certain subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of certain subsidiaries. Such agreements include guarantees and stand-by letters of credit.

NiSource has issued guarantees that support up to approximately $140.9 million of commodity-related payments for its current and former subsidiaries involved in energy marketing activities. These guarantees were provided to counterparties in order to facilitate physical and financial transactions involving natural gas services. To the extent liabilities exist under the commodity-related contracts subject to these guarantees, such liabilities are included in the Condensed Consolidated Balance Sheets (unaudited).

NiSource has purchase and sales agreement guarantees totaling $30.0 million, which guarantee performance of the seller’s covenants, agreements, obligations, liabilities, representations and warranties under the agreements. No amounts related to the purchase and sales agreement guarantees are reflected in the Condensed Consolidated Balance Sheets (unaudited). Management believes that the likelihood NiSource would be required to perform or otherwise incur any significant losses associated with any of the aforementioned guarantees is remote.

NiSource has other guarantees outstanding. Refer to Note 19-A, “Guarantees and Indemnities,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for additional information about NiSource’s off balance sheet arrangements.

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Other Information

Critical Accounting Policies

Goodwill. NiSource’s goodwill assets at June 30, 2012 were $3,677.3 million, most of which resulted from the acquisition of Columbia on November 1, 2000. In addition, Northern Indiana Gas Distribution Operations’ goodwill assets related to the purchase of Northern Indiana Fuel and Light and Kokomo Gas were $18.8 million at June 30, 2012. As required, NiSource tests for impairment of goodwill on an annual basis and on an interim basis when events or circumstances indicate that a potential impairment may exist. NiSource’s annual goodwill test takes place in the second quarter of each year and was most recently finalized as of May 1, 2012. The fair value of each reporting unit exceeded the carrying value based on this impairment test. Refer to Note 12, “Goodwill Assets,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for additional information concerning NiSource’s annual goodwill test.

There were no significant changes to critical accounting policies for the period ended June 30, 2012.

Recently Adopted and Issued Accounting Pronouncements

Refer to Note 2, “Recent Accounting Pronouncements,” in the Notes to Condensed Consolidated Financial Statements (unaudited).

International Financial Reporting Standards

In February 2010, the SEC expressed its commitment to the development of a single set of high quality globally accepted accounting standards and directed its staff to execute a work plan addressing specific areas of concern regarding the potential incorporation of IFRS for the U.S. In May 2011, a Staff Paper was issued outlining a possible endorsement approach for the incorporation of IFRS into the U.S. financial reporting system, as opposed to a single-date approach, if the SEC were to decide that incorporation of IFRS is in the best interest of U.S. investors. Under this possible framework, IFRS would be incorporated into U.S. GAAP during a transition period (e.g., five to seven years) and the FASB would be retained as the United States standard setter. In July 2012, the SEC Staff issued their final report on their work plan for the consideration of incorporating IFRS into the U.S. financial reporting system. While the SEC Staff reported on their findings with regards to the work plan, the Staff did not make a recommendation to the Commission and there is no current time frame for when the SEC will make a determination regarding IFRS. The accounting differences between U.S. GAAP and IFRS are complex and significant in many aspects, and conversion to IFRS would have broad impacts across NiSource. NiSource’s strategy for addressing a potential mandate of IFRS will be re-assessed when the SEC makes its determination on whether to require the use of IFRS and by what method.

Dodd-Frank Financial Reform Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Act”) was passed by Congress on July 15, 2010 and was signed into law on July 21, 2010. The Act, among other things, establishes a Financial Stability Oversight Council (“FSOC”) and a Consumer Financial Protection Bureau (“CFPB”) whose duties will include the monitoring of domestic and international financial regulatory proposals and developments, as well as the protection of consumers. The FSOC may submit comments to the SEC and any standard-setting body with respect to an existing or proposed accounting principle, standard or procedure. The Act also creates increased oversight of the over-the-counter (“OTC”) derivative market, requiring certain OTC transactions in instruments defined as “swaps” under the new regulations to be cleared through a clearing house and requiring cash margins to be posted for those transactions. In July 2012, the CFTC finalized most of its remaining key regulations under the Act, which will go into effect starting later in 2012 in accordance with a schedule promulgated by the CFTC. Under the CFTC’s final rules, most, if not all, of NiSource’s transactions will either not be considered “swaps” or will qualify for the “end-user exception” to mandatory clearing of swaps under CFTC regulations. Although the Act and the new regulations are expected to have some impact on capital markets and derivatives markets generally, NiSource does not expect the Act to have any material effect on its operations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (continued)

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RESULTS AND DISCUSSION OF SEGMENT OPERATIONS

Presentation of Segment Information

NiSource’s operations are divided into three primary business segments: Gas Distribution Operations, Gas Transmission and Storage Operations, and Electric Operations.

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Gas Distribution Operations

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2012		2011		2012		2011
Net Revenues
Sales Revenues	$	452.3	$	629.9	$	1,521.6	$	2,215.4
Less: Cost of gas sold (excluding depreciation and amortization)		141.9		316.9		697.5		1,314.8
Net Revenues		310.4		313.0		824.1		900.6
Operating Expenses
Operation and maintenance		180.5		187.1		384.7		429.3
Depreciation and amortization		47.9		43.7		94.6		86.6
Loss on sale of assets		-		-		-		0.1
Other taxes		35.1		35.6		85.9		96.5
Total Operating Expenses		263.5		266.4		565.2		612.5
Operating Income	$	46.9	$	46.6	$	258.9	$	288.1
Revenues ($ in Millions)
Residential	$	268.2	$	371.7	$	994.7	$	1,447.4
Commercial		80.7		110.4		322.4		470.6
Industrial		34.9		46.3		95.2		124.1
Off System		43.8		92.9		78.9		169.7
Other		24.7		8.6		30.4		3.6
Total	$	452.3	$	629.9	$	1,521.6	$	2,215.4
Sales and Transportation (MMDth)
Residential		28.3		33.6		131.2		168.1
Commercial		25.2		26.7		86.4		104.3
Industrial		114.1		100.8		245.4		219.7
Off System		17.2		20.4		30.7		37.9
Other		0.1		0.2		0.2		0.5
Total		184.9		181.7		493.9		530.5
Heating Degree Days		474		566		2,736		3,580
Normal Heating Degree Days		608		608		3,539		3,508
% (Warmer) Colder than Normal		(22%)		(7%)		(23%)		2%
Customers
Residential						3,018,123		3,005,423
Commercial						276,787		277,508
Industrial						7,732		7,648
Other						21		64
Total						3,302,663		3,290,643

NiSource’s natural gas distribution operations serve approximately 3.3 million customers in seven states: Ohio, Indiana, Pennsylvania, Massachusetts, Virginia, Kentucky and Maryland. The regulated subsidiaries offer both traditional bundled services as well as transportation only for customers that purchase gas from alternative suppliers. The operating results reflect the temperature-sensitive nature of customer demand with 73% of annual residential and commercial throughput affected by seasonality. As a result, segment operating income is higher in the first and fourth quarters reflecting the heating demand during the winter season.

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Gas Distribution Operations (continued)

Regulatory Matters

Refer to Note 8, “Regulatory Matters,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on significant rate developments and cost recovery and trackers for the Gas Distribution Operations segment.

Customer Usage. Increased efficiency of natural gas appliances and improvements in home building codes and standards has contributed to a long-term trend of declining average use per customer. In addition, usage for the first six months of 2012 declined from the same period last year primarily due to warmer than normal weather. While historically, rate design at the distribution level has been structured such that a large portion of cost recovery is based upon throughput, rather than in a fixed charge, operating costs are largely incurred on a fixed basis, and do not fluctuate due to changes in customer usage. As a result, the NiSource LDCs have pursued changes in rate design to more effectively match recoveries with cost incurrence. Each of the states in which the NiSource LDCs operate has different requirements regarding the procedure for establishing changes to rate design. Columbia of Ohio restructured its rate design through a base rate proceeding and has adopted a “de-coupled” rate design which more closely links the recovery of fixed costs with fixed charges. Columbia of Massachusetts and Columbia of Virginia received regulatory approval of decoupling mechanisms which adjust revenues to an approved benchmark level through a volumetric adjustment factor. In its 2011 rate case, Columbia of Pennsylvania implemented a higher fixed residential customer charge. In its 2010 rate case, Northern Indiana implemented a higher fixed customer charge for residential and small customer classes moving toward full straight fixed variable rate design. This rate design was also incorporated in the settlement of the 2011 merger of the three Indiana LDCs: Northern Indiana, Kokomo Gas and Northern Indiana Fuel and Light.

Environmental Matters

Various environmental matters occasionally impact the Gas Distribution Operations segment. As of June 30, 2012, a reserve has been recorded to cover probable and estimable environmental response actions. Refer to Note 19-C, “Environmental Matters,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for additional information regarding environmental matters for the Gas Distribution Operations segment.

Weather

In general, NiSource calculates the weather related revenue variance based on changing customer demand driven by weather variance from normal heating degree-days. Normal is evaluated using heating degree days across the NiSource distribution region. While the temperature base for measuring heating degree days (i.e. the estimated average daily temperature at which heating load begins) varies slightly across the region, the NiSource composite measurement is based on 65 degrees. NiSource composite heating degree days reported do not directly correlate to the weather related dollar impact on the results of Gas Distribution Operations. Heating degree days experienced during different times of the year or in different operating locations may have more or less impact on volume and dollars depending on when and where they occur. When the detailed results are combined for reporting, there may be weather related dollar impacts on operations when there is not an apparent or significant change in the aggregated NiSource composite heating degree-day comparison.

Weather in the Gas Distribution Operations’ territories for the second quarter of 2012 was 22% warmer than normal and 16% warmer than the second quarter in 2011.

Weather in the Gas Distribution Operations’ territories for the six months ended June 30, 2012 was 23% warmer than normal and 24% warmer compared to the same period in 2011.

Throughput

Total volumes sold and transported of 184.9 MMDth for the second quarter of 2012 increased by 3.2 MMDth from the same period last year. This 1.8% increase in volume was primarily attributable to increased industrial customer usage.

Total volumes sold and transported of 493.9 MMDth for the first six months of 2012 decreased by 36.6 MMDth from the same period last year. This 6.9% decrease in volume was primarily due to warmer weather partially offset by an increase in industrial usage.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (continued)

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Gas Distribution Operations (continued)

Net Revenues

Net revenues for the second quarter of 2012 were $310.4 million, a decrease of $2.6 million from the same period in 2011, due primarily to the effects of warmer weather of $5.4 million and lower regulatory trackers, which are offset in expense, of $5.3 million. These decreases in net revenues were partially offset by an increase of $8.6 million for regulatory and service programs, including the impact of new rates under Columbia of Ohio’s approved infrastructure replacement program and the impact of the rate case at Columbia of Pennsylvania.

At Northern Indiana, sales revenues and customer billings are adjusted for amounts related to under and over-recovered purchased gas costs from prior periods per regulatory order. These amounts are primarily reflected in the “Other” gross revenues statistic provided at the beginning of this segment discussion. The adjustment to Other gross revenues for the three and six months ended June 30, 2012 was a revenue decrease of $1.5 million and $37.7 million, respectively, compared to a decrease of $16.1 million and $51.0 million for the three and six months ended June 30, 2011, respectively.

Net revenues for the six months ended June 30, 2012 were $824.1 million, a decrease of $76.5 million from the same period in 2011, due primarily to lower regulatory and tax trackers, which are offset in expense, of $51.4 million and the effects of warmer weather of $44.3 million. These decreases in net revenues were partially offset by an increase of $20.1 million for regulatory and service programs, including the impact of new rates under Columbia of Ohio’s approved infrastructure replacement program and the impact of the rate case at Columbia of Pennsylvania.

Operating Income

For the second quarter of 2012, Gas Distribution Operations reported operating income of $46.9 million, an increase of $0.3 million from the comparable 2011 period. Operating income increased due to lower operating expenses, partially offset by lower net revenues, as described above. Operating expenses were $2.9 million lower than the comparable period reflecting a decrease of $5.3 million in regulatory trackers, which are offset in net revenue, partially offset by an increase in depreciation costs of $4.2 million due to an increase in capital expenditures.

For the six months ended June 30, 2012, Gas Distribution Operations reported operating income of $258.9 million, a decrease of $29.2 million from the comparable 2011 period. Operating income decreased due to lower net revenues, as described above, partially offset by lower operating expenses. Operating expenses decreased $47.3 million due to lower regulatory and tax trackers of $51.4 million, which are offset in revenue, and lower employee and administration costs of $2.4 million, primarily due to lower pension costs, partially offset by an increase of $8.0 million in depreciation costs as a result of an increase in capital expenditures.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (continued)

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Gas Transmission and Storage Operations

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2012			2011			2012			2011
Net Revenues
Transportation revenues	$	179.5		$	174.7		$	397.6		$	374.4
Storage revenues		48.7			49.4			98.0			99.9
Other revenues		12.8			9.4			20.8			14.6
Total Sales Revenues		241.0			233.5			516.4			488.9
Less: Cost of sales (excluding depreciation and amortization)		0.1			-			1.0			-
Net Revenues		240.9			233.5			515.4			488.9
Operating Expenses
Operation and maintenance		111.0			103.3			205.7			197.9
Depreciation and amortization		33.0			32.8			66.0			65.5
Gain on sale of assets		0.1			-			0.1			-
Other taxes		13.8			15.1			29.7			27.8
Total Operating Expenses		157.9			151.2			301.5			291.2
Equity Earnings in Unconsolidated Affiliates		8.5			2.3			16.2			5.3
Operating Income	$	91.5		$	84.6		$	230.1		$	203.0
Throughput (MMDth)
Columbia Transmission		210.4			204.9			589.8			631.5
Columbia Gulf		236.4			263.1			463.9			507.1
Crossroads Gas Pipeline		4.1			5.6			8.4			10.7
Intrasegment eliminations		(122.8	)		(147.7	)		(228.5	)		(300.3	)
Total		328.1			325.9			833.6			849.0

NiSource’s Gas Transmission and Storage Operations segment primarily consists of the operations of Columbia Transmission, Columbia Gulf, NiSource Midstream, Crossroads Pipeline, and the equity investments in Millennium and Hardy Storage. In total, NiSource owns a pipeline network of approximately 15,000 miles extending from the Gulf of Mexico to New York and the eastern seaboard. The pipeline network serves customers in 16 northeastern, mid-Atlantic, midwestern and southern states, as well as the District of Columbia. In addition, the Gas Transmission and Storage Operations segment operates one of the nation’s largest underground natural gas storage systems.

Gas Transmission and Storage Operations’ most significant projects are as follows:

Growth Projects Placed into Service

Clendenin Project.    Construction began in 2010 on this approximately $18 million capital project that modified existing facilities in the Clendenin, West Virginia area to move Marcellus production to liquid market centers. The Clendenin project provided the Gas Transmission and Storage Operations segment the ability to meet incremental transportation demand of up to 150,000 Dth per day. Long-term firm transportation contracts for 133,100 Dth were executed, some of which began in the third quarter 2010 and others that began in June 2011.

East Lateral Project.    In 2010, the Gas Transmission and Storage Operations segment initiated a $5 million project to modify existing facilities on the Columbia Gulf East Lateral to provide firm transportation service for up to 300,000 Dth per day. Firm transportation contracts for 250,000 Dth per day were executed for five-year terms. This FERC-approved project was completed and put into service in May 2011.

Majorsville, PA Project.    The Gas Transmission and Storage Operations segment executed three separate projects totaling approximately $80 million in the Majorsville, PA vicinity to aggregate Marcellus Shale gas production for downstream transmission. Fully contracted, the pipeline and compression assets allow the Gas Transmission and Storage Operations segment to gather and deliver more than 325,000 Dth per day of Marcellus production gas to the Majorsville MarkWest Liberty processing plants developed by MarkWest Liberty Midstream & Resources L.L.C.

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Gas Transmission and Storage Operations (continued)

In 2010, Columbia Transmission received approval from the FERC to refunctionalize certain transmission assets to gathering and transferred these pipeline facilities to a newly formed affiliate, NiSource Midstream Services, LLC. These facilities are included in providing non-FERC jurisdiction gathering services to producers in the Majorsville, PA vicinity. Two of the three projects were completed and placed into service on August 1, 2010, creating an integrated gathering and processing system serving Marcellus production in southwestern Pennsylvania and northern West Virginia. Precedent agreements were executed by anchor shippers in the fourth quarter of 2009, which were superseded by the execution of long-term service agreements in August and September 2010. In the fourth quarter 2010, construction began on the third project on a pipeline to deliver residue gas from the Majorsville MarkWest Liberty processing plant to the Texas Eastern Wind Ridge compressor station in southwestern Pennsylvania to provide significant additional capacity to eastern markets. This project was placed into service in April 2011.

Southern Appalachian Project.    The Gas Transmission and Storage Operations segment invested nearly $4 million that expanded Line SM-116 to transport approximately 38,500 Dth per day on a firm basis as a continuation of its strategy to provide transportation services to producers of Marcellus and Appalachian gas. This additional capacity was supported by executed, binding precedent agreements. These additional facilities were placed in service in April 2011.

Smithfield Project.    The Gas Transmission and Storage Operations segment made approximately $14 million of capital investments for modifications to existing pipeline and compressor facilities to accommodate receipt of up to 150,000 Dth per day of additional Marcellus gas from connections near Smithfield, West Virginia and Waynesburg, Pennsylvania. Three anchor shippers agreed to long-term, firm transportation contracts, one contract that began in April 2011 and others that began in August 2011. The project was placed in service in May 2012.

Rimersburg Expansion Project.    The Gas Transmission and Storage Operations segment invested approximately $8 million for this project that added capacity to north central Pennsylvania to meet the growing demands of producers in the area. The project expands Line 134 from the Brinker compressor station to the Iowa regulator, adding approximately 19,000 Dth per day of additional capacity, all of which has been sold through precedent agreements. The project was placed into service in May 2012.

Line WB Expansion Project.    The Gas Transmission and Storage Operations segment expanded its WB system through investment in additional facilities, which provide transportation service on a firm basis from Loudoun, Virginia to Leach, Kentucky. The expansion totaled approximately $14 million, allowing producers to meet incremental transportation demand in the Marcellus/Appalachian Basin. Binding precedent agreements for approximately 175,000 Dth per day of firm transportation capacity were executed, some which began in January 2011. Final construction on all facilities was completed and placed into service in May 2012.

Growth Projects in Progress

Big Pine Gathering System Project.    The Gas Transmission and Storage Operations segment is making an investment of approximately $150 million, which includes right-of-way acquisitions and installation, refurbishment and operation of approximately 70 miles of pipeline facilities in the hydrocarbon-rich Western Pennsylvania shale production region. The newly constructed pipeline will have an initial combined capacity of 425,000 Dth per day. Natural gas will initially be sourced from XTO Energy Inc., a subsidiary of ExxonMobil, Butler County, Pennsylvania production, and delivered to Columbia Transmission and two other third-party pipelines in Pennsylvania. Rights of way were acquired and cleared and construction is underway. The project is expected to be placed in service in late 2012.

Power Plant Generation Project.    The Gas Transmission and Storage Operations segment is spending nearly $35 million on an expansion project, which includes new pipeline and modifications to existing compression assets, with Virginia Power Services Energy Corporation, Inc., the energy manager for Virginia Electric and Power Company. This project will expand the Columbia Transmission system in order to provide up to nearly 250,000 Dth per day of transportation capacity under a long-term, firm contract. The project is expected to be ready for commercial operations by mid-2014.

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Gas Transmission and Storage Operations (continued)

West Side Expansion.  The Gas Transmission and Storage Operations segment is planning to invest approximately $200 million in new pipeline and compression to increase supply origination from the Smithfield and Waynesburg areas on the Columbia Transmission system and provides a backhaul transportation path to Gulf Coast markets on the Columbia Gulf system. This investment will increase capacity up to 444,000 Dth per day from the Smithfield and Waynesburg areas and up to 540,000 Dth per day from Leach to Rayne transporting Marcellus production under long-term, firm contracts. The project is expected to be in service by the fourth quarter 2014 with limited interim service provided in 2012 through 2014.

Equity Investments

Pennant Midstream, LLC. Early in the third quarter of 2012, NiSource Midstream entered into a joint venture with affiliates of Hilcorp Energy Company (Hilcorp), a privately owned oil and gas exploration and development company based in Houston, Texas, to construct new gathering pipeline infrastructure and natural gas liquids (NGL) processing facilities to support natural gas production in the Utica Shale region of northeast Ohio and western Pennsylvania. NiSource and Hilcorp will jointly own Pennant Midstream, LLC (Pennant) with NiSource serving as the operator of Pennant and the facilities.

Pennant plans to invest in the construction of 50 miles of 20-inch gathering pipeline facilities in northeast Ohio and western Pennsylvania. In addition, Pennant will invest in the construction and installation of a cryogenic NGL processing plant in Ohio with initial capacity of 200 million cubic feet (Mmcf) per day. NiSource Midstream will operate the cryogenic plant and gathering system, which is expected to initially provide approximately 400 Mmcf per day of wet gas gathering, with significant anticipated expansion opportunities based on anticipated Utica development activity in the area. The first phase of the venture’s investment program, currently estimated at approximately $300 million, is planned to be in service in the second half of 2013.

Millennium Pipeline.  Millennium Pipeline Company, L.L.C. operates approximately 250 miles of pipeline granted under the authority of the FERC. The Millennium pipeline has the capability to transport up to 525,400 Dth per day of natural gas to markets along its route, which lies between Corning, New York and Ramapo, New York, as well as to the New York City market through its pipeline interconnections. Columbia Transmission owns a 47.5% interest in Millennium and acts as operator for the pipeline in partnership with DTE Millennium Company and National Grid Millennium LLC, which each own an equal remaining share of the company.

Columbia Transmission made a contribution of $2.4 million and received a distribution of earnings of $3.3 million from Millennium in the second quarter 2012. No contributions were made but a distribution was received from Millennium of $7.1 million during the second quarter of 2011. For the first six months of 2012, Columbia Transmission made contributions of $7.6 million and received distributions of earnings of $15.7 million. For the same period last year, no contributions were made and distributions of earnings totaled $7.1 million.

Hardy Storage.  Hardy Storage is a joint venture between subsidiaries of Columbia Transmission and Piedmont that manages an underground storage field in Hardy and Hampshire counties in West Virginia. Columbia Transmission serves as operator of the company, which is regulated by the FERC. Hardy Storage has a working storage capacity of 12 Bcf and the ability to deliver 176,000 Dth of natural gas per day.

Hardy Storage distributed to NiSource $1.0 million of available accumulated earnings in the second quarter of each of 2012 and 2011. For the first six months of 2012 and 2011, NiSource received distributions totaling $1.5 million and $2.8 million, respectively. NiSource made no contributions during the first and second quarters of 2012 or 2011.

Sales and Percentage of Physical Capacity Sold

Columbia Transmission and Columbia Gulf compete for transportation customers based on the type of service a customer needs, operating flexibility, available capacity and price. Columbia Gulf and Columbia Transmission provide a significant portion of total transportation services under firm contracts and derive a smaller portion of revenues through interruptible contracts, with management seeking to maximize the portion of physical capacity sold under firm contracts.

66

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (continued)

NISOURCE INC.

Gas Transmission and Storage Operations (continued)

Firm service contracts require pipeline capacity to be reserved for a given customer between certain receipt and delivery points. Firm customers generally pay a “capacity reservation” fee based on the amount of capacity being reserved regardless of whether the capacity is used, plus an incremental usage fee when the capacity is used. Annual capacity reservation revenues derived from firm service contracts generally remain constant over the life of the contract because the revenues are based upon capacity reserved and not whether the capacity is actually used. The high percentage of revenue derived from capacity reservation fees mitigates the risk of revenue fluctuations within the Gas Transmission and Storage Operations segment due to changes in near-term supply and demand conditions. For the quarter ended June 30, 2012, approximately 91.1% of the transportation revenues were derived from capacity reservation fees paid under firm contracts and 6.0% of the transportation revenues were derived from usage fees under firm contracts compared to approximately 91.0% and 6.6%, respectively, for the quarter ended June 30, 2011. For the six months ended June 30, 2012, approximately 91.5% of the transportation revenues were derived from capacity reservation fees paid under firm contracts and 6.2% of the transportation revenues were derived from usage fees under firm contracts compared to approximately 91.4% and 6.7% respectively, for the six months ended June 30, 2011.

Interruptible transportation service is typically short term in nature and is generally used by customers that either do not need firm service or have been unable to contract for firm service. These customers pay a usage fee only for the volume of gas actually transported. The ability to provide this service is limited to available capacity not otherwise used by firm customers, and customers receiving services under interruptible contracts are not assured capacity in the pipeline facilities. Gas Transmission and Storage Operations provides interruptible service at competitive prices in order to capture short term market opportunities as they occur and interruptible service is viewed by management as an important strategy to optimize revenues from the gas transmission assets. For the quarters ended June 30, 2012 and 2011, approximately 2.9% and 2.4%, respectively, of the transportation revenues were derived from interruptible contracts. For the six months ended June 30, 2012 and 2011, approximately 2.3% and 1.9%, respectively, of the transportation revenues were derived from interruptible contracts.

Regulatory Matters

Refer to Note 8, “Regulatory Matters,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on regulatory matters for the Gas Transmission and Storage Operations segment.

Environmental Matters

Various environmental matters occasionally impact the Gas Transmission and Storage Operations segment. As of June 30, 2012, a reserve has been recorded to cover probable and estimable environmental response actions. Refer to Note 19-C, “Environmental Matters,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for additional information regarding environmental matters for the Gas Transmission and Storage Operations segment.

Throughput

Columbia Transmission’s throughput consists of gas transportation service deliveries to LDC city gates, to gas fired power plants, other industrial customers, or other interstate pipelines in its market area. Columbia Transmission’s market area covers portions of Northeastern, Mid-Atlantic, Midwestern, and Southern states as well as the District of Columbia. Gas delivered via transportation services to storage is not accounted for as throughput until it is withdrawn from storage and delivered to one of the aforementioned locations via a transportation service. Throughput for Columbia Gulf traditionally consists of gas delivered to Columbia Transmission at Leach, Kentucky as well as gas delivered south of Leach to other interstate pipelines or to an LDC’s city gate. Recent changes in market conditions have resulted in more non–traditional throughput such as backhaul transportation services that originate in Leach that flow southward. Columbia Gulf has also began to flow gas in a southerly direction from its Louisiana interconnects to Florida markets. Crossroads Pipeline serves customers in Northern Indiana and Ohio via gas flowing west to east originating from outside the Chicago area to Cygnet, Ohio where it interconnects with Columbia Transmission. Intra-segment eliminations represent gas delivered to an affiliated pipeline within the segment.

67

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (continued)

NISOURCE INC.

Gas Transmission and Storage Operations (continued)

Throughput for the Gas Transmission and Storage Operations segment totaled 328.1 MMDth for the second quarter of 2012, compared to 325.9 MMDth for the same period in 2011. The increase of 2.2 MMDth for the three-month period was attributable to the increase in power generation load as lower natural gas prices have shifted demand from coal fired generation to natural gas fired generation combined with an increase in shale gas from the Appalachian, Haynesville and Barnett shale areas, which has led to an increase in non-traditional throughput on Columbia Gulf in the form of deliveries to other interstate pipelines on the Columbia Gulf system.

Throughput for the Gas Transmission and Storage Operations segment totaled 833.6 MMDth for the first six months of 2012, compared to 849.0 MMDth for the same period in 2011. The decrease of 15.4 MMDth was primarily attributable to significantly warmer weather, which drove a vast majority of the decrease on the Columbia Transmission system. Because of the impact from increased production of Appalachian shale gas and the warmer weather, fewer deliveries were made on the Columbia Gulf system to Columbia Transmission at Leach, Kentucky. The increase in shale gas from the Appalachian, Haynesville and Barnett shale areas has also led to an increase in non-traditional throughput on Columbia Gulf in the form of deliveries to other interstate pipelines on the Columbia Gulf system.

Net Revenues

Net revenues were $240.9 million for the second quarter of 2012, an increase of $7.4 million from the same period in 2011, primarily due to increased regulatory trackers, which are offset in expense, of $6.2 million and higher demand margin revenue of $5.3 million as a result of growth projects placed into service since the first quarter of 2011. These increases were partially offset by a settlement of $2.8 million during the second quarter of 2011 and a decrease of $2.1 million in condensate revenue.

Net revenues were $515.4 million for the first six months of 2012, an increase of $26.5 million from the same period in 2011 primarily due to higher demand margin revenue of $14.5 million as a result of growth projects placed into service in the prior year. Additionally, there was an increase in regulatory trackers, which are offset in expense, of $8.8 million, increased revenues of $5.7 million due to the impact of the rate case filing at Columbia Gulf, and higher revenues of $2.5 million from shorter term transportation services. These increases were offset by a decrease in condensate revenue of $2.8 million and a settlement of $2.8 million during the second quarter of 2011.

Operating Income

Operating income was $91.5 million for the second quarter of 2012, an increase of $6.9 million from the second quarter of 2011. This increase is due to higher operating revenues, as described above, and increased equity earnings, partially offset by increased operating expenses. Equity earnings increased $6.2 million primarily from higher earnings at Millennium due to increased demand and commodity revenues. Operating expenses increased $6.7 million due to increased regulatory trackers, which are offset in expense, of $6.2 million, increased outside service costs of $2.3 million, the write-off of capitalized preliminary survey and investigation costs of $1.8 million and increased Midstream expenses of $1.6 million. These increases were partially offset by lower employee and administration costs, primarily pension, of $4.7 million.

Operating income was $230.1 million for the six months ended June 30, 2012, an increase of $27.1 million from the comparable period in 2011. Operating income increased as a result of the increase in net revenues, as described above and higher equity earnings partially offset by an increase in operating expenses. Equity earnings increased $10.9 million primarily from increased earnings at Millennium due to increased demand and commodity revenues. Operating expenses increased $10.3 million primarily due to an increase in regulatory trackers, which are offset in expense, of $8.8 million, increased Midstream expenses of $3.5 million, separation costs of $2.0 million, an increase in other taxes of $1.9 million, primarily attributable to higher property taxes on increased plant investments, and the write-off of capitalized preliminary survey and investigation costs of $1.8 million. These increases were partially offset by a decrease in employee and administration costs, primarily pension, of $7.2 million and lower outside service costs of $1.7 million.

68

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (continued)

NISOURCE INC.

Electric Operations

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2012		2011		2012		2011
Net Revenues
Sales revenues	$	378.9	$	351.0	$	733.5	$	699.4
Less: Cost of sales (excluding depreciation and amortization)		125.6		136.7		242.8		269.9
Net Revenues		253.3		214.3		490.7		429.5
Operating Expenses
Operation and maintenance		106.6		107.6		220.7		201.4
Depreciation and amortization		61.6		53.3		122.5		107.8
Other taxes		14.7		13.1		30.9		29.4
Total Operating Expenses		182.9		174.0		374.1		338.6
Operating Income	$	70.4	$	40.3	$	116.6	$	90.9
Revenues ($ in millions)
Residential		97.6		89.4		193.6		186.9
Commercial		104.2		95.0		204.6		187.5
Industrial		147.7		147.6		305.7		302.8
Wholesale		7.2		6.8		7.6		9.0
Other		22.2		12.2		22.0		13.2
Total		378.9		351.0		733.5		699.4
Sales (Gigawatt Hours)
Residential		861.2		784.4		1,642.4		1,640.2
Commercial		976.4		946.6		1,884.2		1,871.5
Industrial		2,332.0		2,325.7		4,717.0		4,768.1
Wholesale		56.0		200.2		75.1		267.3
Other		25.9		37.1		58.4		81.6
Total		4,251.5		4,294.0		8,377.1		8,628.7
Cooling Degree Days		377		258		377		258
Normal Cooling Degree Days		230		230		230		230
% Warmer than Normal		64%		12%		64%		12%
Electric Customers
Residential						400,230		399,473
Commercial						53,946		53,861
Industrial						2,442		2,425
Wholesale						17		15
Other						716		737
Total						457,351		456,511

NiSource generates and distributes electricity, through its subsidiary Northern Indiana, to approximately 457 thousand customers in 20 counties in the northern part of Indiana. The operating results reflect the temperature-sensitive nature of customer demand with annual sales affected by temperatures in the northern part of Indiana. As a result, segment operating income is generally higher in the second and third quarters, reflecting cooling demand during the summer season.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (continued)

NISOURCE INC.

Electric Operations (continued)

Electric Supply

On October 28, 2011, Northern Indiana filed its 2011 Integrated Resource Plan with the IURC. The plan evaluates demand-side and supply-side resource alternatives to reliably and cost-effectively meet Northern Indiana customers’ future energy requirements over the next twenty years. Existing resources are expected to be sufficient, assuming favorable outcomes for environmental upgrades, to meet customers’ needs for the next decade. Northern Indiana continues to monitor and assess economic, regulatory and legislative activity, and will update its resource plan as appropriate.

Regulatory Matters

Refer to Note 8, “Regulatory Matters,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for information on significant rate developments, MISO, and cost recovery and trackers for the Electric Operations segment.

Environmental Matters

Various environmental matters occasionally impact the Electric Operations segment. As of June 30, 2012, a reserve has been recorded to cover probable and estimable environmental response actions. Refer to Note 19-C, “Environmental Matters,” in the Notes to Condensed Consolidated Financial Statements (unaudited) for additional information regarding environmental matters for the Electric Operations segment.

Sales

Electric Operations sales quantities for the second quarter of 2012 were 4,251.5 gwh, a decrease of 42.5 gwh compared to the second quarter of 2011.

Electric Operations sales quantities for the six months ended June 30, 2012 were 8,377.1 gwh, a decrease of 251.6 gwh compared to the same period in 2011. The 2.9% decrease is primarily attributable to a decrease in sales to the Electric Operations’ wholesale customers.

Net Revenues

Net revenues were $253.3 million for the second quarter of 2012, an increase of $39.0 million from the same period in 2011, primarily due to increased industrial, commercial and residential margins of $15.2 million mainly due to the implementation of the electric rate case. Additionally, there were lower revenue credits of $12.1 million in the current period as the electric rate case discontinued these credits. Net revenues also increased $8.1 million due to the impact of weather, increased off system sales of $3.9 million, and an increase in a RTO recovery mechanism of $3.1 million. These increases were partially offset by a decrease in environmental cost recovery of $4.6 million due to the plant balance eligible for recovery being reset to zero as a result of the electric rate case.

At Northern Indiana, sales revenues and customer billings are adjusted for amounts related to under and over-recovered purchased fuel costs from prior periods per regulatory order. These amounts are primarily reflected in the “Other” gross revenues statistic provided at the beginning of this segment discussion. The adjustment to Other gross revenues for the three and six months ended June 30, 2012 was a revenue increase of $1.9 million and a decrease of $18.2 million, respectively, compared to an increase of $0.8 million and a decrease of $10.0 million for the three and six months ended June 30, 2011, respectively.

Net revenues were $490.7 million for the first six months of 2012, an increase of $61.2 million from the same period in 2011 primarily due to increased industrial, commercial and residential margins of $35.9 million mainly due to the implementation of the electric rate case. Additionally, there were lower revenue credits of $26.0 million in the current period as the electric rate case discontinued these credits. Net revenues also increased as a result of an increase in a RTO recovery mechanism of $7.5 million, off system sales of $3.3 million and the impact of weather of $1.4 million. These increases were partially offset by a decrease in environmental cost recovery of $15.6 million due to the plant balance eligible for recovery being reset to zero as a result of the electric rate case.

Operating Income

Operating income for the second quarter of 2012 was $70.4 million, an increase of $30.1 million from the same period in 2011 due to an increase in net revenues, as described above, partially offset by an increase in operating expenses. Operating expenses increased $8.9 million primarily due to higher depreciation costs of $8.3 million

70

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (continued)

NISOURCE INC.

Electric Operations (continued)

resulting from depreciation for Sugar Creek and an increase in MISO fees of $4.4 million, both of which were previously deferred and the electric rate case resulted in the expiration of those deferrals. Additionally, operating expenses increased due to an increase in other taxes of $1.6 million, primarily property taxes, increased environmental trackers, which are offset in revenues, of $1.3 million, and $1.2 million of increased employee and administration costs. These increases were partially offset by a decrease in electric generation costs of $10.5 million primarily due to the timing of planned and unplanned outages.

Operating income for the first six months of 2012 was $116.6 million, an increase of $25.7 million from the same period in 2011 primarily due to an increase in net revenues, as described above, partially offset by an increase in operating expenses. Operating expenses increased $35.5 million primarily due to higher depreciation costs of $14.7 million mainly related to depreciation for Sugar Creek and an increase in MISO fees of $10.0 million, both of which were previously deferred and the electric rate case resulted in the expiration of those deferrals. Additionally, operating expenses increased due to employee and administration expenses of $8.9 million and increased tree trimming costs of $2.9 million. These increases were partially offset by decreased electric generation costs of $3.6 million due primarily to the timing of planned and unplanned outages.

71

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

NISOURCE INC.

For a discussion regarding quantitative and qualitative disclosures about market risk see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Market Risk Disclosures.”

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

NiSource’s Chief Executive Officer and its Principal Financial Officer, after evaluating the effectiveness of NiSource’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), have concluded based on the evaluation required by paragraph (b) of Exchange Act Rules 13a-15 and 15d-15 that, as of the end of the period covered by this report, NiSource’s disclosure controls and procedures are considered effective.

Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by NiSource in the reports that it files or submits under the Exchange Act is accumulated and communicated to NiSource’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There have been no changes in NiSource’s internal control over financial reporting during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, NiSource’s internal control over financial reporting.

72

PART II

ITEM 1. LEGAL PROCEEDINGS

NISOURCE INC.

Majorsville Operations Center – PADEP Notice of Violation

In 1995, Columbia Transmission entered into an AOC with the EPA that requires Columbia Transmission to characterize and remediate environmental contamination at thousands of locations along Columbia Transmission’s pipeline system. One of the facilities subject to the AOC is the Majorsville Operations Center, which was remediated under an EPA approved Remedial Action Work Plan in summer 2008. Pursuant to the Remedial Action Work Plan, Columbia Transmission completed a project that stabilized residual oil contained in soils at the site and in sediments in an adjacent stream.

On April 23, 2009, however, the PADEP issued Columbia Transmission an NOV, alleging that the remediation was not effective. The NOV asserts violations of the Pennsylvania Clean Streams Law and the Pennsylvania Solid Waste Management Act and contains a settlement demand in the amount of $1 million. Columbia Transmission is unable to estimate the likelihood or cost of potential penalties or additional remediation at this time.

EPA Administrative Complaints

On June 29, 2012, Region III EPA issued two Administrative Complaints that Columbia Transmission discharged dredged and/or fill material to waters of the United States in violation of the Clean Water Act during road maintenance projects in West Virginia. Columbia Transmission had self-disclosed the activities to regulatory agencies in 2010 and has removed the fill pursuant to an EPA-approved plan. The proposed penalties for these two Complaints total $0.2 million. Columbia Transmission is reviewing the Administrative Complaints.

ITEM 1A.  RISK FACTORS

There were no material changes from the risk factors disclosed in NiSource’s 2011 Annual Report on Form 10-K filed on February 24, 2012.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.

73

ITEM 6. EXHIBITS

NISOURCE INC.

(10.1)	Amended and Restated Revolving Credit Agreement among NiSource Finance Corp., as Borrower, NiSource Inc., as Guarantor, the lender parties thereto as Lenders, Credit Suisse AG, Cayman Islands Branch as Syndication Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citibank, N.A., and JPMorgan Chase Bank, N.A., as Co-Documentation Agents and Barclays Bank PLC, as Administrative Agent dated May 15, 2012.
(18.1)	Letter Of Independent Registered Public Accounting Firm Re: Change in Accounting Principles
(31.1)	Certification of Robert C. Skaggs, Jr., Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(31.2)	Certification of Stephen P. Smith, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32.1)	Certification of Robert C. Skaggs, Jr., Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
(32.2)	Certification of Stephen P. Smith, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
(101.INS)	XBRL Instance Document
(101.SCH)	XBRL Schema Document
(101.CAL)	XBRL Calculation Linkbase Document
(101.LAB)	XBRL Labels Linkbase Document
(101.PRE)	XBRL Presentation Linkbase Document
(101.DEF)	XBRL Definition Linkbase Document

Pursuant to Item 601(b)(4)(iii) of Regulation S-K, NiSource hereby agrees to furnish the SEC, upon request, any instrument defining the rights of holders of long-term debt of NiSource not filed as an exhibit herein. No such instrument authorizes long-term debt securities in excess of 10% of the total assets of NiSource and its subsidiaries on a consolidated basis.

74

SIGNATURE

NISOURCE INC.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		NiSource Inc.
		(Registrant)
Date: July 31, 2012	By:	/s/ Jon D. Veurink
		Jon D. Veurink
		Vice President and Chief Accounting Officer (Principal Accounting Officer and Duly Authorized Officer)

75

EX-10.1

Exhibit 10.1

EXECUTION COPY

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

among

NISOURCE FINANCE CORP.,

as Borrower,

NISOURCE INC.,

as Guarantor,

THE LENDERS PARTY HERETO,

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

as Syndication Agent,

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

CITIBANK, N.A.

and

JPMORGAN CHASE BANK, N.A.,

as Co-Documentation Agents

BARCLAYS BANK PLC,

as Administrative Agent,

BARCLAYS BANK PLC

CREDIT SUISSE SECURITIES(USA) LLC

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.

CITIGROUP GLOBAL MARKETS, INC.

and

J.P. MORGAN SECURITIES LLC

Joint Lead Arrangers and Joint Bookrunners

Dated as of May 15, 2012

TABLE OF CONTENTS

	Page
ARTICLE I DEFINITIONS		1
SECTION 1.01. DEFINED TERMS		1
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS		18
SECTION 1.03. TERMS GENERALLY		18
SECTION 1.04. ACCOUNTING TERMS; GAAP		18
SECTION 1.05. AMENDMENT AND RESTATEMENT OF THE EXISTING CREDIT AGREEMENT		19
ARTICLE II THE CREDITS		20
SECTION 2.01. COMMITMENTS		20
SECTION 2.02. REVOLVING LOANS AND REVOLVING BORROWINGS; REQUESTS FOR BORROWINGS		20
SECTION 2.03. SWINGLINE LOANS		22
SECTION 2.04. LETTERS OF CREDIT		23
SECTION 2.05. FUNDING OF BORROWINGS		27
SECTION 2.06. INTEREST ELECTIONS		27
SECTION 2.07. MANDATORY TERMINATION OR REDUCTION OF COMMITMENTS		28
SECTION 2.08. MANDATORY PREPAYMENTS		29
SECTION 2.09. OPTIONAL REDUCTION OF COMMITMENTS		29
SECTION 2.10. REPAYMENT OF LOANS; EVIDENCE OF DEBT		29
SECTION 2.11. OPTIONAL PREPAYMENT OF LOANS.		30
SECTION 2.12. FEES		31
SECTION 2.13. INTEREST		32
SECTION 2.14. ALTERNATE RATE OF INTEREST		33
SECTION 2.15. INCREASED COSTS		33
SECTION 2.16. BREAK FUNDING PAYMENTS		35
SECTION 2.17. TAXES		35
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS		37
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS		38
SECTION 2.20. DEFAULTING LENDERS		39
ARTICLE III CONDITIONS		41
SECTION 3.01. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT		41
SECTION 3.02. CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT		42
ARTICLE IV REPRESENTATIONS AND WARRANTIES		43
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES		43
ARTICLE V AFFIRMATIVE COVENANTS		45
SECTION 5.01. AFFIRMATIVE COVENANTS		45
ARTICLE VI NEGATIVE COVENANTS		49
SECTION 6.01. NEGATIVE COVENANTS		49
ARTICLE VII FINANCIAL COVENANT		53
ARTICLE VIII EVENTS OF DEFAULT		53
SECTION 8.01. EVENTS OF DEFAULT		53
ARTICLE IX THE ADMINISTRATIVE AGENT		56
SECTION 9.01. THE ADMINISTRATIVE AGENT		56
ARTICLE X GUARANTY		59

i

	Page
SECTION 10.01. THE GUARANTY		59
SECTION 10.02. WAIVERS		61
ARTICLE XI MISCELLANEOUS		62
SECTION 11.01. NOTICES		62
SECTION 11.02. WAIVERS; AMENDMENTS		63
SECTION 11.03. EXPENSES; INDEMNITY; DAMAGE WAIVER		64
SECTION 11.04. SUCCESSORS AND ASSIGNS		65
SECTION 11.05. SURVIVAL		68
SECTION 11.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS		68
SECTION 11.07. SEVERABILITY		69
SECTION 11.08. RIGHT OF SETOFF		69
SECTION 11.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS		69
SECTION 11.10. WAIVER OF JURY TRIAL		70
SECTION 11.11. HEADINGS		70
SECTION 11.12. CONFIDENTIALITY		70
SECTION 11.13. USA PATRIOT ACT		71
SECTION 11.14. ACKNOWLEDGMENTS		71

ANNEXES, EXHIBITS AND SCHEDULES

ANNEX A	Pricing Grid
EXHIBIT A	Form of Assignment and Assumption
EXHIBIT B	Form of Opinion of Schiff Hardin LLP
EXHIBIT C	Revolving Loan Borrowing Request
EXHIBIT D	Swingline Loan Borrowing Request
EXHIBIT E	Letter of Credit Extension Request
EXHIBIT F	Form of Revolving Note
EXHIBIT G	Interest Election Request
EXHIBIT H	Prepayment Notice
SCHEDULE 2.01	Lenders and Commitments
SCHEDULE 2.04	Existing Letters of Credit
SCHEDULE 6.01(e)	Existing Agreements

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of May 15, 2012 (this “Agreement”), among NISOURCE FINANCE CORP., an Indiana corporation, as Borrower (the “Borrower”), NISOURCE INC., a Delaware corporation (“NiSource”), as Guarantor (the “Guarantor”), the Lead Arrangers and other Lenders from time to time party hereto, the Co-Documentation Agents party hereto, CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Syndication Agent and BARCLAYS BANK PLC, as administrative agent for the Lenders hereunder (in such capacity, the “Administrative Agent”).

WITNESSETH:

WHEREAS, the Borrower, the Guarantor, certain Lenders, the Departing Lenders and the Administrative Agent are parties to the Existing Credit Agreement (as defined herein) pursuant to which, among other things, the Lenders agreed to enter, subject to the terms and conditions set forth therein, into a revolving credit facility in an aggregate amount of $1,500,000,000; and

WHEREAS, the parties hereto have agreed to amend and restate the Existing Credit Agreement pursuant to the terms and conditions of this Agreement;

NOW, THEREFORE, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans comprising such Borrowing are, bearing interest at a rate determined by reference to the Alternate Base Rate.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Aggregate Commitments” means the aggregate amount of the Commitments of all Lenders, as in effect from time to time. As of the date hereof, the Aggregate Commitments equal $1,500,000,000.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) 1.0% per annum plus the LIBO Rate applicable to an Interest Period of one month on such day (or if such day is not a Business Day, the immediately preceding Business Day), provided that, for the avoidance of doubt, the

LIBO Rate for any day shall be based on the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such page) at approximately 11:00 a.m. London time on such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the one-month LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the one-month LIBO Rate, respectively.

“Applicable Percentage” means, with respect to any Lender, the percentage of the Aggregate Commitments represented by such Lender’s Commitment; provided that, in the case of Section 2.20 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage of the Aggregate Commitment (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.

“Applicable Rate” means, for any day, with respect to any ABR Loan, Eurodollar Revolving Loan, or Swingline Loan or with respect to the Facility Fees and the LC Risk Participation Fee payable hereunder, as the case may be, the applicable rate per annum determined pursuant to the Pricing Grid.

“Arrangers” means each of Barclays, Credit Suisse Securities (USA) LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citigroup Global Markets, Inc. and J.P. Morgan Securities LLC.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 11.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“Authorized Officer” means the president, chief financial officer or the treasurer of the Borrower; provided that solely with respect to the submission of a Borrowing Request or a Swingline Request, “Authorized Officer” shall also mean the assistant treasurer or the treasury operations manager of the Borrower.

“Availability Period” means the period from and including the Effective Date to but excluding the Termination Date.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person or any direct or indirect parent of such Person by a Governmental Authority or instrumentality

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thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

“Barclays” means Barclays Bank PLC, an English banking corporation.

“Beneficiary” has the meaning set forth in Section 10.01.

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Borrower” means NiSource Finance Corp., an Indiana corporation.

“Borrowing” means Loans of the same Type and Class, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in accordance with Section 2.02.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“Capital Lease” means, as to any Person, any lease of real or personal property in respect of which the obligations of the lessee are required, in accordance with GAAP, to be capitalized on the balance sheet of such Person.

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person other than a corporation (including, but not limited to, all common stock and preferred stock and partnership, membership and joint venture interests in a Person), and any and all warrants, rights or options to purchase any of the foregoing.

“Cash Account” has the meaning set forth in Section 8.01.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act, 42, U.S.C. Section 9601 et seq., as amended.

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“Change in Law” means (a) the adoption of any law, rule, regulation or treaty after the date of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or any LC Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or such LC Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided however, that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued and (ii) all requests, rules, reports, notes, guidelines and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall be deemed to be a “Change in Law” regardless of the date executed, adopted or issued.

“Change of Control” means (a) any “person” or “group” within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended, shall become the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of more than 50% of the then outstanding voting Capital Stock of the Guarantor, (b) Continuing Directors shall cease to constitute at least a majority of the directors constituting the Board of Directors of the Guarantor, (c) a consolidation or merger of the Guarantor shall occur after which the holders of the outstanding voting Capital Stock of the Guarantor immediately prior thereto hold less than 50% of the outstanding voting Capital Stock of the surviving entity; (d) more than 50% of the outstanding voting Capital Stock of the Guarantor shall be transferred to an entity of which the Guarantor owns less than 50% of the outstanding voting Capital Stock; (e) there shall occur a sale of all or substantially all of the assets of the Guarantor; or (f) the Borrower, NIPSCO or Columbia shall cease to be a Wholly-Owned Subsidiary of the Guarantor (except to the extent otherwise permitted under clauses (i), (ii), (iii) or (iv) of Section 6.01(b)).

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans comprising such Borrowing are, Revolving Loans or Swingline Loans.

“Co-Documentation Agents” means The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citibank, N.A. and JPMorgan Chase Bank, N.A., in their respective capacities as co-documentation agents for the Lenders hereunder.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Columbia” means Columbia Energy Group, a Delaware corporation.

“Commitment” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans hereunder and to participate in Letters of Credit issued hereunder as set forth herein, as such commitment may be (a) reduced from time to time or terminated pursuant to Section 2.07 or Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.04. The

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initial amount of each Lender’s Commitment is (x) the amount set forth on Schedule 2.01 opposite such Lender’s name; or (y) the amount set forth in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.

“Consolidated Capitalization” means the sum of (a) Consolidated Debt, (b) consolidated common equity of the Guarantor and its Consolidated Subsidiaries determined in accordance with GAAP, and (c) the aggregate liquidation preference of preferred stocks (other than preferred stocks subject to mandatory redemption or repurchase) of the Guarantor and its Consolidated Subsidiaries upon involuntary liquidation.

“Consolidated Debt” means, at any time, the Indebtedness of the Guarantor and its Consolidated Subsidiaries that would be classified as debt on a balance sheet of the Guarantor determined on a consolidated basis in accordance with GAAP.

“Consolidated Subsidiary” means, on any date, each Subsidiary of the Guarantor the accounts of which, in accordance with GAAP, would be consolidated with those of the Guarantor in its consolidated financial statements if such statements were prepared as of such date.

“Contingent Guaranty” means a direct or contingent liability in respect of a Project Financing (whether incurred by assumption, guaranty, endorsement or otherwise) that either (a) is limited to guarantying performance of the completion of the Project that is financed by such Project Financing or (b) is contingent upon, or the obligation to pay or perform under which is contingent upon, the occurrence of any event other than failure of the primary obligor to pay upon final maturity (whether by acceleration or otherwise).

“Continuing Directors” means (a) all members of the board of directors of the Guarantor who have held office continually since the Effective Date, and (b) all members of the board of directors of the Guarantor who were elected as directors after the Effective Date and whose nomination for election was approved by a vote of at least 50% of the Continuing Directors.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Documents” means (a) this Agreement, any promissory notes executed pursuant to Section 2.10, and any Assignment and Assumptions, (b) any certificates, opinions and other documents required to be delivered pursuant to Section 3.01 and (c) any other documents delivered by a Credit Party pursuant to or in connection with any one or more of the foregoing.

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“Credit Party” means each of the Borrower and the Guarantor; and “Credit Parties” means the Borrower and the Guarantor, collectively.

“Creditor Party” means the Administrative Agent, any LC Bank, the Swingline Lender or any other Lender.

“Debt for Borrowed Money” means, as to any Person, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all Capital Lease obligations of such Person, and (d) all obligations of such Person under synthetic leases, tax retention operating leases, off-balance sheet loans or other off-balance sheet financing products that, for tax purposes, are considered indebtedness for borrowed money of the lessee but are classified as operating leases under GAAP.

“Debt to Capitalization Ratio” means, at any time, the ratio of Consolidated Debt to Consolidated Capitalization.

“Default” means any event or condition that constitutes an Event of Default or that, upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Creditor Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding set forth in Section 3.02 (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Creditor Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement set forth in Section 3.02 cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Creditor Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Creditor Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

“Departing Lender” means each lender under the Existing Credit Agreement that executes and delivers to the Administrative Agent a Departing Lender Signature Page.

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“Departing Lender Signature Page” means each signature page to this Agreement on which it is indicated that the Departing Lender executing the same shall cease to be a party to the Existing Credit Agreement on the Effective Date.

“Dollars” or “$” refers to lawful money of the United States of America.

“Effective Date” means the date on which this Agreement has been executed and delivered by each of the Borrower, the Guarantor, the Syndication Agent, the Co-Documentation Agents, the initial Lenders and the Swingline Lender, the LC Banks and the Administrative Agent.

“Environmental Laws” means any and all foreign, federal, state, local or municipal laws (including, without limitation, common laws), rules, orders, regulations, statutes, ordinances, codes, decrees, judgments, awards, writs, injunctions, requirements of any Governmental Authority or other requirements of law regulating, relating to or imposing liability or standards of conduct concerning, pollution, waste, industrial hygiene, occupational safety or health, the presence, transport, manufacture, generation, use, handling, treatment, distribution, storage, disposal or release of Hazardous Materials, or protection of human health, plant life or animal life, natural resources or the environment, as now or at any time hereafter in effect.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Guarantor or any of its Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ERISA Affiliate” means any Person who, for purposes of Title IV of ERISA, is a member of the Guarantor’s controlled group, or under common control with the Guarantor, within the meaning of Section 414 of the Code and the regulations promulgated and rulings issued thereunder.

“ERISA Event” means (a) a reportable event, within the meaning of Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto has been waived by the PBGC, (b) the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) and 4041(c) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA), (c) the withdrawal by the Guarantor or an ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in

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Section 4001(a)(2) of ERISA, (d) the failure by the Guarantor or any ERISA Affiliate to make a payment to a Plan required under Section 302 of ERISA, for which Section 303(k) imposes a lien for failure to make required payments, or (e) the institution by the PBGC of proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or the occurrence of any event or condition which may reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, a Plan.

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Board, as in effect from time to time.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans comprising such Borrowing are, bearing interest at a rate determined by reference to the LIBO Rate.

“Eurodollar Rate Reserve Percentage” of any Lender for the Interest Period for any Eurodollar Loan means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period.

“Event of Default” has the meaning assigned to such term in Article VIII.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income or net earnings by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) in case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(d)), any withholding tax that (i) is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement, except to the extent that such Foreign Lender’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.17(a) or (ii) is attributable to such Foreign Lender’s failure to comply with Section 2.17 (e) when legally able to do so, and (c) any U.S. federal witholding Taxes imposed under FATCA.

“Existing Credit Agreement” means that certain Revolving Credit Agreement, dated as of March 3, 2011 by and among the Borrower, the Guarantor, the Lenders from time to time party thereto and the Administrative Agent.

“Existing Letters of Credit” means the Letters of Credit listed in Schedule 2.04.

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“Extension of Credit” means (a) the making by any Lender of a Revolving Loan, (b) the making by the Swingline Lender of any Swingline Loan, (c) the issuance of a Letter of Credit by any LC Bank or (d) the amendment of any Letter of Credit having the effect of extending the stated termination date thereof, increasing the LC Outstandings, or otherwise altering any of the material terms or conditions thereof.

“Facility Fee” has the meaning set forth in Section 2.12.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

“Federal Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. § 101 et seq.) as now or hereafter in effect, or any successor statute.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“GAAP” means generally accepted accounting principles in the United States of America consistent with those applied in the preparation of the financial statements referred to in Section 4.01(e).

“Governmental Authority” means the government of the United States of America, any other nation, or any political subdivision of the United States of America or any other nation, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government and includes, in any event, an “Independent System Operator” or any entity performing a similar function (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

“Granting Lender” has the meaning set forth in Section 11.04.

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“Guarantor” means NiSource.

“Guaranty” means the guaranty of the Guarantor pursuant to Article X of this Agreement.

“Hazardous Materials” means any asbestos; flammables; volatile hydrocarbons; industrial solvents; explosive or radioactive materials; hazardous wastes; toxic substances; liquefied natural gas; natural gas liquids; synthetic gas; oil, petroleum, or related materials and any constituents, derivatives, or byproducts thereof or additives thereto; or any other material, substance, waste, element or compound (including any product) regulated pursuant to any Environmental Law, including, without limitation, substances defined as “hazardous substances,” “hazardous materials,” “contaminants,” “pollutants,” “hazardous wastes,” “toxic substances,” “solid waste,” or “extremely hazardous substances” in (i) CERCLA, (ii) the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., (iii) the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., (iv) the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq., (v) the Clean Air Act, 42 U.S.C. Section 7401 et seq., (vi) the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., (vii) the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., or (viii) foreign, state, local or municipal law, in each case, as may be amended from time to time.

“Indebtedness” of any Person means (without duplication) (a) Debt for Borrowed Money, (b) obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business which are not overdue, (c) all obligations, contingent or otherwise, of such Person in respect of any letters of credit, bankers’ acceptances or interest rate, currency or commodity swap, cap or floor arrangements, (d) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the indebtedness secured thereby has been assumed, (e) all amounts payable by such Person in connection with mandatory redemptions or repurchases of preferred stock, and (f) obligations of such Person under direct or indirect guarantees in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (a) through (e) above.

“Indemnified Taxes” means Taxes other than (a) Excluded Taxes and (b) Other Taxes imposed on or with respect to any payment made by or on account of any obligation of any Credit Party under the Credit Documents.

“Indemnitee” has the meaning set forth in Section 11.03.

“Index Debt” means the senior unsecured long-term debt securities of the Borrower, without third-party credit enhancement provided by a Person other than the Guarantor.

“Information” has the meaning set forth in Section 11.12.

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“Initial LC Bank” means each of the Lead Lenders.

“Insufficiency” means, with respect to any Plan, the amount, if any, by which the present value of all vested and unvested accrued benefits under such Plan exceeds the fair market value of assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan using actuarial assumptions used in determining such Plan’s normal cost for purposes of Section 4l2(b)(2)(A) of the Code.

“Interest Election Request” means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.06.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, the day that is three months after the first day of such Interest Period, (c) with respect to any Swingline Loan, the last day of each March, June, September and December and (d) with respect to any Loan, the Termination Date.

“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day; and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“LC Bank” means the Initial LC Banks or any other Lender approved by the Borrower that may agree to issue Letters of Credit pursuant to an agreement in form satisfactory to the Borrower and the Administrative Agent, so long as such Lender expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as an LC Bank and notifies the Administrative Agent of its applicable lending office (which information shall be recorded by the Administrative Agent in the Register), for so long as such Initial LC Bank or Lender, as the case may be, shall have a Letter of Credit Commitment.

“LC Exposure” means, at any time, the sum of (a) the LC Outstandings at such time plus (b) the aggregate amount of all Unreimbursed LC Disbursements at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

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“LC Outstandings” means, for any date of determination, the aggregate maximum amount available to be drawn under all Letters of Credit outstanding on such date (assuming the satisfaction of all conditions for drawing enumerated therein).

“LC Risk Participation Fee” has the meaning set forth in Section 2.12.

“Lead Lenders” means Barclays, Credit Suisse AG, Cayman Islands Branch, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citibank, N.A. and JPMorgan Chase Bank, N.A.

“Lenders” means (a) the Persons listed on Schedule 2.01, including any such Person identified thereon or in the signature pages hereto as a Lead Arranger, and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption, (b) the Swingline Lender in respect of the Swingline Loans made by it and (c) if and to the extent so provided in Section 2.04(c), the applicable LC Bank.

“Letter of Credit” means a standby letter of credit issued by the applicable LC Bank pursuant to the terms of this Agreement, together with the letters of credit deemed issued hereunder pursuant to Section 2.04(h), in each case, as such letter of credit may from time to time be amended, modified or extended in accordance with the terms of this Agreement.

“Letter of Credit Commitment” means, with respect to each LC Bank, the obligation of such LC Bank to issue Letters of Credit for the account of the Borrower from time to time in an aggregate amount up to (a) for each Initial LC Bank, $100,000,000 and (b) for any other LC Bank, as separately agreed to by such LC Bank and the Borrower. The Letter of Credit Commitment is part of, and not in addition to, the Commitments.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

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“Lien” has the meaning set forth in Section 6.01(a).

“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“Margin Stock” means margin stock within the meaning of Regulations U and X issued by the Board.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, condition (financial or otherwise) or prospects of the Guarantor and its Subsidiaries taken as a whole; (b) the validity or enforceability of any of Credit Documents or the rights, remedies and benefits available to the Administrative Agent and the Lenders thereunder; or (c) the ability of the Borrower or the Guarantor to consummate the Transactions.

“Material Subsidiary” means at any time the Borrower, NIPSCO, Columbia, and each Subsidiary of the Guarantor, other than the Borrower, NIPSCO and Columbia, in respect of which:

(a) the Guarantor’s and its other Subsidiaries’ investments in and advances to such Subsidiary and its Subsidiaries exceed 10% of the consolidated total assets of the Guarantor and its Subsidiaries taken as a whole, as of the end of the most recent fiscal year; or

(b) the Guarantor’s and its other Subsidiaries’ proportionate interest in the total assets (after intercompany eliminations) of such Subsidiary and its Subsidiaries exceeds 10% of the consolidated total assets of the Guarantor and its Subsidiaries as of the end of the most recent fiscal year; or

(c) the Guarantor’s and its other Subsidiaries’ equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principles of such Subsidiary and its Subsidiaries exceeds 10% of the consolidated income of the Guarantor and its Subsidiaries for the most recent fiscal year.

“Moody’s” means Moody’s Investors Service, Inc., and any successor thereto.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Multiple Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (a) is maintained for employees of the Borrower or an ERISA Affiliate and at least one Person other than the Borrower and its ERISA Affiliates, or (b) was so maintained and in respect of which the Borrower or an ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event that such plan has been or were to be terminated.

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“NIPSCO” means Northern Indiana Public Service Company, an Indiana corporation.

“Non-Recourse Debt” means Indebtedness of the Guarantor or any of its Subsidiaries which is incurred in connection with the acquisition, construction, sale, transfer or other disposition of specific assets, to the extent recourse, whether contractual or as a matter of law, for non-payment of such Indebtedness is limited (a) to such assets or (b) if such assets are (or are to be) held by a Subsidiary formed solely for such purpose, to such Subsidiary or the Capital Stock of such Subsidiary.

“Obligations” means all amounts, direct or indirect, contingent or absolute, of every type or description, and at any time existing and whenever incurred (including, without limitation, after the commencement of any bankruptcy proceeding), owing to the Administrative Agent or any Lender pursuant to the terms of this Agreement or any other Credit Document.

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.

“Outstanding Loans” means, as to any Lender at any time, the aggregate principal amount of all Loans made or maintained by such Lender then outstanding; provided, however, that for purposes of any calculation of the Outstanding Loans, any then outstanding Swingline Loans shall be deemed allocated among the Lenders (other than the Swingline Lender in its capacity as such) in accordance with their respective Applicable Percentages.

“Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

“Participant” has the meaning set forth in Section 11.04.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

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“Pricing Grid” means the pricing grid attached hereto as Annex A.

“Prime Rate” means the rate of interest per annum publicly announced from time to time by Barclays as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“Project” means an energy or power generation, transmission or distribution facility (including, without limitation, a thermal energy generation, transmission or distribution facility and an electric power generation, transmission or distribution facility (including, without limitation, a cogeneration facility)), a gas production, transportation or distribution facility, or a minerals extraction, processing or distribution facility, together with (a) all related electric power transmission, fuel supply and fuel transportation facilities and power supply, thermal energy supply, gas supply, minerals supply and fuel contracts, (b) other facilities, services or goods that are ancillary, incidental, necessary or reasonably related to the marketing, development, construction, management, servicing, ownership or operation of such facility, (c) contractual arrangements with customers, suppliers and contractors in respect of such facility, and (d) any infrastructure facility related to such facility, including, without limitation, for the treatment or management of waste water or the treatment or remediation of waste, pollution or potential pollutants.

“Project Financing” means Indebtedness incurred by a Project Financing Subsidiary to finance (a) the development and operation of the Project such Project Financing Subsidiary was formed to develop or (b) activities incidental thereto; provided that such Indebtedness does not include recourse to the Guarantor or any of its other Subsidiaries other than (x) recourse to the Capital Stock in any such Project Financing Subsidiary, and (y) recourse pursuant to a Contingent Guaranty.

“Project Financing Subsidiary” means any Subsidiary of the Guarantor (a) that (i) is not a Material Subsidiary, and (ii) whose principal purpose is to develop a Project and activities incidental thereto (including, without limitation, the financing and operation of such Project), or to become a partner, member or other equity participant in a partnership, limited liability company or other entity having such a principal purpose, and (b) substantially all the assets of which are limited to the assets relating to the Project being developed or Capital Stock in such partnership, limited liability company or other entity (and substantially all of the assets of any such partnership, limited liability company or other entity are limited to the assets relating to such Project); provided that such Subsidiary incurs no Indebtedness other than in respect of a Project Financing.

“Register” has the meaning set forth in Section 11.04.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

“Request for Issuance” has the meaning set forth in Section 2.04.

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“Required Lenders” means, subject to the terms of Section 2.20, Lenders having more than 50% in aggregate amount of the Commitments, or if the Commitments shall have been terminated, of the Total Outstanding Principal.

“Responsible Officer” of a Credit Party means any of (a) the President, the chief financial officer, the chief accounting officer and the Treasurer of such Credit Party and (b) any other officer of such Credit Party whose responsibilities include monitoring compliance with this Agreement.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at such time.

“Revolving Loan” means a Loan made pursuant to Section 2.02.

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill Companies, Inc., and any successor thereto.

“Subsidiary” means, with respect to any Person, any corporation or other entity of which at least a majority of the outstanding shares of stock or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other managers of such corporation or other entity (irrespective of whether or not at the time stock or other equity interests of any other class or classes of such corporation or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of the Subsidiaries of such Person.

“Substantial Subsidiaries” has the meaning set forth in Section 8.01.

“Swingline Commitment” means, for the Swingline Lender, the amount set forth as the Swingline Lender’s Swingline Commitment on Schedule 2.01 hereto.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.

“Swingline Facility Amount” has the meaning specified in Section 2.01(b).

“Swingline Loan” means a loan made by the Swingline Lender pursuant to the terms of this Agreement.

“Swingline Lender” means Barclays and any successor thereto pursuant to Section 2.03(d).

“Swingline Rate” means the per annum rate equal to the Alternate Base Rate plus the Applicable Rate.

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“Swingline Request” means a request by the Borrower for the Swingline Lender to make a Swingline Loan, which shall be in substantially the form of Exhibit D (or such other form as shall be approved by the Swingline Lender) and shall be delivered to the Swingline Lender and the Administrative Agent in writing, or by telephone, immediately confirmed in writing.

“Syndication Agent” means Credit Suisse AG, Cayman Islands Branch, in its capacity as syndication agent for the Lenders hereunder.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, penalties and additions to tax imposed thereon or in connection therewith.

“Termination Date” means the earliest of (a) May 15, 2017 and (b) the date upon which the Commitments are terminated pursuant to Section 8.1 or otherwise.

“Total Outstanding Principal” means the aggregate amount of the Outstanding Loans of all Lenders plus the aggregate LC Exposure.

“Transactions” means the execution, delivery and performance by the Borrower and the Guarantor of this Agreement and the Borrowing of Loans and issuances of Letters of Credit hereunder.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the LIBO Rate or the Alternate Base Rate.

“Unreimbursed LC Disbursement” means the unpaid obligation (or, if the context so requires, the amount of such obligation) of the Borrower to reimburse the applicable LC Bank for a payment made by such LC Bank under a Letter of Credit, but shall not include any portion of such obligation that has been repaid with the proceeds of, or converted to, Loans hereunder.

“Utility Subsidiary” means a Subsidiary of the Guarantor that is subject to regulation by a Governmental Authority (federal, state or otherwise) having authority to regulate utilities, and any Wholly-Owned Subsidiary thereof.

“Wholly-Owned Subsidiary” means, with respect to any Person, any corporation or other entity of which all of the outstanding shares of stock or other ownership interests in which, other than directors’ qualifying shares (or the equivalent thereof), are at the time directly or indirectly owned or controlled by such Person or one or more of the Subsidiaries of such Person.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Sections 4201, 4203 and 4205 of ERISA.

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SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “or” shall not be exclusive. The word “will” shall be construed to have the same meaning and effect as the word “shall”. The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders and decrees, of all Governmental Authorities. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. The terms “knowledge of”, “awareness of” and “receipt of notice of” in relation to a Credit Party, and other similar expressions, mean knowledge of, awareness of, or receipt of notice by, a Responsible Officer of such Credit Party.

SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Effective Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made

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(i) without giving effect to any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Board Staff Position APB 14-1 to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

SECTION 1.05. Amendment and Restatement of the Existing Credit Agreement.

The parties to this Agreement agree that, upon (i) the execution and delivery by each of the parties hereto of this Agreement and (ii) satisfaction of the conditions set forth in Section 3.01, the terms and provisions of the Existing Credit Agreement shall be and hereby are amended, superseded and restated in their entirety by the terms and provisions of this Agreement. This Agreement is not intended to and shall not constitute a novation. All Loans made and Obligations incurred under the Existing Credit Agreement which are outstanding on the Effective Date shall continue as Loans and Obligations under (and shall be governed by the terms of) this Agreement and the other Credit Documents. Without limiting the foregoing, upon the effectiveness hereof: (a) all references in the “Credit Documents” (as defined in the Existing Credit Agreement) to the “Administrative Agent”, the “Credit Agreement” and the “Credit Documents” shall be deemed to refer to the Administrative Agent, this Agreement and the Credit Documents, (b) the Existing Letters of Credit which remain outstanding on the Effective Date shall continue as Letters of Credit under (and shall be governed by the terms of) this Agreement, (c) all obligations constituting “Obligations” with any Lender or any Affiliate of any Lender which are outstanding on the Effective Date shall continue as Obligations under this Agreement and the other Credit Documents (subject to clause (f) below), (d) the Administrative Agent shall make such reallocations, sales, assignments or other relevant actions in respect of each Lender’s credit exposure under the Existing Credit Agreement as are necessary in order that each such Lender’s Revolving Credit Exposure and outstanding Revolving Loans hereunder reflects such Lender’s Applicable Percentage of the outstanding aggregate Revolving Credit Exposures on the Effective Date, (e) the Borrower hereby agrees to compensate each Lender for any and all losses, costs and expenses incurred by such Lender in connection with the sale and assignment of any Eurodollar Loans (including the “Eurodollar Loans” under the Existing Credit Agreement) and such reallocation described above, in each case on the terms and in the manner set forth in Section 2.16 hereof and (f) each Departing Lender’s “Commitment” under the Existing Credit Agreement shall be terminated, each Departing Lender shall have received payment in full of all of the “Obligations” under the Existing Credit Agreement (other than obligations to pay fees and expenses with respect to which the Borrower has not received an invoice, contingent indemnity obligations and other contingent obligations owing to it under the “Credit Documents” as defined in the Existing Credit Agreement) and the Departing Lenders shall not be Lenders hereunder.

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ARTICLE II

THE CREDITS

SECTION 2.01. Commitments.

(a) Subject to the terms and conditions set forth herein, each Lender severally agrees to make Revolving Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (ii) the sum of the Revolving Credit Exposures of all of the Lenders exceeding the Aggregate Commitments.

(b) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (i) the aggregate principal amount of all Swingline Loans made by the Swingline Lender then outstanding under this Agreement exceeding the Swingline Lender’s Swingline Commitment, (ii) the aggregate principal amount of all Swingline Loans then outstanding under this Agreement exceeding $250,000,000 (the “Swingline Facility Amount”), (iii) any Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (iv) the sum of the Revolving Credit Exposures of all of the Lenders exceeding the Aggregate Commitments.

(c) Subject to the terms and conditions set forth herein, each LC Bank agrees to issue, extend or amend Letters of Credit and each Lender severally agrees to participate in such Letters of Credit, in each case as set forth herein, from time to time during the Availability Period in an aggregate stated amount that will not result in (i) the aggregate LC Outstandings under this Agreement exceeding $500,000,000, (ii) any Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment, (iii) the aggregate LC Outstandings of all Letters of Credit issued by any LC Bank exceeding at any time such LC Bank’s Letter of Credit Commitment or (iii) the sum of the Revolving Credit Exposures of all of the Lenders exceeding the Aggregate Commitments.

(d) Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans and Swingline Loans and request the issuance, extension or amendment of Letters of Credit.

SECTION 2.02. Revolving Loans and Revolving Borrowings; Requests for Borrowings.

(a) Each Revolving Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. Any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.03.

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(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $5,000,000 and not less than $10,000,000. At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000; provided that an ABR Revolving Borrowing may be to an aggregate amount that is equal to the entire unused balance of the Aggregate Commitments. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of ten Eurodollar Revolving Borrowings outstanding under this Agreement.

(d) To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the Business Day before the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in substantially the form of Exhibit C (or such other form as shall be approved by the Administrative Agent) signed by an Authorized Officer of the Borrower. Each such telephonic and written Borrowing Request shall specify the following information:

(i) the aggregate amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

(e) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Eurodollar Borrowing if the Interest Period requested with respect thereto would end after the Termination Date.

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SECTION 2.03. Swingline Loans. (a) Each Swingline Loan to be made by the Swingline Lender shall be made on notice given by the Borrower to the Swingline Lender and the Administrative Agent via fax transmission in accordance with Section 11.01 hereof not later than 11:00 A.M. (New York City time) on the borrowing date of the proposed Swingline Loan (which shall be a Business Day) or such later time as the Swingline Lender and the Administrative Agent may agree. Upon receipt of any Swingline Request, the Swingline Lender shall give to the Administrative Agent prompt notice thereof by fax transmission, and shall notify the Borrower and the Administrative Agent of the Swingline Rate to be applicable thereto. The Swingline Lender shall, before 2:00 P.M. (New York City time) on the borrowing date of such Swingline Loan, make such Swingline Loan available to the Administrative Agent, in same day funds, and, after the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower to an account within the United States of America specified in the relevant Swingline Request or, if not so specified, in accordance with Section 2.05.

(b) Each Swingline Loan shall bear interest at the Swingline Rate and shall mature on the first to occur of: (i) the date specified in the relevant Swingline Request, (ii) the date that is five days following the date such Swingline Loan was made and (iii) the Termination Date. At no time shall more than a total of two Swingline Loans be outstanding under this Agreement.

(c) At any time upon written demand by the Swingline Lender, with a copy of such demand to the Administrative Agent, and automatically upon the occurrence of an Event of Default, each other Lender shall purchase from the Swingline Lender, and the Swingline Lender shall sell and assign to each such other Lender, such other Lender’s pro rata share (based on its Applicable Percentage) of the Swingline Loans of the Swingline Lender outstanding as of the date of such demand or occurrence, as the case may be, by making available to the Administrative Agent for the account of the Swingline Lender an amount in same day funds equal to the portion of the principal amount of each outstanding Swingline Loan to be purchased by such Lender. The Borrower hereby agrees to each such sale and assignment. Each Lender agrees to pay to the Administrative Agent for the account of the Swingline Lender its pro rata share (based on its Applicable Percentage) of each outstanding Swingline Loan purchased pursuant to this clause (c) on (i) the Business Day on which demand therefor is made by the Swingline Lender, provided, that, notice of such demand is received by such Lender not later than 11:00 A.M. (New York City time) on such Business Day, (ii) the first Business Day next succeeding such demand, if notice of such demand is received after such time or (iii) the first Business Day next succeeding the date such Lender has actual knowledge of the occurrence of such Event of Default. Upon any such assignment by the Swingline Lender to any other Lender of a portion of any Swingline Loan, the Swingline Lender represents and warrants to such other Lender that the Swingline Lender is the legal and beneficial owner of the interest being assigned by it, but makes no other representation or warranty and assumes no responsibility with respect to such Swingline Loan, the Credit Documents or the Borrower. If and to the extent that any Lender shall not have so made its participated portion of such Swingline Loan or portion thereof available to the Administrative Agent for the account of the Swingline Lender, such Lender agrees to pay to the Swingline Lender forthwith on demand such amount together with interest thereon for each day from the date of demand by the Swingline Lender until the date such amount is paid to the Swingline Lender, at the Federal Funds Effective Rate. If such Lender shall pay such amount to the Swingline Lender on any Business Day, such amount so paid in

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respect of principal shall constitute an ABR Revolving Loan made by such Lender on such Business Day for all purposes of this Agreement, and the outstanding principal amount of the relevant Swingline Loan(s) shall be reduced accordingly by such amount on such Business Day. The obligation of each other Lender to purchase its pro rata share of the Swingline Lender’s Swingline Loans in accordance with this subsection shall be absolute and unconditional, notwithstanding the occurrence of any circumstances, including, without limitation any Event of Default or any setoff, deduction or other defense asserted by the Borrower or any other Person, except that any Lender shall have the right to bring suit against the Swingline Lender, and the Swingline Lender shall be liable to such Lender, to the extent of any direct, as opposed to consequential, damages suffered by such Lender which a court of competent jurisdiction in a final and non-appealable judgment determines were caused by the Swingline Lender’s wilful misconduct or gross negligence.

(d) Subject to the appointment and acceptance of a successor Swingline Lender as provided in this paragraph, the Borrower may, upon not less than ten (10) Business Days prior notice to the Administrative Agent and the Lenders, replace the existing Swingline Lender with the consent of the Administrative Agent (which consent shall not unreasonably be withheld). Upon the acceptance of its appointment as Swingline Lender hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the replaced Swingline Lender, and the replaced Swingline Lender shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Swingline Lender shall be as agreed between the Borrower and such successor. After the Swingline Lender’s replacement hereunder, the provisions of this Article and Section 11.03 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Swingline Lender.

SECTION 2.04. Letters of Credit

(a) LC Banks. Subject to the terms and conditions hereof, the Borrower may from time to time request any LC Bank to issue, extend or amend one or more Letters of Credit hereunder. Any such request by the Borrower shall be notified to the Administrative Agent at least five Business Days prior to the date upon which the Borrower proposes that the applicable LC Bank issue, extend or amend such Letter of Credit and in the case of an extension request, shall be in substantially the form of Exhibit E (or such other form as shall be approved by the Administrative Agent and the applicable LC Bank). At no time shall (i) the aggregate LC Outstandings exceed the sum of the Commitments, (ii) the sum of the aggregate LC Outstandings under this Agreement exceed $500,000,000 or (iii) the aggregate LC Outstandings of all Letters of Credit issued by any LC Bank exceed at any time such LC Bank’s Letter of Credit Commitment.

(b) Letters of Credit. Each Letter of Credit shall be issued (or the stated maturity thereof extended or terms thereof modified or amended) on not less than five Business Days’ prior written notice thereof to the Administrative Agent (which shall promptly distribute copies thereof to the Lenders) and the applicable LC Bank. Each such notice (a “Request for Issuance”) shall specify (i) the date (which shall be a Business Day) of issuance of such Letter of Credit (or the date of effectiveness of such extension, modification or amendment) and the stated expiry date thereof (which shall be not later than the Termination Date), (ii) the proposed stated amount of

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such Letter of Credit and (iii) such other information as shall demonstrate compliance of such Letter of Credit with the requirements specified therefor in this Agreement. Each Request for Issuance shall be irrevocable unless modified or rescinded by the Borrower not less than two days prior to the proposed date of issuance (or effectiveness) specified therein. If the applicable LC Bank shall have approved the form of such Letter of Credit (or such extension, modification or amendment thereof), such LC Bank shall not later than 11:00 A.M. (New York City time) on the proposed date specified in such Request for Issuance, and upon fulfillment of the applicable conditions precedent and the other requirements set forth herein and as otherwise agreed to between such LC Bank and the Borrower, issue (or extend, amend or modify) such Letter of Credit and provide notice and a copy thereof to the Administrative Agent. The Administrative Agent shall furnish (x) to each Lender, a copy of such notice and (y) to each Lender that may so request, a copy of such Letter of Credit.

(c) Reimbursement on Demand. Subject to the provisions of Section 2.04(d) hereof, the Borrower hereby agrees to pay (whether with the proceeds of Loans made pursuant to this Agreement or otherwise) to the applicable LC Bank on demand (i) on and after each date on which such LC Bank shall pay any amount under any Letter of Credit issued by such LC Bank a sum equal to such amount so paid (which sum shall constitute a demand loan from such LC Bank to the Borrower from the date of such payment by such LC Bank until so paid by the Borrower), plus (ii) interest on any amount remaining unpaid by the Borrower to such LC Bank under clause (i), above, from the date such sum becomes payable on demand until payment in full, at a rate per annum which is equal to 2% plus the then applicable Alternate Base Rate until paid in full.

(d) Loans for Unreimbursed LC Disbursements. If any LC Bank shall make any payment under any Letter of Credit and if the conditions precedent set forth in Section 3.02 of this Agreement have been satisfied as of the date of such honor, then, each Lender’s payment made to such LC Bank pursuant to paragraph (c) of this Section 2.04 in respect of such Unreimbursed LC Disbursement shall be deemed to constitute an ABR Loan made for the account of the Borrower by such Lender. Each such ABR Loan shall mature and be due and payable on the earlier of (i) the first March 31, June 30, September 30 or December 31 to occur following the date such ABR Loan is made and (ii) the Termination Date.

(e) Participation; Reimbursement of the LC Banks.

(i) Upon the issuance of any Letter of Credit by any LC Bank (and, in the case of the Letters of Credit identified on Schedule 2.04, on the Effective Date), such LC Bank hereby sells and transfers to each Lender, and each Lender hereby acquires from such LC Bank, an undivided interest and participation to the extent of such Lender’s Applicable Percentage in and to such Letter of Credit, including the obligations of such LC Bank under and in respect thereof and the Borrower’s reimbursement and other obligations in respect thereof, whether now existing or hereafter arising.

(ii) If any LC Bank shall not have been reimbursed in full for any payment made by such LC Bank under any Letter of Credit issued by such LC Bank on the date of such payment, such LC Bank shall promptly notify the Administrative Agent and the Administrative Agent shall promptly notify each Lender of such non-reimbursement and

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the amount thereof. Upon receipt of such notice from the Administrative Agent, each Lender shall pay to the Administrative Agent for the account of such LC Bank an amount equal to such Lender’s Applicable Percentage of such Unreimbursed LC Disbursement, plus interest on such amount at a rate per annum equal to the Federal Funds Rate from the date of such payment by such LC Bank to the date of payment to such LC Bank by such Lender. All such payments by each Lender shall be made in United States dollars and in same day funds not later than 3:00 P.M. (New York City time) on the later to occur of (A) the Business Day immediately following the date of such payment by the applicable LC Bank and (B) the Business Day on which such Lender shall have received notice of such non-reimbursement; provided, however, that if such notice is received by such Lender later than 11:00 A.M. (New York City time) on such Business Day, such payment shall be payable on the next Business Day. Each Lender agrees that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. If a Lender shall have paid to the applicable LC Bank its ratable portion of any Unreimbursed LC Disbursement, together with all interest thereon required by the second sentence of this subparagraph (ii), such Lender shall be entitled to receive its ratable share of all interest paid by the Borrower in respect of such Unreimbursed LC Disbursement. If such Lender shall have made such payment to the applicable LC Bank, but without all such interest thereon required by the second sentence of this subparagraph (ii), such Lender shall be entitled to receive its ratable share of the interest paid by the Borrower in respect of such Unreimbursed LC Disbursement only from the date it shall have paid all interest required by the second sentence of this subparagraph (ii).

(iii) The failure of any Lender to make any payment to the applicable LC Bank in accordance with subparagraph (ii) above, shall not relieve any other Lender of its obligation to make payment, but neither such LC Bank nor any Lender shall be responsible for the failure of any other Lender to make such payment. If any Lender shall fail to make any payment to the applicable LC Bank in accordance with subparagraph (ii) above, then such Lender shall pay to such LC Bank forthwith on demand such corresponding amount together with interest thereon, for each day until the date such amount is repaid to such LC Bank at the Federal Funds Rate. Nothing herein shall in any way limit, waive or otherwise reduce any claims that any party hereto may have against any non-performing Lender.

(f) Obligations Absolute. The payment obligations of each Lender under Section 2.04(e) and of the Borrower under Section 2.04(c) of this Agreement in respect of any payment under any Letter of Credit and any Loan made under Section 2.04(d) shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances:

(i) any lack of validity or enforceability of any Credit Document or any other agreement or instrument relating thereto or to such Letter of Credit;

(ii) any amendment or waiver of, or any consent to departure from, all or any of the Credit Documents;

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(iii) the existence of any claim, set-off, defense or other right which the Borrower may have at any time against any beneficiary, or any transferee, of such Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), any LC Bank, or any other Person, whether in connection with this Agreement, the transactions contemplated herein or by such Letter of Credit, or any unrelated transaction;

(iv) any statement or any other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(v) payment in good faith by the applicable LC Bank under the Letter of Credit issued by such LC Bank against presentation of a draft or certificate which does not comply with the terms of such Letter of Credit; or

(vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

(g) Liability of LC Banks and the Lenders. The Borrower assumes all risks of the acts and omissions of any beneficiary or transferee of any Letter of Credit. Neither the LC Banks, the Lenders nor any of their respective officers, directors, employees, agents or Affiliates shall be liable or responsible for (i) the use that may be made of such Letter of Credit or any acts or omissions of any beneficiary or transferee thereof in connection therewith; (ii) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (iii) payment by any LC Bank against presentation of documents that do not comply with the terms of such Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit; or (iv) any other circumstances whatsoever in making or failing to make payment under such Letter of Credit, except that the Borrower or any Lender shall have the right to bring suit against the applicable LC Bank, and such LC Bank shall be liable to the Borrower and any Lender, to the extent of any direct, as opposed to consequential, damages suffered by the Borrower or such Lender which the Borrower or such Lender proves were caused by such LC Bank’s wilful misconduct or gross negligence, including such LC Bank’s wilful or grossly negligent failure to make timely payment under such Letter of Credit following the presentation to it by the beneficiary thereof of a draft and accompanying certificate(s) which strictly comply with the terms and conditions of such Letter of Credit. In furtherance and not in limitation of the foregoing, the applicable LC Bank may accept sight drafts and accompanying certificates presented under the Letter of Credit issued by such LC Bank that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary. Notwithstanding the foregoing, no Lender shall be obligated to indemnify the Borrower for damages caused by any LC Bank’s wilful misconduct or gross negligence as determined by a court of competent jurisdiction in a final and non-appealable judgment, and the obligation of the Borrower to reimburse the Lenders hereunder shall be absolute and unconditional, notwithstanding the gross negligence or wilful misconduct of any LC Bank.

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(h) Transitional Provision. Schedule 2.04 contains a schedule of certain letters of credit issued (or deemed issued) for the account of the Borrower prior to the Effective Date. Subject to the satisfaction of the conditions contained in Sections 3.01 and 3.02, from and after the Effective Date such letters of credit shall be deemed to be Letters of Credit issued pursuant to this Section 2.04.

SECTION 2.05. Funding of Borrowings.

(a) Each Lender shall make the amount of each Loan to be made by it hereunder available to the Administrative Agent on the proposed date thereof by wire transfer of immediately available funds by 1:00 p.m., New York City time, at the Administrative Agent’s office most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account established and maintained by the Borrower at the Administrative Agent’s office in New York City.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed time of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the Federal Funds Effective Rate or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

SECTION 2.06. Interest Elections.

(a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.

(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.02 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in substantially the form of Exhibit G (or such other form as shall be approved by the Administrative Agent) and signed by the Borrower.

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(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.07. Mandatory Termination or Reduction of Commitments.

Unless previously terminated, the Commitments shall terminate on the Termination Date.

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SECTION 2.08. Mandatory Prepayments.

(a) If at any time the Total Outstanding Principal exceeds the Aggregate Commitments then in effect for any reason whatsoever (including, without limitation, as a result of any reduction in the Aggregate Commitments pursuant to Section 2.09), the Borrower shall prepay Loans or cash collateralize LC Exposure in an account with the Administrative Agent pursuant to the final paragraph of Section 8.01, as applicable, in such aggregate amount (together with accrued interest thereon to the extent required by Section 2.13) as shall be necessary so that, after giving effect to such prepayment, the Total Outstanding Principal does not exceed the Aggregate Commitments.

(b) Each prepayment of Loans pursuant to this Section 2.08 shall be accompanied by the Borrower’s payment of any amounts payable under Section 2.16 in connection with such prepayment. Prepayments of Revolving Loans shall be applied ratably to the Loans so prepaid.

SECTION 2.09. Optional Reduction of Commitments.

(a) The Borrower may at any time terminate, or from time to time reduce, the Commitments (including the unused Letter of Credit Commitments of the LC Banks); provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $10,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11, the Total Outstanding Principal would exceed the Aggregate Commitments thereafter in effect.

(b) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under Section 2.09(a) at least five Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent.

(c) Each reduction of the Commitments pursuant to this Section 2.09 shall be made ratably among the Lenders in accordance with their respective Commitments immediately preceding such reduction.

SECTION 2.10. Repayment of Loans; Evidence of Debt.

(a) The Borrower hereby unconditionally promises to pay to the Administrative Agent (i) for the account of each Lender the then unpaid principal amount of each Revolving Loan on the Termination Date, (ii) for the account of each Lender the then unpaid principal amount of each ABR Loan deemed to be made pursuant to Section 2.04(d) on the maturity date therefor as determined pursuant to Section 2.04(d) and (iii) for the account of the Swingline Lender the then unpaid principal amount of each Swingline Loan on the maturity date therefor as determined pursuant to Section 2.03.

(b) Each Lender (including the Swingline Lender) shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan (including each Swingline Loan) made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

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(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders (including the Swingline Lender) and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

(e) Any Lender (including the Swingline Lender) may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in substantially the form of Exhibit F. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 11.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.11. Optional Prepayment of Loans.

(a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing (including any Swingline Borrowing) in whole or in part, subject to prior notice in accordance with paragraph (b) of this Section.

(b) The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Borrowing, not later than 11:00 a.m., New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Each such telephonic notice of prepayment shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a prepayment notice in substantially the form of Exhibit H (or such other form as shall be approved by the Administrative Agent) and signed by the Borrower. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Revolving

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Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02, and each partial prepayment of a Swingline Borrowing shall be in an amount not less than $100,000 or any integral multiple thereof, it being understood that the foregoing minimums shall not apply to the prepayment in whole of the outstanding Revolving Loans of all Lenders or to the prepayment in whole of the outstanding Swingline Loans of the Swingline Lender. Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans included in the prepaid Revolving Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13 and by any amounts payable under Section 2.16 in connection with such prepayment.

SECTION 2.12. Fees.

(a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a facility fee (each a “Facility Fee”), which shall accrue at the Applicable Rate on the daily amount of the Commitment of such Lender (whether used or unused) during the period from and including the Effective Date to but excluding the date on which such Commitment terminates; provided that, if such Lender continues to have any Revolving Credit Exposure after its Commitment terminates, then such Facility Fee shall continue to accrue on the daily amount of such Lender’s Revolving Credit Exposure from and including the date on which its Commitment terminates to but excluding the date on which such Lender ceases to have any Revolving Credit Exposure. Accrued Facility Fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the Effective Date; provided that any Facility Fees accruing after the date on which the Commitments terminate shall be payable on demand. All Facility Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a letter of credit risk participation fee (each a “LC Risk Participation Fee”), which shall accrue at the Applicable Rate on the average daily amount of the LC Outstandings during the period from and including the Effective Date to but excluding the Termination Date or such later date as on which there shall cease to be any LC Outstandings. Accrued LC Risk Participation Fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the Effective Date; provided that any LC Risk Participation Fees accruing after the date on which the Commitments terminate shall be payable on demand. All LC Risk Participation Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The Borrower shall also pay to the LC Bank for its own account (x) a fronting fee, which fronting fee shall accrue at a per annum rate agreed upon between the Borrower and the applicable LC Bank on the average daily amount of such LC Outstandings in respect of all Letters of Credit issued by such LC Bank during the period each such Letter of Credit shall be outstanding, which fronting fee shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which such Letter of Credit terminates, and (y) documentary and processing charges in connection with the issuance, or modification cancellation, negotiation, or transfer of, and draws under Letters of Credit issued by such LC Bank in accordance with such LC Bank’s standard schedule for such charges as in effect from time to time.

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(c) The Borrower agrees to pay to the Administrative Agent and each of the Lead Lenders, in each case, for its own account and for the account of the other Persons entitled thereto, the fees provided for in the applicable fee letter dated April 23, 2012, executed and delivered with respect to the credit facility provided for herein, in each case, in the amounts and at the times set forth therein and in immediately available funds.

(d) All fees payable hereunder, with the exception of the fees paid directly to an LC Bank pursuant to paragraph (b) of this Section, shall be paid to the Administrative Agent (for the ratable distribution, in the case of Facility Fees and LC Risk Participation Fees, to the Lenders) on the dates due, in immediately available funds. Fees due and paid shall not be refundable under any circumstances.

SECTION 2.13. Interest.

(a) The Loans comprising each ABR Borrowing shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Rate.

(b) The Loans comprising each Eurodollar Borrowing shall bear interest at a rate per annum equal to the LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c) Each Swingline Loan shall bear interest at a rate per annum equal to the Swingline Rate, as determined for such Swingline Loan and notified by the Swingline Lender to the Borrower in accordance with Section 2.03(a).

(d) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided above or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided above.

(e) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, (iii) in the event of any conversion of any Eurodollar Revolving Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion and (iv) all accrued interest shall be payable upon termination of the Commitments.

(f) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

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SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent reasonably determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the LIBO Rate for such Interest Period; or

(b) the Administrative Agent is advised by the Required Lenders that the LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request requests a Eurodollar Revolving Borrowing, such Borrowing shall be made as an ABR Borrowing.

SECTION 2.15. Increased Costs. (a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any LC Bank (except any such reserve requirement described in paragraph (e) of this Section);

(ii) impose on any Lender or any LC Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or participation therein or Unreimbursed LC Disbursements or Letters of Credit and participations therein; or

(iii) subject the Administrative Agent or any Lender to any Taxes (other than (A) Indemnified Taxes, (B) Excluded Taxes and (C) Other Taxes imposed on or with respect to any payment made by or on account of any obligations of any Credit Party under the Credit Documents) on its loans, loan principal, Letter of Credit Commitment or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to the Administrative Agent, such Lender or such LC Bank of making or maintaining any Loan or Unreimbursed LC Disbursement or issuing or maintaining Letters of Credit and participation interests therein (or of maintaining its obligation to make any such Loan or issue or participate in such Letter of Credit) or to reduce the amount of any sum received or receivable by the Administrative Agent, such Lender or such LC Bank hereunder (whether of principal, interest or otherwise), then the Borrower will pay to the Administrative Agent, such Lender or such LC Bank, as the case may be, such additional amount or amounts as will compensate the Administrative Agent, such Lender or such LC Bank for such additional costs incurred or reduction suffered.

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(b) If any Lender or any LC Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or such LC Bank’s capital or on the capital of its holding company, if any, as a consequence of this Agreement to a level below that which such Lender or such LC Bank or its holding company could have achieved but for such Change in Law (taking into consideration its policies and the policies of its holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender or such LC Bank, as the case may be, such additional amount or amounts as will compensate it or its holding company for any such reduction suffered.

(c) A certificate of a Lender or the applicable LC Bank, as the case may be, setting forth the amount or amounts necessary to compensate it or its holding company as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Failure or delay on the part of any Lender or any LC Bank to demand compensation pursuant to this Section shall not constitute a waiver of its right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than ninety days prior to the date that such Lender or such LC Bank notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of its intention to claim compensation therefor; provided, further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the ninety day period referred to above shall be extended to include the period of retroactive effect thereof.

(e) The Borrower shall pay (without duplication as to amounts paid under this Section 2.15) to each Lender, so long as such Lender shall be required under regulations of the Board to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Loan of such Lender, from the date of such Loan until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) the LIBO Rate for the Interest Period for such Loan from (ii) the rate obtained by dividing such LIBO Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period, payable on each date on which interest is payable on such Loan. Such additional interest determined by such Lender and notified to the Borrower and the Administrative Agent, accompanied by the calculation of the amount thereof, shall be conclusive and binding for all purposes absent manifest error.

(f) If any Lender determines that any law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain or fund Eurodollar Loans, or to determine or charge interest rates based upon the LIBO Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Loans or to convert ABR Loans to Eurodollar Loans shall be suspended until such Lender notifies the

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Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender to ABR Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Revolving Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.11(b) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, the loss to any Lender attributable to any such event shall be deemed to include an amount reasonably determined by such Lender to be equal to the excess, if any, of (x) the amount of interest that such Lender would pay for a deposit equal to the principal amount of such Loan for the period from the date of such payment, conversion, failure or assignment to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the duration of the Interest Period that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the LIBO Rate for such Interest Period, over (y) the amount of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such Lender (or an affiliate of such Lender) for dollar deposit from other banks in the eurodollar market at the commencement of such period. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.17. Taxes.

(a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if any Credit Party shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, LC Bank or Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Credit Party shall make such deductions and (iii) such Credit Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

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(b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent, each LC Bank and each Lender, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (and for any Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent, such LC Bank or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or any LC Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or any LC Bank, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a Credit Party to a Governmental Authority, such Credit Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the laws of the jurisdiction in which the Borrower or the Guarantor is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with an additional original or a photocopy, as required under applicable rules and procedures, to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as shall be necessary to permit such payments to be made without withholding or at a reduced rate. Further, in those circumstances as shall be necessary to allow payments hereunder to be made free of (or at a reduced rate of) withholding tax, each other Lender and the Administrative Agent, as applicable, shall deliver to Borrower such documentation as the Borrower may reasonably request in writing.

(f) Except with the prior written consent of the Administrative Agent, all amounts payable by a Credit Party hereunder shall be made by such Credit Party in its own name and for its own account from within the United States by a payor that is a United States person (within the meaning of Section 7701 of the Code).

(g) If a payment made to a Lender under any Credit Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (g), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

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SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-Offs.

(a) The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest or fees, or under Section 2.15, 2.16, 2.17 or 11.03, or otherwise) prior to 12:00 noon, New York City time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 745 Seventh Avenue, New York, NY 10019, except that payments pursuant to Sections 2.15, 2.16, 2.17 and 11.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in Dollars.

(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, to pay interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, to pay principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Obligations owing to it resulting in such Lender receiving payment of a greater proportion of the aggregate amount of such Obligations and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans of, or other Obligations owing to, other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans or other Obligations, as applicable; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Guarantor, the Borrower or any other Subsidiary or Affiliate of the Guarantor (as to which the provisions of this paragraph shall apply). The Borrower and the Guarantor consent to the foregoing and agree, to the extent they may effectively do so under applicable law, that any Lender acquiring a

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participation pursuant to the foregoing arrangements may exercise against the Borrower and the Guarantor rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower or the affected Guarantor in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Federal Funds Effective Rate.

(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.03(c), 2.04(e), 2.05(b) or 2.18(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

SECTION 2.19. Mitigation Obligations; Replacement of Lenders.

(a) Any Lender claiming reimbursement or compensation from the Borrower under either of Sections 2.15 and 2.17 for any losses, costs or other liabilities shall use reasonable efforts (including, without limitation, reasonable efforts to designate a different lending office of such Lender for funding or booking its Loans or to assign its rights and obligations hereunder to another of its offices, branches or affiliates) to mitigate the amount of such losses, costs and other liabilities, if such efforts can be made and such mitigation can be accomplished without such Lender suffering (i) any economic disadvantage for which such Lender does not receive full indemnity from the Borrower under this Agreement or (ii) otherwise be disadvantageous to such Lender.

(b) In determining the amount of any claim for reimbursement or compensation under Sections 2.15 and 2.17, each Lender will use reasonable methods of calculation consistent with such methods customarily employed by such Lender in similar situations.

(c) Each Lender will notify the Borrower either directly or through the Administrative Agent of any event giving rise to a claim under Section 2.15 or Section 2.17 promptly after the occurrence thereof which notice shall be accompanied by a certificate of such Lender setting forth in reasonable detail the circumstances of such claim.

(d) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in

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accordance with and subject to the restrictions contained in Section 11.04, provided that the Administrative Agent may, in its sole discretion, elect to waive the $3,500 processing and recordation fee in connection therewith), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent and each LC Bank, which consent, in the case of the Administrative Agent, shall not unreasonably be withheld and, in the case of each LC Bank, may be given or withheld in the sole discretion of such LC Bank, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

SECTION 2.20. Defaulting Lenders.

Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the Commitment of such Defaulting Lender pursuant to Section 2.12(a);

(b) the Commitment and Revolving Credit Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 11.02); provided, that this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender affected thereby;

(c) if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

(i) so long as no Default shall be continuing, all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent the sum of all non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments and to the extent the sum of each non-Defaulting Lender’s Revolving Credit Exposure, Swingline Exposure and LC Exposure does not exceed such non-Defaulting Lender’s Commitment;

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(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize for the benefit of the applicable LC Bank only the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in the last paragraph of Section 8.01 for so long as such LC Exposure is outstanding;

(iii) if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) or the applicable LC Bank pursuant to Section 2.12(b)(x) (solely with respect to any fronting fee), in each case with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

(v) if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of any LC Bank or any other Lender hereunder, all Facility Fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s Commitment that was utilized by such LC Exposure) and letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the applicable LC Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

(d) so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the LC Banks shall not be required to issue, amend or increase any Letter of Credit, unless it is reasonably satisfied that (i) the related exposure and the Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.20(c), and (ii) participating interests in any such newly made Swingline Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.20(c)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to a Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or any LC Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and no LC Bank shall be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the applicable LC Bank, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or the applicable LC Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.

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In the event that the Administrative Agent, the Borrower, the Swingline Lender and the LC Banks each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

ARTICLE III

CONDITIONS

SECTION 3.01. Conditions Precedent to the Effectiveness of this Agreement. This Agreement shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 11.02).

(a) The Administrative Agent (or its counsel) shall have received from each party thereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

(b) The Lenders, the Administrative Agent, the Arrangers and each other Person entitled to the payment of fees or the reimbursement or payment of expenses, pursuant hereto or to those certain fee letters dated April 23, 2012, executed and delivered with respect to the credit facility provided for herein, shall have received all fees required to be paid by the Effective Date (including, without limitation, all fees owing on the Effective Date under Section 2.12(c) hereof), and all expenses for which invoices have been presented on or before the Effective Date.

(c) The Administrative Agent shall have received certified copies of the resolutions of the Board of Directors of each of the Guarantor and the Borrower approving this Agreement, and of all documents evidencing other necessary corporate action and governmental and regulatory approvals with respect to this Agreement.

(d) The Administrative Agent shall have received from each of the Borrower and the Guarantor, to the extent generally available in the relevant jurisdiction, a copy of a certificate or certificates of the Secretary of State (or other appropriate public official) of the jurisdiction of its incorporation, dated reasonably near the Effective Date, (i) listing the charters of the Borrower or the Guarantor, as the case may be, and each amendment thereto on file in such office and certifying that such amendments are the only amendments to the Borrower’s or the Guarantor’s charter, as the case may be, on file in such office, and (ii) stating, in the case of the Borrower, that the Borrower is authorized to transact business under the laws of the jurisdiction of its place of incorporation, and, in the case of the Guarantor, that the Guarantor is duly incorporated and in good standing under the laws of the jurisdiction of its place of incorporation.

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(e) (i) The Administrative Agent shall have received a certificate or certificates of each of the Borrower and the Guarantor, signed on behalf of the Borrower and the Guarantor respectively, by a the Secretary, an Assistant Secretary or a Responsible Officer thereof, dated the Effective Date, certifying as to (A) the absence of any amendments to the charter of the Borrower or the Guarantor, as the case may be, since the date of the certificates referred to in paragraph (d) above, (B) a true and correct copy of the bylaws of each of the Borrower or the Guarantor, as the case may be, as in effect on the Effective Date, (C) the absence of any proceeding for the dissolution or liquidation of the Borrower or the Guarantor, as the case may be, (D) the truth, in all material respects, of the representations and warranties contained in the Credit Documents to which the Borrower or the Guarantor is a party, as the case may be, as though made on and as of the Effective Date, and (E) the absence, as of the Effective Date, of any Default or Event of Default; and (ii) each of such certifications shall be true.

(f) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of each of the Guarantor and the Borrower certifying the names and true signatures of the officers of Guarantor or the Borrower, as the case may be, authorized to sign, and signing, this Agreement and the other Credit Documents to be delivered hereunder on or before the Effective Date.

(g) The Administrative Agent shall have received from Schiff Hardin LLP, counsel for the Guarantor and the Borrower, a favorable opinion, substantially in the form of Exhibit B hereto and as to such other matters as any Lender through the Administrative Agent may reasonably request.

SECTION 3.02. Conditions Precedent to Each Extension of Credit. The obligation of each Lender to make any Extension of Credit and of each LC Bank to issue, extend (other than an extension pursuant to an automatic extension provision set forth in the applicable Letter of Credit) or amend any Letter of Credit (including the initial Extension of Credit but excluding any conversion or continuation of any Loan) shall be subject to the satisfaction (or waiver in accordance with Section 11.02) of each of the following conditions:

(a) The representations and warranties of the Guarantor and the Borrower set forth in this Agreement (other than the representation and warranty set forth in Section 4.01(f)) shall be true and correct in all material respects on and as of the date of such Extension of Credit, except to the extent that such representations and warranties are specifically limited to a prior date, in which case such representations and warranties shall be true and correct in all material respects on and as of such prior date.

(b) After giving effect to (A) such Extension of Credit, together with all other Extensions of Credit to be made contemporaneously therewith, and (B) the repayment of any Loans or Unreimbursed LC Disbursements that are to be contemporaneously repaid at the time such Loan is made, such Extension of Credit will not result in the sum of the then Total Outstanding Principal exceeding the Aggregate Commitments.

(c) Such Extension of Credit will comply with all other applicable requirements of Article II, including, without limitation Sections 2.01, 2.02, 2.03 and 2.04, as applicable.

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(d) At the time of and immediately after giving effect to such Extension of Credit, no Default or Event of Default shall have occurred and be continuing.

(e) In the case of a Revolving Loan, the Administrative Agent shall have timely received a Borrowing Request; and, in the case of a Letter of Credit issuance, extension (other than an extension pursuant to an automatic extension provision set forth in the applicable Letter of Credit) or amendment, a Request for Issuance.

Each Extension of Credit and the acceptance by the Borrower of the benefits thereof shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a), (b), (c) and (d) of this Section.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Credit Parties. Each of the Borrower and the Guarantor represents and warrants as follows:

(a) Each of the Borrower and the Guarantor is a corporation duly organized, validly existing and, in the case of the Borrower, authorized to transact business under the laws of the State of its incorporation, and, in the case of the Guarantor, in good standing under the laws of the State of its incorporation.

(b) The execution, delivery and performance by each of the Credit Parties of the Credit Documents to which it is a party (i) are within such Credit Party’s corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) do not contravene (A) such Credit Party’s charter or by-laws, as the case may be, or (B) any law, rule or regulation, or any material Contractual Obligation or legal restriction, binding on or affecting such Credit Party or any Material Subsidiary, as the case may be, and (iv) do not require the creation of any Lien on the property of such Credit Party or any Material Subsidiary under any Contractual Obligation binding on or affecting such Credit Party or any Material Subsidiary.

(c) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person is required for the due execution, delivery and performance by any Credit Party of this Agreement or any other Credit Document to which any of them is a party, except for such as (i) have been obtained or made and that are in full force and effect or (ii) are not presently required under applicable law and have not yet been applied for.

(d) Each Credit Document to which any Credit Party is a party is a legal, valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

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(e) The consolidated balance sheet of the Guarantor and its Subsidiaries as at December 31, 2011, and the related statements of income and retained earnings of the Guarantor and its Subsidiaries for the fiscal year then ended, copies of which have been made available or furnished to each Lender, fairly present the financial condition of the Guarantor and its Subsidiaries as at such date and the results of the operations of the Guarantor and its Subsidiaries for the period ended on such date, all in accordance with generally accepted accounting principles consistently applied.

(f) Since December 31, 2011, there has been no material adverse change in such condition or operations, or in the business, assets, operations, condition (financial or otherwise) or prospects of any of the Credit Parties or of Columbia.

(g) There is no pending or threatened action, proceeding or investigation affecting such Credit Party before any court, governmental agency or other Governmental Authority or arbitrator that (taking into account the exhaustion of appeals) would have a Material Adverse Effect, or that (i) purports to affect the legality, validity or enforceability of this Agreement or any promissory notes executed pursuant hereto, or (ii) seeks to prohibit the ownership or operation, by any Credit Party or any of their respective Material Subsidiaries, of all or a material portion of their respective businesses or assets.

(h) The Guarantor and its Subsidiaries, taken as a whole, do not hold or carry Margin Stock having an aggregate value in excess of 10% of the value of their consolidated assets, and no part of the proceeds of any Loan or Letter of Credit hereunder will be used to buy or carry any Margin Stock.

(i) No ERISA Event has occurred, or is reasonably expected to occur, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect.

(j) Schedule B (Actuarial Information) to the 2009 Annual report (Form 5500 Series) for each Plan, copies of which have been filed with the Internal Revenue Service and made available or furnished to each Lender, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no adverse change in such funding status which may reasonably be expected to have a Material Adverse Effect.

(k) Neither the Guarantor nor any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan which may reasonably be expected to have a Material Adverse Effect.

(l) Neither the Guarantor nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title VI of ERISA, and no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA, in either such case, that could reasonably be expected to have a Material Adverse Effect.

(m) No Credit Party is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

(n) Each Credit Party has filed all tax returns (Federal, state and local) required to be filed by it and has paid or caused to be paid all taxes due for the periods covered thereby, including interest and penalties, except for any such taxes, interest or penalties which are being contested in good faith and by proper proceedings and in respect of which such Credit Party has set aside adequate reserves for the payment thereof in accordance with GAAP.

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(o) Each Credit Party and its Subsidiaries are and have been in compliance with all laws (including, without limitation, all Environmental Laws), except to the extent that any failure to be in compliance, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(p) No Subsidiary of any Credit Party is party to, or otherwise bound by, any agreement that prohibits such Subsidiary from making any payments, directly or indirectly, to such Credit Party, by way of dividends, advances, repayment of loans or advances, reimbursements of management or other intercompany charges, expenses and accruals or other returns on investment, or any other agreement that restricts the ability of such Subsidiary to make any payment, directly or indirectly, to such Credit Party, other than prohibitions and restrictions permitted to exist under Section 6.01(e).

(q) The information, exhibits and reports furnished by the Guarantor or any of its Subsidiaries to the Administrative Agent or to any Lender in connection with the negotiation of, or compliance with, the Credit Documents, taken as a whole, do not contain any material misstatement of fact and do not omit to state a material fact or any fact necessary to make the statements contained therein not misleading in light of the circumstances made.

ARTICLE V

AFFIRMATIVE COVENANTS

SECTION 5.01. Affirmative Covenants. So long as any Lender shall have any Commitment hereunder or any principal of any Loan, Unreimbursed LC Disbursement, interest or fees payable hereunder shall remain unpaid or any Letter of Credit shall remain outstanding, each of the Credit Parties will, unless the Required Lenders shall otherwise consent in writing:

(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to comply, in all material respects with all applicable laws, rules, regulations and orders (including, without limitation, any of the foregoing relating to employee health and safety or public utilities and all Environmental Laws), unless the failure to so comply could not reasonably be expected to have a Material Adverse Effect.

(b) Maintenance of Properties, Etc. Maintain and preserve, and cause each Material Subsidiary to maintain and preserve, all of its material properties which are used in the conduct of its business in good working order and condition, ordinary wear and tear excepted, if the failure to do so could reasonably be expected to have a Material Adverse Effect.

(c) Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or upon its property, and (ii) all legal claims which, if unpaid, might by law become a lien upon its property; provided, however, that neither any Credit Party nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim which is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained.

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(d) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually obtained by companies engaged in similar businesses of comparable size and financial strength and owning similar properties in the same general areas in which such Credit Party or such Subsidiary operates, or, to the extent such Credit Party or Subsidiary deems it reasonably prudent to do so, through its own program of self-insurance.

(e) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause each Material Subsidiary to preserve and maintain, its corporate existence, rights (charter and statutory) and franchises, except as otherwise permitted under this Agreement; provided that that no such Person shall be required to preserve any right or franchise with respect to which the Board of Directors of such Person has determined that the preservation thereof is no longer desirable in the conduct of the business of such Person and that the loss thereof is not disadvantageous in any material respect to any Credit Party or the Lenders.

(f) Visitation Rights. At any reasonable time and from time to time, permit the Administrative Agent or any of the Lenders or any agents or representatives thereof, on not less than five Business Days’ notice (which notice shall be required only so long as no Default shall be occurred and be continuing), to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, such Credit Party or any of its Subsidiaries, and to discuss the affairs, finances and accounts of the Credit Parties and their respective Subsidiaries with any of their respective officers and with their independent certified public accountants; subject, however, in all cases to the imposition of such conditions as the affected Credit Party or Subsidiary shall deem necessary based on reasonable considerations of safety and security and provided that so long as no Default or Event of Default shall have occurred and be continuing, each Lender will be limited to one visit each year.

(g) Keeping of Books. (i) Keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all material financial transactions and the assets and business of each of the Credit Parties and each of their respective Subsidiaries, and (ii) maintain, and cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with generally accepted accounting principles consistently applied.

(h) Reporting Requirements. Deliver to the Administrative Agent for distribution to the Lenders:

(i) as soon as available and in any event within 60 days after the end of each of the first three quarters of each fiscal year of the Guarantor (or, if earlier, concurrently with the filing thereof with the Securities and Exchange Commission or any national securities exchange in accordance with applicable law or regulation), balance sheets of the Guarantor and its Consolidated Subsidiaries in comparative form as of the end of such quarter and statements of income and retained earnings of the Guarantor and its Consolidated Subsidiaries for the period commencing at the end of the previous fiscal year of the Guarantor and ending with the end of such quarter, each prepared in accordance with generally accepted accounting principles consistently applied, subject to normal year-end audit adjustments, certified by the chief financial officer of the Guarantor.

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(ii) as soon as available and in any event within 90 days after the end of each fiscal year of the Guarantor (or, if earlier, concurrently with the filing thereof with the Securities and Exchange Commission or any national securities exchange in accordance with applicable law or regulation), a copy of the audit report for such year for the Guarantor and its Consolidated Subsidiaries containing financial statements for such year prepared in accordance with generally accepted accounting principles consistently applied as reported on by independent certified public accountants of recognized national standing acceptable to the Required Lenders, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards;

(iii) concurrently with the delivery of financial statements pursuant to clauses (i) and (ii) above or the notice relating thereto contemplated by the final sentence of this Section 5.01(h), a certificate of a senior financial officer of each of the Guarantor and the Borrower (A) to the effect that no Default or Event of Default has occurred and is continuing (or, if any Default or Event of Default has occurred and is continuing, describing the same in reasonable detail and describing the action that the Guarantor or the Borrower, as the case may be, has taken and proposes to take with respect thereto), and (B) in the case of the certificate relating to the Guarantor, setting forth calculations, in reasonable detail, establishing Borrower’s compliance, as at the end of such fiscal quarter, with the financial covenant contained in Article VII;

(iv) as soon as possible and in any event within five days after the occurrence of each Default or Event of Default continuing on the date of such statement, a statement of the chief financial officer of the Borrower setting forth details of such Event of Default or event and the action which the Borrower has taken and proposes to take with respect thereto;

(v) promptly after the sending or filing thereof, copies of all reports which the Guarantor sends to its stockholders, and copies of all reports and registration statements (other than registration statements filed on Form S-8) that the Guarantor, the Borrower or any Subsidiary of the Guarantor or the Borrower, files with the Securities and Exchange Commission;

(vi) promptly and in any event within 10 days after the Guarantor knows or has reason to know that any material ERISA Event has occurred, a statement of the chief financial officer of the Borrower describing such ERISA Event and the action, if any, which the Guarantor or any affected ERISA Affiliate proposes to take with respect thereto;

(vii) promptly and in any event within two Business Days after receipt thereof by the Guarantor (or knowledge being obtained by the Guarantor of the receipt thereof by any ERISA Affiliate), copies of each notice from the PBGC stating its intention to terminate any Plan or to have a trustee appointed to administer any Plan;

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(viii) promptly and in any event within five Business Days after receipt thereof by the Guarantor (or knowledge being obtained by the Guarantor of the receipt thereof by any ERISA Affiliate) from the sponsor of a Multiemployer Plan, a copy of each notice received by the Guarantor or any ERISA Affiliate concerning (A) the imposition of material Withdrawal Liability by a Multiemployer Plan, (B) the reorganization or termination, within the meaning of Title IV of ERISA, of any Multiemployer Plan or (C) the amount of liability incurred, or which may be incurred, by the Guarantor or any ERISA Affiliate in connection with any event described in clause (A) or (B) above;

(ix) promptly after the Guarantor has knowledge of the commencement thereof, notice of any actions, suits and proceedings before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Guarantor or any Material Subsidiary of the type described in Section 4.01(g);

(x) promptly after the Guarantor or the Borrower knows of any change in the rating of the Index Debt by S&P or Moody’s, a notice of such changed rating; and

(xi) such other information respecting the condition or operations, financial or otherwise, of the Guarantor or any of its Subsidiaries as any Lender through the Administrative Agent may from time to time reasonably request.

Notwithstanding the foregoing, the Credit Parties’ obligations to deliver the documents or information required under any of clauses (i), (ii) and (v) above shall be deemed to be satisfied upon (x) the relevant documents or information being publicly available on the Guarantor’s website or other publicly available electronic medium (such as EDGAR) within the time period required by such clause, and (y) the delivery by the Guarantor or the Borrower of notice to the Administrative Agent and the Lenders, within the time period required by such clause, that such documents or information are so available.

(i) Use of Proceeds. Use the proceeds of the Loans and the Letters of Credit hereunder for working capital and other general corporate purposes, including refinancing of existing indebtedness.

(j) Ratings. At all times maintain ratings by both Moody’s and S&P with respect to the Index Debt.

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ARTICLE VI

NEGATIVE COVENANTS

SECTION 6.01. Negative Covenants. So long as any Lender shall have any Commitment hereunder or any principal of any Loan, Unreimbursed LC Disbursement, interest or fees payable hereunder shall remain unpaid or any Letter of Credit shall remain outstanding, no Credit Party will, without the written consent of the Required Lenders:

(a) Limitation on Liens. Create or suffer to exist, or permit any of its Subsidiaries (other than a Utility Subsidiary) to create or suffer to exist, any lien, security interest, or other charge or encumbrance (collectively, “Liens”) upon or with respect to any of its properties, whether now owned or hereafter acquired, or collaterally assign for security purposes, or permit any of its Subsidiaries (other than a Utility Subsidiary) to so assign any right to receive income in each case to secure or provide for or guarantee the payment of Debt for Borrowed Money of any Person, without in any such case effectively securing, prior to or concurrently with the creation, issuance, assumption or guaranty of any such Debt for Borrowed Money, the Obligations (together with, if the Guarantor shall so determine, any other Debt for Borrowed Money of or guaranteed by the Guarantor or any of its Subsidiaries ranking equally with the Loans and Unreimbursed LC Disbursements and then existing or thereafter created) equally and ratably with (or prior to) such Debt for Borrowed Money; provided, however, that the foregoing restrictions shall not apply to or prevent the creation or existence of:

(i) (A) Liens on any property acquired, constructed or improved by the Guarantor or any of its Subsidiaries (other than a Utility Subsidiary) after the date of this Agreement that are created or assumed prior to, contemporaneously with, or within 180 days after, such acquisition or completion of such construction or improvement, to secure or provide for the payment of all or any part of the purchase price of such property or the cost of such construction or improvement; or (B) in addition to Liens contemplated by clauses (ii) and (iii) below, Liens on any property existing at the time of acquisition thereof, provided that the Liens shall not apply to any property theretofore owned by the Guarantor or any such Subsidiary other than, in the case of any such construction or improvement, (1) unimproved real property on which the property so constructed or the improvement is located, (2) other property (or improvements thereon) that is an improvement to or is acquired or constructed for specific use with such acquired or constructed property (or improvement thereof), and (3) any rights and interests (A) under any agreements or other documents relating to, or (B) appurtenant to, the property being so constructed or improved or such other property;

(ii) existing Liens on any property or indebtedness of a corporation that is merged with or into or consolidated with any Credit Party or any of its Subsidiaries; provided that such Lien was not created in contemplation of such merger or consolidation;

(iii) Liens on any property or indebtedness of a corporation existing at the time such corporation becomes a Subsidiary of any Credit Party; provided that such Lien was not created in contemplation of such occurrence;

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(iv) Liens to secure Debt for Borrowed Money of a Subsidiary of a Credit Party to a Credit Party or to another Subsidiary of the Guarantor;

(v) Liens in favor of the United States of America, any State, any foreign country or any department, agency or instrumentality or political subdivision of any such jurisdiction, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any Debt for Borrowed Money incurred for the purpose of financing all or any part of the purchase price of the cost of constructing or improving the property subject to such Liens, including, without limitation, Liens to secure Debt for Borrowed Money of the pollution control or industrial revenue bond type;

(vi) Liens on any property (including any natural gas, oil or other mineral property) to secure all or part of the cost of exploration, drilling or development thereof or to secure Debt for Borrowed Money incurred to provide funds for any such purpose;

(vii) Liens existing on the date of this Agreement;

(viii) Liens for the sole purposes of extending, renewing or replacing in whole or in part Debt for Borrowed Money secured by any Lien referred to in the foregoing clauses (i) through (vii), inclusive, or this clause (viii); provided, however, that the principal amount of Debt for Borrowed Money secured thereby shall not exceed the principal amount of Debt for Borrowed Money so secured at the time of such extension, renewal or replacement (which, for purposes of this limitation as it applies to a synthetic lease, shall be deemed to be (x) the lessor’s original cost of the property subject to such lease at the time of extension, renewal or replacement, less (y) the aggregate amount of all prior payments under such lease allocated pursuant to the terms of such lease to reduce the principal amount of the lessor’s investment, and borrowings by the lessor, made to fund the original cost of the property), and that such extension, renewal or replacement shall be limited to all or a part of the property or indebtedness which secured the Lien so extended, renewed or replaced (plus improvements on such property);

(ix) Liens on any property or assets of a Project Financing Subsidiary, or on any Capital Stock in a Project Financing Subsidiary, in either such case, that secure only a Project Financing or a Contingent Guaranty that supports a Project Financing; or

(x) Any Lien, other than a Lien described in any of the foregoing clauses (i) through (ix), inclusive, to the extent that it secures Debt for Borrowed Money, or guaranties thereof, the outstanding principal balance of which at the time of creation of such Lien, when added to the aggregate principal balance of all Debt for Borrowed Money secured by Liens incurred under this clause (x) then outstanding, does not exceed $150,000,000.

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If at any time any Credit Party or any of its Subsidiaries shall create, issue, assume or guaranty any Debt for Borrowed Money secured by any Lien and the first paragraph of this Section 6.01(a) requires that the Loans be secured equally and ratably with such Debt for Borrowed Money, the Borrower shall promptly deliver to the Administrative Agent and each Lender:

(1) a certificate of a duly authorized officer of the Borrower stating that the covenant contained in the first paragraph of this Section 6.01(a) has been complied with; and

(2) an opinion of counsel acceptable to the Required Lenders to the effect that such covenant has been complied with and that all documents executed by any Credit Party or any of its Subsidiaries in the performance of such covenant comply with the requirements of such covenant.

(b) Mergers, Etc. Merge or consolidate with or into, or, except in a transaction permitted under paragraph (c) of this Section, convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any Person, or permit any of its Subsidiaries to do so, except that:

(i) any Subsidiary of the Guarantor (other than the Borrower) may merge or consolidate with or transfer assets to or acquire assets from any other Subsidiary of the Guarantor, provided that in the case of any such merger, consolidation, or transfer of assets to which NIPSCO or Columbia is a party, the continuing or surviving Person shall be a Wholly-Owned Subsidiary of the Guarantor; and

(ii) the Borrower may merge or consolidate with, or transfer assets to, or acquire assets from, any other Wholly-Owned Subsidiary of the Guarantor, provided that in the case of any such merger or consolidation to which the Borrower is not the surviving Person, or transfer of all or substantially all of the assets of the Borrower to any other Wholly-Owned Subsidiary of the Guarantor, immediately after giving effect thereto, (A) no Event of Default shall have occurred and be continuing (determined, for purposes of compliance with Article VII after giving effect to such transaction, on a pro forma basis as if such transaction had occurred on the last day of the Guarantor’s fiscal quarter then most recently ended) and (B) such surviving Person or transferee, as applicable, shall have assumed all of the obligations of the Borrower under and in respect of the Credit Documents by written instrument satisfactory to the Administrative Agent and its counsel in their reasonable discretion, accompanied by such opinions of counsel and other supporting documents as they may reasonably require; and

(iii) any Subsidiary of the Guarantor may merge into the Guarantor or the Borrower or transfer assets to the Borrower or the Guarantor, provided that in the case of any merger or consolidation of the Borrower into the Guarantor or transfer of all or substantially all of the assets of the Borrower to the Guarantor, immediately after giving effect thereto, (A) no Event of Default shall have occurred and be continuing (determined, for purposes of compliance with Article VII after giving effect to such transaction, on a pro forma basis as if such transaction had occurred on the last day of the Guarantor’s fiscal quarter then most recently ended) and (B) the Guarantor shall have assumed all of the obligations of the Borrower under and in respect of the Credit Documents by written instrument satisfactory to the Administrative Agent and its counsel in their reasonable discretion, accompanied by such opinions of counsel and other supporting documents as they may reasonably require; and

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(iv) the Guarantor or any Subsidiary of the Guarantor may merge, or consolidate with or transfer all or substantially all of its assets to any other Person; provided that in each case under this clause (iii), immediately after giving effect thereto, (A) no Event of Default shall have occurred and be continuing (determined, for purposes of compliance with Article VII after giving effect to such transaction, on a pro forma basis as if such transaction had occurred on the last day of the Guarantor’s fiscal quarter then most recently ended); (B) in the case of any such merger, consolidation or transfer of assets to which the Borrower is a party, the Borrower shall be the continuing or surviving corporation; (C) in the case of any such merger, consolidation, or transfer of assets to which NIPSCO or Columbia is a party, NIPSCO or Columbia, as the case may be, shall be the continuing or surviving corporation and shall be a Wholly-Owned Subsidiary of the Guarantor; (D) in the case of any such merger, consolidation or transfer of assets to which the Guarantor is a party, the Guarantor shall be the continuing or surviving corporation; and (E) the Index Debt shall be rated at least BBB- by S&P and at least Baa3 by Moody’s.

(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of, or permit any of their respective Subsidiaries to sell, lease, transfer or otherwise dispose of (other than in connection with a transaction authorized by paragraph (b) of this Section) any substantial part of its assets; provided that the foregoing shall not prohibit any such sale, conveyance, lease, transfer or other disposition that (i) constitutes realization on a Lien permitted to exist under Section 6.01(a); or (ii) (A) (1) is for a price not materially less than the fair market value of such assets, (2) would not materially impair the ability of any Credit Party to perform its obligations under this Agreement and (3) together with all other such sales, conveyances, leases, transfers and other dispositions, would have no Material Adverse Effect, or (B) would not result in the sale, lease, transfer or other disposition, in the aggregate, of more than 10% of the consolidated total assets of the Guarantor and its Subsidiaries, determined in accordance with GAAP, on December 31, 2011.

(d) Compliance with ERISA. (i) Terminate, or permit any ERISA Affiliate to terminate, any Plan so as to result in a Material Adverse Effect or (ii) permit to exist any occurrence of any Reportable Event (as defined in Title IV of ERISA), or any other event or condition, that presents a material (in the reasonable opinion of the Required Lenders) risk of such a termination by the PBGC of any Plan, if such termination could reasonably be expected to have a Material Adverse Effect.

(e) Certain Restrictions. Permit any of its Subsidiaries (other than, in the case of the Guarantor, the Borrower) to enter into or permit to exist any agreement that by its terms prohibits such Subsidiary from making any payments, directly or indirectly, to such Credit Party by way of dividends, advances, repayment of loans or advances, reimbursements of management or other intercompany charges, expenses and accruals or other returns on investment, or any other agreement that restricts the ability of such Subsidiary to make any payment, directly or indirectly, to such Credit Party; provided that the foregoing shall not apply to prohibitions and restrictions (i) imposed by applicable law, (ii) (A) imposed under an agreement in existence on the date of this Agreement, and (B) described on Schedule 6.01(e), (iii) existing with respect to a Subsidiary on the date it becomes a Subsidiary that are not created in contemplation thereof (but shall apply to any extension or renewal of, or any amendment or modification expanding the

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scope of, any such prohibition or restriction), (iv) contained in agreements relating to the sale of a Subsidiary pending such sale, provided that such prohibitions or restrictions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (v) imposed on a Project Financing Subsidiary in connection with a Project Financing, or (vi) that could not reasonably be expected to have a Material Adverse Effect.

ARTICLE VII

FINANCIAL COVENANT

So long as any Lender shall have any Commitment hereunder or any principal of any Loan, Unreimbursed LC Disbursement, interest or fees payable hereunder shall remain unpaid or any Letter of Credit shall remain outstanding, the Guarantor shall maintain a Debt to Capitalization Ratio of not more than 0.70 to 1.00.

ARTICLE VIII

EVENTS OF DEFAULT

SECTION 8.01. Events of Default. If any of the following events (“Events of Default”) shall occur and be continuing:

(a) The Borrower shall fail to pay any principal of any Loan or Unreimbursed LC Disbursement when the same becomes due and payable or shall fail to pay any interest, fees or other amounts hereunder within three Business Days after when the same becomes due and payable; or

(b) Any representation or warranty made by any Credit Party in any Credit Document or by any Credit Party (or any of its officers) in connection with this Agreement shall prove to have been incorrect in any material respect when made; or

(c) Any Credit Party shall fail to perform or observe any term, covenant or agreement contained in Section 5.01(e), 5.01(f), 5.01(h), 5.01(i), 6.01 or Article VII; or

(d) Any Credit Party shall fail to perform or observe any term, covenant or agreement contained in any Credit Document on its part to be performed or observed (other than one identified in paragraph (a), (b) or (c) above) if the failure to perform or observe such other term, covenant or agreement shall remain unremedied for thirty days after written notice thereof shall have been given to the Borrower by the Administrative Agent or any Lender; or

(e) The Guarantor, the Borrower or any of their respective Subsidiaries shall fail to pay any principal of or premium or interest on any Indebtedness (excluding Non-Recourse Debt) which is outstanding in a principal amount of at least $50,000,000 in the aggregate (but excluding the Loans) of the Guarantor, the Borrower or such Subsidiary, as the case may be, when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the scheduled maturity of such Indebtedness; or any such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; or

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(f) Any Credit Party shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Credit Party seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against any Credit Party (but not instituted by any Credit Party), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, any Credit Party or for any substantial part of its property) shall occur; or any Credit Party shall take any corporate action to authorize any of the actions set forth above in this paragraph (f); or

(g) One or more Subsidiaries of the Guarantor (other than the Borrower) in which the aggregate sum of (i) the amounts invested by the Guarantor and its other Subsidiaries in the aggregate, by way of purchases of Capital Stock, Capital Leases, loans or otherwise, and (ii) the amount of recourse, whether contractual or as a matter of law (but excluding Non-Recourse Debt), available to creditors of such Subsidiary or Subsidiaries against the Guarantor or any of its other Subsidiaries, is $100,000,000 or more (collectively, “Substantial Subsidiaries”) shall generally not pay their respective debts as such debts become due, or shall admit in writing their respective inability to pay their debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against Substantial Subsidiaries seeking to adjudicate them bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of them or their respective debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for them or for any substantial part of their respective property and, in the case of any such proceeding instituted against Substantial Subsidiaries (but not instituted by the Guarantor or any Subsidiary of the Guarantor), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, the Substantial Subsidiaries or for any substantial part of their respective property) shall occur; or Substantial Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this paragraph (g); or

(h) Any judgment or order for the payment of money in excess of $50,000,000 shall be rendered against the Borrower, the Guarantor or any of its other Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

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(i) Any ERISA Event shall have occurred with respect to a Plan and, 30 days after notice thereof shall have been given to the Guarantor or the Borrower by the Administrative Agent, (i) such ERISA Event shall still exist and (ii) the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to which an ERISA Event shall have occurred and then exist (or, in the case of a Plan with respect to which an ERISA Event described in clauses (c) through (f) of the definition of ERISA Event shall have occurred and then exist, the liability related thereto) is equal to or greater than $10,000,000 (when aggregated with paragraphs (j), (k) and (l) of this Section), and a Material Adverse Effect could reasonably be expected to occur as a result thereof; or

(j) The Guarantor or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount which, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Guarantor and its ERISA Affiliates as Withdrawal Liability (determined as of the date of such notification), exceeds $10,000,000 or requires payments exceeding $10,000,000 per annum (in either case, when aggregated with paragraphs (i), (k) and (l) of this Section), and a Material Adverse Effect could reasonably be expected to occur as a result thereof; or

(k) The Guarantor or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if as a result of such reorganization or termination the aggregate annual contributions of the Guarantor and its ERISA Affiliates to all Multiemployer Plans which are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the respective plan year of each such Multiemployer Plan immediately preceding the plan year in which the reorganization or termination occurs by an amount exceeding $10,000,000 (when aggregated with paragraphs (i), (j) and (l) of this Section), and a Material Adverse Effect could reasonably be expected to occur as a result thereof; or

(l) The Guarantor or any ERISA Affiliate shall have committed a failure described in Section 303(k)(1) of ERISA and the amount determined under Section 303(k)(3) of ERISA is equal to or greater than $10,000,000 (when aggregated with paragraphs (i), (j) and (k) of this Section), and a Material Adverse Effect could reasonably be expected to occur as a result thereof; or

(m) Any provision of the Credit Documents shall be held by a court of competent jurisdiction to be invalid or unenforceable against any Credit Party purported to be bound thereby, or any Credit Party shall so assert in writing; or

(n) Any Change of Control shall occur;

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then, and in any such event, the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Commitment of each Lender, the obligation of the Swingline Lender to make or maintain Swingline Loans and the obligation of each LC Bank to issue or maintain Letters of Credit hereunder to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request or with the consent of the Required Lenders, by notice to the Borrower, declare all amounts payable under this Agreement to be forthwith due and payable, whereupon all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided that in the event of an actual or deemed entry of an order for relief with respect to any Credit Party under the Federal Bankruptcy Code, (1) the Commitment of each Lender, the obligation of the Swingline Lender to make or maintain Swingline Loans and the obligation of each LC Bank to issue or maintain Letters of Credit hereunder shall automatically be terminated and (2) all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower.

Notwithstanding anything to the contrary contained herein, no notice given or declaration made by the Administrative Agent pursuant to this Section 8.01 shall affect (i) the obligation of any LC Bank to make any payment under any outstanding Letter of Credit issued by such LC Bank in accordance with the terms of such Letter of Credit, (ii) the obligations of each Lender in respect of each such Letter of Credit or (iii) the obligation of each Lender to purchase its pro rata share of any Swingline Loans; provided, however, that upon the occurrence and during the continuance of any Event of Default, the Administrative Agent shall at the request, or may with the consent, of the Required Lenders, upon notice to the Borrower, require the Borrower to deposit with the Administrative Agent an amount in the cash account (the “Cash Account”) described below equal to the then current LC Outstandings. Such Cash Account shall at all times be free and clear of all rights or claims of third parties. The Cash Account shall be maintained with the Administrative Agent in the name of, and under the sole dominion and control of, the Administrative Agent, and amounts deposited in the Cash Account shall bear interest at a rate equal to the rate generally offered by Barclays for deposits equal to the amount deposited by the Borrower in the Cash Account pursuant to this Section 8.01, for a term to be agreed to between the Borrower and the Administrative Agent. If any drawings under any Letter of Credit then outstanding or thereafter made are not reimbursed in full immediately upon demand or, in the case of subsequent drawings, upon being made, then, in any such event, the Administrative Agent may apply the amounts then on deposit in the Cash Account, in such priority as the Administrative Agent shall elect, toward the payment in full of any or all of the Borrower’s obligations hereunder as and when such obligations shall become due and payable. Upon payment in full, after the termination of the Letters of Credit, of all such obligations, the Administrative Agent will repay to the Borrower any cash then on deposit in the Cash Account.

ARTICLE IX

THE ADMINISTRATIVE AGENT

SECTION 9.01. The Administrative Agent.

(a) Each of the Lenders and each LC Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.

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(b) The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the any Credit Party or any of such Credit Party’s Subsidiaries or other Affiliates thereof as if it were not the Administrative Agent hereunder.

(c) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (i) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (ii) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing by the Required Lenders, and (iii) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower, the Guarantor or any of its other Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or, if applicable, all of the Lenders) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (1) any statement, warranty or representation made in or in connection with this Agreement, (2) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (3) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (4) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (5) the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent and the conformity thereof to such express requirement.

(d) The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for a Credit Party) independent accountants and other experts selected by it and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

(e) The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

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(f) Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the Credit Parties. Upon any such resignation, the Required Lenders shall have the right, with the consent of the Borrower (which consent shall not unreasonably be withheld), to appoint a successor, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank, in any event having total assets in excess of $500,000,000 and who shall serve until such time, if any, as an Agent shall have been appointed as provided above. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 11.03 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

(g) Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.

(h) No Lender identified on the signature pages of this Agreement as a “Lead Arranger”, “Co-Documentation Agent” or “Syndication Agent”, or that is given any other title hereunder other than “LC Bank”, “Swingline Lender” or “Administrative Agent”, shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the generality of the foregoing, no Lender so identified as a “Lead Arranger”, “Co-Documentation Agent” or “Syndication Agent” or that is given any other title hereunder, shall have, or be deemed to have, any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on the Lenders so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

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(i) Notwithstanding anything to the contrary herein or in any other Credit Document, the authority to enforce rights and remedies hereunder and in the other Credit Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.01 for the benefit of all the Lenders and LC Banks; provided, however, that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Credit Documents, (ii) the LC Banks or the Swingline Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as LC Bank or Swingline Lender, as the case may be) hereunder and under the other Credit Documents, (iii) any Lender from exercising setoff rights in accordance with Section 11.08 (subject to the terms of Section 2.18(c)) or (iv) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a Bankruptcy Event relative to any Credit Party; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Credit Documents, then (A) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.01 and (B) in addition to the matters set forth in clauses (ii), (iii) and (iv) of the preceding proviso and subject to Section 2.18(c), any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

ARTICLE X

GUARANTY

SECTION 10.01. The Guaranty.

(a) The Guarantor, as primary obligor and not merely as a surety, hereby irrevocably, absolutely and unconditionally guarantees to the Administrative Agent and the Lenders and each of their respective successors, endorsees, transferees and assigns (each a “Beneficiary” and collectively, the “Beneficiaries”) the prompt and complete payment by the Borrower, as and when due and payable, of the Obligations, in accordance with the terms of the Credit Documents. The provisions of this Article X are sometimes referred to hereinafter as the “Guaranty”.

(b) The Guarantor hereby guarantees that the Obligations will be paid strictly in accordance with the terms of the Credit Documents, regardless of any law now or hereafter in effect in any jurisdiction affecting any such terms or the rights of the Beneficiaries with respect thereto. The obligations and liabilities of the Guarantor under this Guaranty shall be absolute and unconditional irrespective of: (i) any lack of validity or enforceability of any of the Obligations or any Credit Document, or any delay, failure or omission to enforce or agreement not to enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise of any right with respect to the foregoing (including, in each case, without limitation, as a result of the insolvency, bankruptcy or reorganization of any Beneficiary, the Borrower or any other Person); (ii) any change in the time, manner or place of payment of, or in any other term in respect of, all or any of the Obligations, or any other amendment or waiver of or consent to any departure from the Credit Documents or any agreement or instrument relating thereto; (iii) any exchange or release of, or non-perfection of any Lien on or in any collateral, or any release, amendment or waiver of, or consent to any departure from, any other guaranty of, or agreement granting security for, all or any of the Obligations; (iv) any claim, set-off, counterclaim, defense or other rights that the Guarantor may have at any time and from time to time against any Beneficiary or any other Person, whether in connection with this Transaction or any unrelated transaction; or (v) any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any other guarantor or surety in respect of the Obligations or the Guarantor in respect hereof.

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(c) The Guaranty provided for herein (i) is a guaranty of payment and not of collection; (ii) is a continuing guaranty and shall remain in full force and effect until the Commitments and Letters of Credit have been terminated and the Obligations have been paid in full in cash; and (iii) shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be returned by any Beneficiary upon or as a result of the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or otherwise, all as though such payment had not been made.

(d) The obligations and liabilities of the Guarantor hereunder shall not be conditioned or contingent upon the pursuit by any Beneficiary or any other Person at any time of any right or remedy against the Borrower or any other Person that may be or become liable in respect of all or any part of the Obligations or against any collateral security or guaranty therefor or right of setoff with respect thereto.

(e) The Guarantor hereby consents that, without the necessity of any reservation of rights against the Guarantor and without notice to or further assent by the Guarantor, any demand for payment of any of the Obligations made by any Beneficiary may be rescinded by such Beneficiary and any of the Obligations continued after such rescission.

(f) The Guarantor’s obligations under this Guaranty shall be unconditional, irrespective of any lack of capacity of the Borrower or any lack of validity or enforceability of any other provision of this Agreement or any other Credit Document, and this Guaranty shall not be affected in any way by any variation, extension, waiver, compromise or release of any or all of the Obligations or of any security or guaranty from time to time therefor.

(g) The obligations of the Guarantor under this Guaranty shall not be reduced, limited, impaired, discharged, deferred, suspended or terminated by any proceeding or action, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, marshalling of assets, assignment for the benefit of creditors, composition with creditors, readjustment, liquidation or arrangement of the Borrower or any similar proceedings or actions, or by any defense the Borrower may have by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding or action. Without limiting the generality of the foregoing, the Guarantor’s liability shall extend to all amounts and obligations that constitute the Obligations and would be owed by the Borrower, but for the fact that they are unenforceable or not allowable due to the existence of any such proceeding or action.

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SECTION 10.02. Waivers.

(a) The Guarantor hereby unconditionally waives: (i) promptness and diligence; (ii) notice of or proof of reliance by the Administrative Agent or the Lenders upon this Guaranty or acceptance of this Guaranty; (iii) notice of the incurrence of any Obligation by the Borrower or the renewal, extension or accrual of any Obligation or of any circumstances affecting the Borrower’s financial condition or ability to perform the Obligations; (iv) notice of any actions taken by the Beneficiaries or the Borrower or any other Person under any Credit Document or any other agreement or instrument relating thereto; (v) all other notices, demands and protests, and all other formalities of every kind in connection with the enforcement of the Obligations, of the obligations of the Guarantor hereunder or under any other Credit Document, the omission of or delay in which, but for the provisions of this Section 10 might constitute grounds for relieving the Guarantor of its obligations hereunder; (vi) any requirement that the Beneficiaries protect, secure, perfect or insure any Lien or any property subject thereto, or exhaust any right or take any action against the Borrower or any other Person or any collateral; and (vii) each other circumstance, other than payment of the Obligations in full, that might otherwise result in a discharge or exoneration of, or constitute a defense to, the Guarantor’s obligations hereunder.

(b) No failure on the part of any Beneficiary to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder or under any Credit Document or any other agreement or instrument relating thereto shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any Credit Document or any other agreement or instrument relating thereto preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. This Guaranty is in addition to and not in limitation of any other rights, remedies, powers and privileges the Beneficiaries may have by virtue of any other instrument or agreement heretofore, contemporaneously herewith or hereafter executed by the Guarantor or any other Person or by applicable law or otherwise. All rights, remedies, powers and privileges of the Beneficiaries shall be cumulative and may be exercised singly or concurrently. The rights, remedies, powers and privileges of the Beneficiaries under this Guaranty against the Guarantor are not conditional or contingent on any attempt by the Beneficiaries to exercise any of their rights, remedies, powers or privileges against any other guarantor or surety or under the Credit Documents or any other agreement or instrument relating thereto against the Borrower or against any other Person.

(c) The Guarantor hereby acknowledges and agrees that, until the Commitments have been terminated and all of the Obligations have been paid in full in cash, under no circumstances shall it be entitled to be subrogated to any rights of any Beneficiary in respect of the Obligations performed by it hereunder or otherwise, and the Guarantor hereby expressly and irrevocably waives, until the Commitments have been terminated and all of the Obligations have been paid in full in cash, (i) each and every such right of subrogation and any claims, reimbursements, right or right of action relating thereto (howsoever arising), and (ii) each and every right to contribution, indemnification, set-off or reimbursement, whether from the Borrower or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, and whether arising by contract or operation of law or otherwise by reason of the Guarantor’s execution, delivery or performance of this Guaranty.

(d) The Guarantor represents and warrants that it has established adequate means of keeping itself informed of the Borrower’s financial condition and of other circumstances affecting the Borrower’s ability to perform the Obligations, and agrees that neither the Administrative Agent nor any Lender shall have any obligation to provide to the Guarantor any information it may have, or hereafter receive, in respect of the Borrower.

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ARTICLE XI

MISCELLANEOUS

SECTION 11.01. Notices. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

(a) if to any Credit Party, to it at:

801 East 86^th Avenue

Merrillville, Indiana 46410

Attention: Vice President, Treasurer and Chief Risk Officer

Telecopier: (219) 647-6188;

with a copy to such Credit Party at:

801 East 86^th Avenue

Merrillville, Indiana 46410

Attention: Assistant Treasurer

Telecopier: (219) 647-6116;

(b) if to the Administrative Agent, to Barclays Bank PLC at:

1301 Sixth Avenue

New York, New York 10019

Attn: Andrea Lubinsky

Telecopier: (917) 522-0569

Telephone: (212) 320-7741

Email: andrea.lubinsky@barclays.com

Email: xrausloanops5@barclays.com

with a copy to such party at:

745 Seventh Avenue

New York, NY 10019

Attn: Alicia Borys

Telecopier: (212) 526-5115

Email: alicia.borys@barclays.com

Email: ltmny@barclays.com

(c) if to Barclays as an Initial LC Bank, at:

200 Park Avenue

New York, NY 10166

Attn: Letters of Credit / Dawn Townsend

Telecopier: (212) 412 5011

Email: xraletterofcredit@barclays.com

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(d) if to any Lender, any LC Bank (other than Barclays) or the Swingline Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

SECTION 11.02. Waivers; Amendments.

(a) No failure or delay by the Administrative Agent, any LC Bank or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the LC Banks and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Credit Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, no Extension of Credit shall be construed as a waiver of any Default, regardless of whether the Administrative Agent, any LC Bank or any Lender may have had notice or knowledge of such Default at the time.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower, the Guarantor and the Required Lenders or by the Borrower, the Guarantor and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or any Unreimbursed LC Disbursement or reduce the rate of interest thereon, or reduce any fees or other amounts payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan, any Unreimbursed LC Disbursement or any interest thereon, or any fees or other amounts payable hereunder, or reduce the amount of, waive

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or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) release the Guarantor from its obligations under the Guaranty without the written consent of each Lender, (vi) waive any of the conditions precedent to the effectiveness of this Agreement set forth in Section 3.01 without the written consent of each Lender, (vii) issue any Letter of Credit with an expiry date, or extend the expiry date of any Letter of Credit to a date, that is later than the Termination Date without the written consent of each Lender, or (viii) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; provided, further, that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or any LC Bank hereunder without the prior written consent of the Administrative Agent or such LC Bank, as the case may be.

SECTION 11.03. Expenses; Indemnity; Damage Waiver.

(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the initial syndication of the credit facilities provided for herein, the preparation and administration of this Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the LC Banks, including the reasonable fees, charges and disbursements of counsel for each LC Bank, in connection with the execution, delivery, administration, modification and amendment of any Letters of Credit to be issued by it hereunder, and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, any LC Bank or any Lender, including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent, any LC Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made and Letters of Credit issued hereunder, including in connection with any workout, restructuring or negotiations in respect thereof.

(b) The Borrower shall indemnify the Administrative Agent, the Syndication Agent, each Co-Documentation Agent, each LC Bank, each Lender and the Swingline Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related reasonable expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transaction contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property now, in the past or hereafter owned or operated by the Borrower, the Guarantor or any of its other Subsidiaries, or any Environmental Liability related in any way to the Borrower, the

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Guarantor or any of its other Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any of its Subsidiaries, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent or any LC Bank under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent or such LC Bank such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or such LC Bank in its capacity as such.

(d) To the extent permitted by applicable law, (i) the Borrower shall not assert, and does hereby waive, any claim against any Indemnitee for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet), and (ii) without limiting the rights of indemnification of any Indemnitee set forth in this Agreement with respect to liabilities asserted by third parties, each party hereto shall not assert, and hereby waives, any claim against each other party, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions or any Loan or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable not later than 20 days after written demand therefor.

SECTION 11.04. Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby; provided that, (i) except to the extent permitted pursuant to Section 6.01(b)(ii) and (iii), no Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender and each LC Bank (and any attempted assignment or transfer by a Credit Party without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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(b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A) the Borrower (provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof); provided, further, that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

(B) the Administrative Agent; and

(C) each LC Bank.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans;

(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, such fee to be paid by either the assigning Lender or the assignee Lender or shared between such Lenders;

(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its affiliates and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws;

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(E) without the prior written consent of the Administrative Agent, no assignment shall be made to a prospective assignee that bears a relationship to the Borrower described in Section 108(e)(4) of the Code; and

(F) no assignment shall be made to any Affiliate of any Credit Party.

For the purposes of this Section 11.04(b), the term “Approved Fund” has the following meaning:

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

Subject to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 11.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section.

(c) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in The City of New York a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and other Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive (absent manifest error), and the Borrower, the Administrative Agent, the LC Banks and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.

(d) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

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(e) Any Lender may, without the consent of or notice to the Borrower, any LC Bank or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Guarantor and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 11.02(b) that affects such Participant. Subject to paragraph (f) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.

(f) A Participant shall not be entitled to receive any greater payment under Section 2.l5 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as though it were a Lender.

(g) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including, without limitation, to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.

SECTION 11.05. Survival. All covenants, agreements, representations and warranties made by the Borrower and the Guarantor herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit. The provisions of Sections 2.15, 2.16, 2.17, 10.01(c)(iii) and 11.03 and Article IX shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

SECTION 11.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the commitment letter relating to the credit facility provided hereby

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(to the extent provided therein) and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 3.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 11.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 11.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each LC Bank or any Affiliate of either is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of any Credit Party against any of and all the Obligations now or hereafter existing under this Agreement held by such Lender or such LC Bank, irrespective of whether or not such Lender or such LC Bank shall have made any demand under this Agreement and although such Obligations may be unmatured. The rights of each Lender and each LC Bank under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement shall be construed in accordance with and governed by the laws of the State of New York.

(b) Each Credit Party hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent, any LC Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against any Credit Party or its properties in the courts of any jurisdiction.

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(c) Each Credit Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 11.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 11.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 11.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 11.12. Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) actual or prospective counterparty (or its advisors) to any swap or derivative transaction or any credit insurance provider, in each case, relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any LC Bank or any Lender on a nonconfidential basis from a source other than a Credit Party or any Subsidiary of a Credit Party. For the purposes of

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this Section, “Information” means all information received from any Credit Party or any Subsidiary of a Credit Party relating to a Credit Party or any Subsidiary of a Credit Party or its respective businesses, other than any such information that is available to the Administrative Agent, any LC Bank or any Lender on a nonconfidential basis prior to disclosure by any Credit Party or any Subsidiary of a Credit Party; provided that, in the case of information received from any Credit Party or any Subsidiary of a Credit Party after the Effective Date, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 11.13. USA PATRIOT Act. Each Lender hereby notifies the Credit Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Credit Parties, which information includes the name and address of the Credit Parties and other information that will allow such Lender to identify the Credit Parties in accordance with the Act.

SECTION 11.14. Acknowledgments. Each of the Guarantor and the Borrower hereby acknowledges that:

(a) it has been advised by and consulted with its own legal, accounting, regulatory and tax advisors (to the extent it deemed appropriate) in the negotiation, execution and delivery of this Agreement and the other Credit Documents;

(b) neither any Arranger, any Agent nor any Lender has any fiduciary relationship with or duty to the Guarantor or the Borrower arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between any Arranger, the Administrative Agent and the Lenders, on one hand, and the Guarantor and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor, and, to the fullest extent permitted by law, each of the Guarantor and the Borrower hereby waives and releases any claims that it may have against the Administrative Agent, the Arrangers and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby;

(c) it is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Credit Documents; and

(d) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Arrangers, the Administrative Agent and the Lenders or among the Guarantor, the Borrower and the Lenders.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

NISOURCE FINANCE CORP., as Borrower
By:
	Name:
	Title:
Federal Tax Identification Number: 35-2105468

NISOURCE INC., as Guarantor
By:
	Name:
	Title:
Federal Tax Identification Number: 35-2108964

Signature Page to

Amended and Restated Revolving Credit Agreement

BARCLAYS BANK PLC, as a Lender, as Swingline Lender, as an LC Bank and as Administrative Agent
By:
	Name:
	Title:

Signature Page to

Amended and Restated Revolving Credit Agreement

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender, as an LC Bank and as Syndication Agent
By:
	Name:
	Title:
By:
	Name:
	Title:

Signature Page to

Amended and Restated Revolving Credit Agreement

[OTHER LENDERS], as a Lender [and as a Co-Documentation Agent]
By:
	Name:
	Title:

Signature Page to

Amended and Restated Revolving Credit Agreement

Accepted to and Agreed:

The undersigned is executing this signature page solely as a Departing Lender in its acceptance of the termination of its commitments and obligations under the Existing Credit Agreement and not as a Lender party hereto. The undersigned hereby acknowledges that the Existing Credit Agreement shall be amended and restated in its entirety by this Agreement to which this signature page is attached and the undersigned shall not constitute a party thereto other than for purposes of effectuating the amendment and restatement of the Existing Credit Agreement.

[DEPARTING LENDER]

By:

Name:

Title:

Signature Page to

Amended and Restated Revolving Credit Agreement

Annex A

PRICING GRID

The “Applicable Rate” for any day with respect to any Eurodollar Loan, ABR Loan, Swingline Loan, Facility Fee or LC Risk Participation Fee, as the case may be, is the percentage set forth below in the applicable row under the column corresponding to the Status that exists on such day:

Status	Level I		Level II		Level III		Level IV		Level V		Level VI
Eurodollar Revolving Loans (basis points)		100		107.5		127.5		147.5		165		205
ABR Loans and Swingline Loans (basis points)		0		7.5		27.5		47.5		65		105
Facility Fee (basis points)		12.5		17.5		22.5		27.5		35		45
LC Risk Participation Fee (basis points)		100		107.5		127.5		147.5		165		205

For purposes of this Pricing Grid, the following terms have the following meanings (as modified by the provisos below):

“Level I Status” exists at any date if, at such date, the Index Debt is rated either A- or higher by S&P or A3 or higher by Moody’s.

“Level II Status” exists at any date if, at such date, the Index Debt is rated either BBB+ by S&P or Baa1 by Moody’s.

“Level III Status” exists at any date if, at such date, the Index Debt is rated either BBB by S&P or Baa2 by Moody’s.

“Level IV Status” exists at any date if, at such date, the Index Debt is rated either BBB- by S&P or Baa3 by Moody’s.

“Level V Status” exists at any date if, at such date, the Index Debt is rated either BB+ by S&P or Ba1 by Moody’s.

“Level VI Status” exists at any date if, at such date, no other Status exists.

“Status” refers to the determination of which of Level I Status, Level II Status, Level III Status, Level IV Status, Level V Status or Level VI Status exists at any date.

The credit ratings to be utilized for purposes of this Pricing Grid are those assigned to the Index Debt, and any rating assigned to any other debt security of the Borrower shall be disregarded. The rating in effect at any date is that in effect at the close of business on such date.

Annex A-1

Provided, that the applicable Status shall change as and when the applicable Index Debt ratings change.

Provided further, that if the Index Debt is split-rated, the applicable Status shall be determined on the basis of the higher of the two ratings then applicable; provided further, that, if the Index Debt is split-rated by two or more levels, the applicable Status shall instead be determined on the basis of the rating that is one level above the lower of the two ratings then applicable.

Provided further, that if both Moody’s and S&P, or their successors as applicable, shall have ceased to issue or maintain such ratings, then the applicable Status shall be Level VI.

Annex A-2

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Amended and Restated Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.	Assignor:
2.	Assignee:
		[and is an Affiliate/Approved Fund of [identify Lender]1]
3.	Borrower(s):	NiSource Finance Corp., a Delaware corporation
4.	Administrative Agent:	Barclays Bank PLC, as the administrative agent under the Credit Agreement
5.	Credit Agreement:	The Amended and Restated Credit Agreement dated as of May 15, 2012 among NiSource Finance Corp., as borrower, NiSource Inc., a Delaware corporation, as guarantor, the Lenders parties thereto, Barclays Bank PLC, as Administrative Agent, and the other agents parties thereto

¹  Select as applicable.

6. Assigned Interest:

Aggregate Amount of Commitment/Loans for all Lenders	Amount of Commitment/ Loans Assigned	Percentage Assigned of Commitment/Loans2
$	$		%
$	$		%
$	$		%

Effective Date:                      , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR
[NAME OF ASSIGNOR]
By:
	Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
	Title:

Consented to and Accepted:

BARCLAYS BANK PLC, as Administrative Agent and LC Bank
By:
	Title:
[Consented to:]
[                         ], as LC Bank
By:
	Title:
[NISOURCE FINANCE CORP., as Borrower] 3
By:
	Title:

²  Set forth, so at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

³  To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.

ANNEX I

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01(h) thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, (v) if it is a Non-U.S. Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (vi) it does not bear a relationship to the Borrower described in Section 108(e)(4) of the Code; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

EXHIBIT B

FORM OF OPINION OF SCHIFF HARDIN LLP

EXHIBIT C

FORM OF REVOLVING LOAN BORROWING REQUEST

REVOLVING LOAN BORROWING REQUEST

Date:             ,         

To: Barclays Bank PLC,

as Administrative Agent

1301 Sixth Avenue

New York, NY 10019

Attention: Andrea Lubinsky

Facsimile: (917) 522-0569

Telephone: (212) 320-7741

Email: xraUSLoanOps5@barclays.com

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of May 15, 2012 (as may be amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time in accordance with its terms, the “Agreement”; the terms defined therein being used herein as therein defined), between NiSource Finance Corp., a Delaware corporation (the “Borrower”), NiSource Inc., as guarantor, the Lenders party thereto, Barclays Bank PLC, as the Administrative Agent, and the other parties thereto.

The Borrower hereby requests a Revolving Borrowing, as follows:

1. In the aggregate amount of $            .

2. On             , 201_ (a Business Day).

3. Comprised of a [ABR] [Eurodollar] Borrowing.

[4. With an Interest Period of      months.]⁴

[4][5]. The Borrower’s account to which funds are to be disbursed is:

Account Number:                 

Location:                                

This Borrowing Request and the Revolving Borrowing requested herein comply with the Agreement, including Sections 2.01(a), 2.02 and 3.02 of the Agreement.

NISOURCE FINANCE CORP.

By:

Name:

Title:

⁴  Insert if a Eurodollar Borrowing.

EXHIBIT D

FORM OF SWINGLINE REQUEST

SWINGLINE REQUEST

Date:             ,         

To: Barclays Bank PLC,

as Swingline Lender

Barclays Bank PLC,

as Administrative Agent

1301 Sixth Avenue

New York, NY 10019

Attention: Andrea Lubinsky

Facsimile: (917) 522-0569

Telephone: (212) 320-7741

Email: xraUSLoanOps5@barclays.com

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of May 15, 2012 (as may be amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time in accordance with its terms, the “Agreement”; the terms defined therein being used herein as therein defined), between NiSource Finance Corp., a Delaware corporation (the “Borrower”), NiSource Inc., as guarantor, the Lenders party thereto, Barclays Bank PLC, as the Administrative Agent, and the other parties thereto.

The Borrower hereby requests a Swingline Loan from the Swingline Lender listed above, as follows:

1. In the amount of $                .

2. On                     , 201   (a Business Day).

This Swingline Request and the Swingline Loan requested herein comply with the Agreement, including Sections 2.03 and 3.02 of the Agreement.

NISOURCE FINANCE CORP.

By:

Name:

Title:

EXHIBIT E

FORM OF LC CREDIT EXTENSION REQUEST

LC CREDIT EXTENSION REQUEST

Date:             ,         

To: [                    ],

as LC Bank

[                    ]

cc: Barclays Bank PLC,

as Administrative Agent

1301 Sixth Avenue

New York, NY 10019

Attention: Andrea Lubinsky

Facsimile: (917) 522-0569

Telephone: (212) 320-7741

Email: xraUSLoanOps5@barclays.com

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of May 15, 2012(as may be amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time in accordance with its terms, the “Agreement”; the terms defined therein being used herein as therein defined), between NiSource Finance Corp., a Delaware corporation (the “Borrower”), NiSource Inc., as guarantor, the Lenders party thereto, Barclays Bank PLC, as the Administrative Agent, and the other parties thereto.

The Borrower hereby requests a Letter of Credit credit extension by the LC Bank listed above, as follows:

1. [An issuance of a new Letter of Credit in the amount of $[            ]] [an amendment to existing Letter of Credit No. [            ] issued by such LC Bank].

2. On                     , 201   (a Business Day).

This request for Letter of Credit credit extension complies with the Agreement, including Sections 2.04 and 3.02 of the Agreement.

NISOURCE FINANCE CORP.

By:

Name:

Title:

EXHIBIT F

FORM OF REVOLVING NOTE

REVOLVING NOTE

FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to                              or registered assigns (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the aggregate unpaid principal amount of each Revolving Loan from time to time made by the Lender to the Borrower under that certain Credit Agreement dated as of May 15, 2012 (as may be amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time in accordance with its terms, the “Agreement”; the terms defined therein being used herein as therein defined), between the Borrower, NiSource Inc., as guarantor, the Lenders party thereto, Barclays Bank PLC, as the Administrative Agent, and the other parties thereto. The Borrower promises to pay interest on the aggregate unpaid principal amount of each Revolving Loan from time to time made by the Lender to the Borrower under the Agreement from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent’s office pursuant to the terms of the Agreement. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

This Revolving Note is one of the promissory notes referred to in Section 2.10(e) of the Agreement, is one of the Credit Documents, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Revolving Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. Revolving Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Revolving Note and endorse thereon the date, amount and maturity of its Revolving Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Revolving Note.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

NISOURCE FINANCE CORP.

By:

Name:

Title:

LOANS AND PAYMENTS WITH RESPECT THERETO

Date Type of
Loan Made Amount of
Loan Made End of
Interest
Period Amount of
Principal or
Interest Paid
This Date Outstanding
Principal
Balance This
Date Notation
Made By

EXHIBIT G

FORM OF INTEREST ELECTION REQUEST

INTEREST ELECTION REQUEST

Date:             ,         

To: Barclays Bank PLC,

as Administrative Agent

1301 Sixth Avenue

New York, NY 10019

Attention: Andrea Lubinsky

Facsimile: (917) 522-0569

Telephone: (212) 320-7741

Email: xraUSLoanOps5@barclays.com

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of May 15, 2012 (as may be amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time in accordance with its terms, the “Agreement”; the terms defined therein being used herein as therein defined), between NiSource Finance Corp., a Delaware corporation (the “Borrower”), NiSource Inc., as guarantor, the Lenders party thereto, Barclays Bank PLC, as the Administrative Agent, and the other parties thereto.

This Interest Election Request is delivered to you pursuant to Section 2.06 of the Agreement and relates to the following:

1. ¨    A conversion of a Borrowing    ¨    A    continuation of a Borrowing (select one).

2. In the aggregate principal amount of $            .

3. which Borrowing is being maintained as a [ABR Revolving Borrowing] [Eurodollar Revolving Borrowing with an Interest Period ending on                 , 201    ].

4. (select relevant election)

¨ If such Borrowing is a Eurodollar Revolving Borrowing, such Borrowing shall be continued as a Eurodollar Revolving Borrowing having an Interest Period of [  ] months.

¨ If such Borrowing is a Eurodollar Revolving Borrowing, such Borrowing shall be converted to an ABR Revolving Borrowing.

¨ If such Borrowing is an ABR Revolving Borrowing, such Borrowing shall be converted to a Eurodollar Revolving Borrowing having an Interest Period of [        ] months.

5. Such election to be effective on             , 201     (a Business Day).

This Interest Election Request and the election made herein comply with the Agreement, including Section 2.06 of the Agreement.

NISOURCE FINANCE CORP.

By:

Name:

Title:

EXHIBIT H

FORM OF PREPAYMENT NOTICE

PREPAYMENT NOTICE

Date:             ,         

To: Barclays Bank PLC,

as Administrative Agent

1301 Sixth Avenue

New York, NY 10019

Attention: Andrea Lubinsky

Facsimile: (917) 522-0569

Telephone: (212) 320-7741

Email: xraUSLoanOps5@barclays.com

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of May 15, 2012 (as may be amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time in accordance with its terms, the “Agreement”; the terms defined therein being used herein as therein defined), between NiSource Finance Corp., a Delaware corporation (the “Borrower”), NiSource Inc., as guarantor, the Lenders party thereto, Barclays Bank PLC, as the Administrative Agent, and the other parties thereto.

This Prepayment Notice is delivered to you pursuant to Section 2.11 of the Agreement. The Borrower hereby gives notice of a prepayment of Loans as follows:

1. ¨    Revolving Loans    ¨    Swingline Loans

2.(select Type(s) of Loans)

¨ ABR Revolving Loans in the aggregate principal amount of $            .

¨ Eurodollar Revolving Loans with an Interest Period ending             , 201   in the aggregate principal amount of $            .

3. On                     , 201   (a Business Day).

This Prepayment Notice and prepayment contemplated hereby comply with the Agreement, including Section 2.11 of the Agreement.

NISOURCE FINANCE CORP.

By:

Name:

Title:

Schedule 2.01

(Amended and Restated Credit Agreement)

Names, Addresses, Allocation of Aggregate Commitment, and Applicable Percentages of Banks

Bank Name	Domestic Lending Office	Eurodollar Lending Office	Commitment		Applicable Percentage
Barclays Bank PLC	Barclays Bank PLC 745 Seventh Avenue New York, NY 10019	Barclays Bank PLC 745 Seventh Avenue New York, NY 10019	$	137,500,000		9.1666666	%
Credit Suisse AG, Cayman Islands Branch	On file with the Administrative Agent	On file with the Administrative Agent	$	137,500,000		9.1666666	%
The Bank of Tokyo-Mitsubishi UFJ, Ltd.	On file with the Administrative Agent	On file with the Administrative Agent	$	97,500,000		6.5000000	%
Citibank, N.A.	On file with the Administrative Agent	On file with the Administrative Agent	$	97,500,000		6.5000000	%
JPMorgan Chase Bank, N.A.	On file with the Administrative Agent	On file with the Administrative Agent	$	97,500,000		6.5000000	%
The Bank of Nova Scotia	On file with the Administrative Agent	On file with the Administrative Agent	$	77,500,000		5.1666667	%
BNP Paribas	On file with the Administrative Agent	On file with the Administrative Agent	$	77,500,000		5.1666667	%
KeyBank National Association	On file with the Administrative Agent	On file with the Administrative Agent	$	77,500,000		5.1666667	%
Mizuho Corporate Bank (USA)	On file with the Administrative Agent	On file with the Administrative Agent	$	77,500,000		5.1666667	%
The Northern Trust Company	On file with the Administrative Agent	On file with the Administrative Agent	$	77,500,000		5.1666667	%
PNC Bank, National Association	On file with the Administrative Agent	On file with the Administrative Agent	$	77,500,000		5.1666667	%
The Royal Bank of Scotland plc	On file with the Administrative Agent	On file with the Administrative Agent	$	77,500,000		5.1666667	%
U.S. Bank National Association	On file with the Administrative Agent	On file with the Administrative Agent	$	77,500,000		5.1666667	%

Bank Name	Domestic Lending Office	Eurodollar Lending Office	Commitment		Applicable Percentage
Wells Fargo Bank, N.A.	On file with the Administrative Agent	On file with the Administrative Agent	$	77,500,000		5.1666667	%
CoBank, ACB	On file with the Administrative Agent	On file with the Administrative Agent	$	55,000,000		3.6666667	%
Banco Bilbao Vizcaya Argentaria, S.A., New York Branch	On file with the Administrative Agent	On file with the Administrative Agent	$	45,000,000		3.0000000	%
The Bank of New York Mellon	On file with the Administrative Agent	On file with the Administrative Agent	$	45,000,000		3.0000000	%
Fifth Third Bank	On file with the Administrative Agent	On file with the Administrative Agent	$	45,000,000		3.0000000	%
The Huntington National Bank	On file with the Administrative Agent	On file with the Administrative Agent	$	45,000,000		3.0000000	%
TOTAL			$	1,500,000,000		100	%

Swingline Lender:

Bank Name	Lending Office	Swingline Commitment*
Barclays Bank PLC	745 Seventh Avenue New York, NY 10019	$250,000,000

* Swingline Commitments expressed as totals for this Agreement. Swingline Commitments are within, and not in addition to, the Swingline Lender’s Commitment as a Lender.

SCHEDULE 2.04

EXISTING LETTERS OF CREDIT

LETTER OF CREDIT NO.	ISSUER		APPLICANT	BENEFICIARY	OUTSTANDING BALANCE
SB-00116		Barclays	NiSource Inc.	Travelers Indemnity Company		2,000,000.00
SB-00246		Barclays	Nisource Finance Corp	LIBERTY MUTUAL INSURANCE COMPANY		250,000.00
SB-00399		Barclays	Nisource Finance Corp	ACE American Ins Co / ACE Property + Casualty Ins Co		10,773,024.00
SB-01562		Barclays	Nisource Finance Corp, on behalf of Northern Indiana Public Service Company	MIDWEST INDEPENDENT TRANSMISSION SYSTEM OPERATOR, INC.		5,052,542.00
SB-01606		Barclays	Nisource Finance Corp	OHIO BUREAU OF WORKERS’ COMPENSATION		455,000.00
SB-01624		Barclays	Nisource Finance Corp	Ace America Insurance Company		625,000.00
SB-01643		Barclays	Nisource Finance Corp	BALTIMORE COUNTY, MARYLAND		15,108.50
SB-01654		Barclays	Nisource Finance Corp	BALTIMORE COUNTY, MARYLAND		11,250.00

SCHEDULE 6.01(e)

EXISTING AGREEMENTS

Receivables Purchase Agreements and Receivables Sales Agreement of (a) Columbia Gas of Ohio Receivables Corporation, (b) Columbia Gas of Pennsylvania Receivables Corporation, (c) NIPSCO Accounts Receivables Corporation and (d) any renewal, modification, extension or replacement of the above, in each case, to provide for receivables financings upon terms and conditions not materially more restrictive on the Guarantor and its Subsidiaries, taken as a whole, than the terms and conditions of such renewed, modified, extended or replaced facility.

EX-18.1

Exhibit 18.1

July 31, 2012

NiSource Inc.

801 E. 86th Avenue

Merrillville, Indiana 46410

Dear Sirs/Madams:

At your request, we have read the description included in your Quarterly Report on Form 10-Q to the Securities and Exchange Commission for the quarter ended June 30, 2012, of the facts relating to the change by NiSource Inc. (the “Company”) of the date of its annual goodwill impairment test from June 30 to May 1. We believe, on the basis of the facts so set forth and other information furnished to us by appropriate officials of the Company, that the accounting change described in your Form 10-Q is to an alternative accounting principle that is preferable under the circumstances.

We have not audited any consolidated financial statements of NiSource Inc. and its consolidated subsidiaries as of any date or for any period subsequent to December 31, 2011. Therefore, we are unable to express, and we do not express, an opinion on the facts set forth in the above-mentioned Form 10-Q, on the related information furnished to us by officials of the Company, or on the financial position, results of operations, or cash flows of NiSource Inc. and its consolidated subsidiaries as of any date or for any period subsequent to December 31, 2011.

Yours truly,

/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois

EX-31.1

Exhibit 31.1

Certification Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Robert C. Skaggs, Jr., certify that:

1. I have reviewed this Quarterly Report of NiSource Inc. on Form 10-Q for the quarter ended June 30, 2012;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 31, 2012	By:	/s/ Robert C. Skaggs, Jr.
		Robert C. Skaggs, Jr.
		Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Stephen P. Smith, certify that:

1. I have reviewed this Quarterly Report of NiSource Inc. on Form 10-Q for the quarter ended June 30, 2012;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 31, 2012	By:	/s/ Stephen P. Smith
		Stephen P. Smith
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of NiSource Inc. (the “Company”) on Form 10-Q for the quarter ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert C. Skaggs, Jr., Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

                /s/ Robert C. Skaggs, Jr.            

Robert C. Skaggs, Jr.

Chief Executive Officer

Date:                         July 31, 2012

EX-32.2

Exhibit 32.2

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of NiSource Inc. (the “Company”) on Form 10-Q for the quarter ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen P. Smith, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

                /s/ Stephen P. Smith            

Stephen P. Smith

Executive Vice President and Chief Financial Officer

Date:                         July 31, 2012

XML

Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

		Quoted Prices in		Significant
		Active Markets		Other		Significant
		for Identical		Observable		Unobservable
Recurring Fair Value Measurements		Assets		Inputs		Inputs		Balance as of
June 30, 2012 (in millions)		(Level 1)		(Level 2)		(Level 3)		June 30, 2012
Assets
Commodity Price risk management assets:
	Physical price risk programs	$	-	$	55.9	$	-	$	55.9
	Financial price risk programs		104.4		1.5		-		105.9
Interest rate risk activities			-		48.5		-		48.5
Available-for-sale securities			30.7		69.3		-		100.0
Total		$	135.1	$	175.2	$	-	$	310.3
Liabilities
Commodity Price risk management liabilities:
	Physical price risk programs	$	-	$	0.5	$	-	$	0.5
	Financial price risk programs		176.5		1.0		0.3		177.8
	Total	$	176.5	$	1.5	$	0.3	$	178.3

		Quoted Prices in		Significant
		Active Markets		Other		Significant
		for Identical		Observable		Unobservable
Recurring Fair Value Measurements		Assets		Inputs		Inputs		Balance as of
December 31, 2011 (in millions)		(Level 1)		(Level 2)		(Level 3)		December 31, 2011
Assets
Commodity Price risk management assets:
	Physical price risk programs	$	-	$	140.7	$	-	$	140.7
	Financial price risk programs (1)		148.3		2.5		0.3		151.1
Interest rate risk activities			-		56.7		-		56.7
Available-for-sale securities			32.9		63.1		-		96.0
	Total	$	181.2	$	263.0	$	0.3	$	444.5
Liabilities
Commodity Price risk management liabilities:
	Physical price risk programs	$	-	$	3.9	$	-	$	3.9
	Financial price risk programs		301.1		1.7		-		302.8
	Total	$	301.1	$	5.6	$	-	$	306.7
(1)During the fourth quarter of 2011, NiSource recorded a reserve of $22.6 million on certain assets related to the wind down of the unregulated natural gas marketing business. The financial price risk program amount above is shown gross and has not been adjusted for the reserve.

Available-For-Sale Debt Securities

		Amortized		Total		Total		Fair
(in millions)		Cost		Gains		Losses		Value
Available-for-sale debt securities, June 30, 2012
	U.S. Treasury	$	34.2	$	1.7	$	-	$	35.9
	Corporate/Other		62.1		2.1		(0.1)		64.1
Total Available-for-sale debt securities		$	96.3	$	3.8	$	(0.1)	$	100.0
		Amortized		Total		Total		Fair
(in millions)		Cost		Gains		Losses		Value
Available-for-sale debt securities, December 31, 2011
	U.S. Treasury	$	36.7	$	1.7	$	-	$	38.4
	Corporate/Other		56.3		1.6		(0.3)		57.6
Total Available-for-sale debt securities		$	93.0	$	3.3	$	(0.3)	$	96.0

Reconciliation Of Level 3 Assets And Liabilities Measured At Fair Value On A Recurring Basis

		Other
Three Months Ended June 30, 2012 (in millions)		Derivatives
Balance as of April 1, 2012		$	0.1
Total gains or (losses) (unrealized/realized)
	Included in regulatory assets/liabilities		(0.4)
Balance as of June 30, 2012		$	(0.3)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2012		$	-
		Other
Three Months Ended June 30, 2011 (in millions)		Derivatives
Balance as of April 1, 2011		$	(0.1)
Total gains or losses (unrealized/realized)
	Included in regulatory assets/liabilities		(0.6)
Purchases			(0.5)
Settlements			0.4
Balance as of June 30, 2011		$	(0.8)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2011		$	(1.5)

		Other
Six Months Ended, June 30, 2012 (in millions)		Derivatives
Balance as of January 1, 2012		$	0.3
Total gains or (losses) (unrealized/realized)
	Included in regulatory assets/liabilities		(0.6)
Balance as of June 30, 2012		$	(0.3)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2012		$	-
		Other
Six Months Ended, June 30, 2011 (in millions)		Derivatives
Balance as of January 1, 2011		$	0.2
Total gains or losses (unrealized/realized)
	Included in regulatory assets/liabilities		(1.0)
Purchases			(1.0)
Settlements			1.0
Balance as of June 30, 2011		$	(0.8)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2011		$	(1.5)

Carrying Amount And Estimated Fair Values Of Financial Instruments

	Carrying		Estimated Fair		Carrying		Estimated Fair
	Amount as of		Value as of		Amount as of		Value as of
(in millions)	June 30, 2012		June 30, 2012		Dec. 31, 2011		Dec. 31, 2011
Long-term debt (including current portion)	$	7,573.8	$	8,491.0	$	6,594.4	$	7,369.4

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Quarterly Financial Data (Schedule Of Effects Of The Correcting Adjustments Within Statements Of Consolidated Income) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Quarterly Financial Data [Line Items]
Total Correction		$ 2.2		$ 9.4
Income taxes		0.9		3.8
Electric	377.1	349.2	729.7	695.7
Gross Revenues	1,048.7	1,228.3	2,707.4	3,459.9
Total Net Revenues	807.6	765.8	1,836.0	1,826.5
Operation and maintenance	394.3	400.3	799.7	829.6
Depreciation and amortization	148.0	134.5	294.1	268.8
Total Operating Expenses	607.5	602.6	1,244.2	1,259.9
Operating Income	208.6	165.5	608.0	571.9
Income from continuing operations before income taxes	108.2	71.7	404.6	391.6
Income Taxes	37.7	30.9	140.6	141.7
Income from Continuing Operations	70.5	40.8	264.0	249.9
Net Income	69.4	40.2	262.8	249.7
Basic Earnings (Loss) Per Share, Continuing Operations	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Basic Earnings (Loss) Per Share	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Diluted Earnings (Loss) Per Share, Continuing Operations	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Diluted Earnings (Loss) Per Share	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Previously Reported [Member]
Quarterly Financial Data [Line Items]
Electric		349.2		696.3
Gross Revenues		1,228.3		3,460.5
Total Net Revenues		765.8		1,827.1
Operation and maintenance		402.5		835.0
Depreciation and amortization		134.5		273.4
Total Operating Expenses		604.8		1,269.9
Operating Income		163.3		562.5
Income from continuing operations before income taxes		69.5		382.2
Income Taxes		30.0		137.9
Income from Continuing Operations		39.5		244.3
Net Income		38.9		244.1
Basic Earnings (Loss) Per Share, Continuing Operations		$ 0.14		$ 0.87
Basic Earnings (Loss) Per Share		$ 0.14		$ 0.87
Diluted Earnings (Loss) Per Share, Continuing Operations		$ 0.14		$ 0.85
Diluted Earnings (Loss) Per Share		$ 0.14		$ 0.85
Corrected [Member]
Quarterly Financial Data [Line Items]
Deferred revenue		0		(0.6)
Electric		349.2		695.7
Gross Revenues		1,228.3		3,459.9
Total Net Revenues		765.8		1,826.5
Operation and maintenance		400.3		829.6
Depreciation and amortization		134.5		268.8
Total Operating Expenses		602.6		1,259.9
Operating Income		165.5		571.9
Income from continuing operations before income taxes		71.7		391.6
Income Taxes		30.9		141.7
Income from Continuing Operations		40.8		249.9
Net Income		40.2		249.7
Basic Earnings (Loss) Per Share, Continuing Operations		$ 0.14		$ 0.89
Basic Earnings (Loss) Per Share		$ 0.14		$ 0.89
Diluted Earnings (Loss) Per Share, Continuing Operations		$ 0.14		$ 0.87
Diluted Earnings (Loss) Per Share		$ 0.14		$ 0.87
Environmental Asset Recovery [Member]
Quarterly Financial Data [Line Items]
Operation and maintenance		0		8.0
OPEB Over-Reimbursement [Member]
Quarterly Financial Data [Line Items]
Operation and maintenance		(0.2)		(0.4)
OPEB Regulatory Asset [Member]
Quarterly Financial Data [Line Items]
Operation and maintenance		$ 2.4		$ 2.4

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Earnings Per Share Narative (Details) (Stock Options [Member]) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock Options [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1.6	3.4	1.7	3.4

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Basis of Accounting Presentation (Correcting Adjustments To Net Income) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Basis Of Accounting Presentation [Line Items]
Increase decrease in net income	$ (394.3)	$ (400.3)	$ (799.7)	$ (829.6)
Total Correction		(2.2)		(9.4)
Income taxes		(0.9)		(3.8)
Net Income	69.4	40.2	262.8	249.7
Previously Reported [Member]
Basis Of Accounting Presentation [Line Items]
Increase decrease in net income		(402.5)		(835.0)
Net Income		38.9		244.1
Corrected [Member]
Basis Of Accounting Presentation [Line Items]
Deferred revenue		0		0.6
Increase decrease in net income		(400.3)		(829.6)
Net Income		40.2		249.7
Environmental Asset Recovery [Member]
Basis Of Accounting Presentation [Line Items]
Increase decrease in net income		0		(8.0)
OPEB Over-Reimbursement [Member]
Basis Of Accounting Presentation [Line Items]
Increase decrease in net income		0.2		0.4
OPEB Regulatory Asset [Member]
Basis Of Accounting Presentation [Line Items]
Increase decrease in net income		$ (2.4)		$ (2.4)

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Fair Value Disclosures (Fair Value Of Financial Assets And Liabilities Measured On A Recurring Basis) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sale securities	$ 100.0	$ 96.0
Fair value assets measured on recurring basis, total	310.3	444.5
Fair value liabilities measured on recurring basis, total	178.3	306.7
Physical Price Risk Programs [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	55.9	140.7
Fair value liabilities measured on recurring basis, derivative financial instruments	0.5	3.9
Financial Price Risk Programs [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	105.9	151.1
Fair value liabilities measured on recurring basis, derivative financial instruments	177.8	302.8
Interest Rate Risk Activities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	48.5	56.7
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sale securities	30.7	32.9
Fair value assets measured on recurring basis, total	135.1	181.2
Fair value liabilities measured on recurring basis, total	176.5	301.1
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | Physical Price Risk Programs [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	0	0
Fair value liabilities measured on recurring basis, derivative financial instruments	0	0
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | Financial Price Risk Programs [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	104.4	148.3	[1]
Fair value liabilities measured on recurring basis, derivative financial instruments	176.5	301.1
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | Interest Rate Risk Activities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	0	0
Significant Other Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sale securities	69.3	63.1
Fair value assets measured on recurring basis, total	175.2	263.0
Fair value liabilities measured on recurring basis, total	1.5	5.6
Significant Other Observable Inputs (Level 2) [Member] | Physical Price Risk Programs [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	55.9	140.7
Fair value liabilities measured on recurring basis, derivative financial instruments	0.5	3.9
Significant Other Observable Inputs (Level 2) [Member] | Financial Price Risk Programs [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	1.5	2.5
Fair value liabilities measured on recurring basis, derivative financial instruments	1.0	1.7
Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Risk Activities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	48.5	56.7
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sale securities	0	0
Fair value assets measured on recurring basis, total	0	0.3
Fair value liabilities measured on recurring basis, total	0.3	0
Significant Unobservable Inputs (Level 3) [Member] | Physical Price Risk Programs [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	0	0
Fair value liabilities measured on recurring basis, derivative financial instruments	0	0
Significant Unobservable Inputs (Level 3) [Member] | Financial Price Risk Programs [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	0	0.3
Fair value liabilities measured on recurring basis, derivative financial instruments	0.3	0
Significant Unobservable Inputs (Level 3) [Member] | Interest Rate Risk Activities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fair value assets measured on recurring basis, derivative financial instruments	$ 0	$ 0

[1] During the fourth quarter of 2011, NiSource recorded a reserve of $22.6 million on certain assets related to the wind down of the unregulated natural gas marketing business. The financial price risk program amount above is shown gross and has not been adjusted for the reserve.

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Earnings Per Share Table (Details) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Earnings Per Share [Abstract]
Basic average common shares outstanding	284,370	280,217	283,648	279,780
Nonqualified stock options	201	0	157	0
Shares contingently issuable under employee stock plans	284	1,078	270	1,061
Shares restricted under stock plans	620	342	607	326
Forward Agreements	10,292	5,422	9,921	4,989
Diluted Average Common Shares (millions)	295,767	287,059	294,603	286,156

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Income Taxes (Schedule Of Components Of Income Tax Expense) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Taxes [Abstract]
Income Taxes from Continuing Operations	$ 37.7	$ 30.9	$ 140.6	$ 141.7

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Condensed Financial Information Of Registrant (Notes To Financial Statements) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Condensed Financial Information Of Registrant [Line Items]
Investments in subsidiary companies	$ 211.5		$ 211.5		$ 204.7
Total Investments and Other Assets	368.5		368.5		355.8
Total Assets	20,409.4		20,409.4		20,708.3
Common stock equity	5,105.3		5,105.3		4,997.3
Total Capitalization	11,912.2		11,912.2		11,264.4
Other non-current liabilities	242.1		242.1		244.7
TOTAL CAPITALIZATION AND LIABILITIES	20,409.4		20,409.4		20,708.3
Equity in net earnings of consolidated subsidiaries	8.5	2.3	16.2	5.3
Total Other income (deductions)	(100.4)	(93.8)	(203.4)	(180.3)
Income from continuing operations before income taxes	108.2	71.7	404.6	391.6
Income taxes	37.7	30.9	140.6	141.7
Income from continuing operations	70.5	40.8	264.0	249.9
NET INCOME	69.4	40.2	262.8	249.7
Continuing Operations	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Basic earnings per share	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Continuing operations	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Diluted earnings per share	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Previously Reported [Member]
Condensed Financial Information Of Registrant [Line Items]
Income from continuing operations before income taxes		69.5		382.2
Income taxes		30.0		137.9
Income from continuing operations		39.5		244.3
NET INCOME		38.9		244.1
Continuing Operations		$ 0.14		$ 0.87
Basic earnings per share		$ 0.14		$ 0.87
Continuing operations		$ 0.14		$ 0.85
Diluted earnings per share		$ 0.14		$ 0.85
Corrected [Member]
Condensed Financial Information Of Registrant [Line Items]
Income from continuing operations before income taxes		71.7		391.6
Income taxes		30.9		141.7
Income from continuing operations		40.8		249.9
NET INCOME		$ 40.2		$ 249.7
Continuing Operations		$ 0.14		$ 0.89
Basic earnings per share		$ 0.14		$ 0.89
Continuing operations		$ 0.14		$ 0.87
Diluted earnings per share		$ 0.14		$ 0.87

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2012

Supplemental Cash Flow Information [Abstract]

Additional Information Regarding Condensed Statements Of Consolidated Cash Flows

Six Months Ended June 30, (in millions)		2012		2011
Supplemental Disclosures of Cash Flow Information
Non-cash transactions:
	Capital expenditures included in current liabilities	$	105.6	$	65.1
	Stock issuance to employee saving plans		12.4		10.8
Schedule of interest and income taxes paid:
	Cash paid for interest, net of interest capitalized amounts	$	197.2	$	180.0
	Cash paid for income taxes		7.0		4.7

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Nature Of Operations And Summary Of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2012

Basis Of Accounting Presentation [Abstract]

Correcting Adjustments To Net Income

		Three Months Ended		Six Months Ended
Increase/(Decrease) in Net Income (in millions)		June 30, 2011		June 30, 2011
Previously reported Net Income		$	38.9	$	244.1
	Deferred revenue		-		(0.6)
	Environmental asset recovery		-		8.0
	OPEB over-reimbursement		(0.2)		(0.4)
	OPEB regulatory asset		2.4		2.4
	Total corrections		2.2		9.4
	Income taxes		0.9		3.8
Corrected Net Income		$	40.2	$	249.7

Correcting Adjustments To Consolidated Income

Condensed Statements of Consolidated Income (unaudited)
		Three Months Ended				Six Months Ended
		June 30, 2011				June 30, 2011
		As Previously				As Previously
(in millions, except per share amounts)		Reported		As Corrected		Reported		As Corrected
Net Revenues
	Electric	$	349.2	$	349.2	$	696.3	$	695.7
Gross Revenues			1,228.3		1,228.3		3,460.5		3,459.9
Total Net Revenues			765.8		765.8		1,827.1		1,826.5
	Operation and maintenance		402.5		400.3		835.0		829.6
	Depreciation and amortization		134.5		134.5		273.4		268.8
Total Operating Expenses			604.8		602.6		1,269.9		1,259.9
Operating Income			163.3		165.5		562.5		571.9
Income from Continuing Operations before Income Taxes			69.5		71.7		382.2		391.6
Income Taxes			30.0		30.9		137.9		141.7
Income from Continuing Operations			39.5		40.8		244.3		249.9
Net Income		$	38.9	$	40.2	$	244.1	$	249.7
Basic Earnings Per Share ($)
	Continuing operations	$	0.14	$	0.14	$	0.87	$	0.89
Basic Earnings Per Share		$	0.14	$	0.14	$	0.87	$	0.89
Diluted Earnings Per Share ($)
	Continuing operations	$	0.14	$	0.14	$	0.85	$	0.87
Diluted Earnings Per Share		$	0.14	$	0.14	$	0.85	$	0.87

Computation Of Diluted Average Common Shares

			Three Months Ended		Six Months Ended
			June 30,		June 30,
(in thousands)			2012	2011	2012	2011
Denominator
	Basic average common shares outstanding		284,370	280,217	283,648	279,780
	Dilutive potential common shares
		Stock options	201	-	157	-
		Shares contingently issuable under employee stock plans	284	1,078	270	1,061
		Shares restricted under stock plans	620	342	607	326
		Forward Agreements	10,292	5,422	9,921	4,989
Diluted Average Common Shares			295,767	287,059	294,603	286,156

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Income Taxes (Schedule Of Reasons Behind Differences In Computation Of Total Income Taxes) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Taxes [Abstract]
Book income from Continuing Operations before income taxes	$ 108.2	$ 71.7	$ 404.6	$ 391.6
Income Taxes from Continuing Operations	$ 37.7	$ 30.9	$ 140.6	$ 141.7
Income Taxes from Continuing Operations, rate	34.80%	43.10%	34.80%	36.20%

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Fair Value Disclosures (Carrying Amount And Estimated Fair Values Of Financial Instruments) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value Disclosures [Abstract]
Long-term debt (including current portion), Carrying Amount	$ 7,573.8	$ 6,594.4
Long-term debt (including current portion), Estimated Fair Value	$ 8,491.0	$ 7,369.4

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Short-Term Borrowings (Schedule Of Short-Term Borrowings) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Short-term Debt [Line Items]
Commercial paper	$ 134.4	$ 402.7
Credit facilities borrowings	0	725.0
Accounts receivable securitization facility borrowings	193.2	231.7
Total short-term borrowings	$ 327.6	$ 1,359.4
Commercial Paper [Member]
Short-term Debt [Line Items]
Commercial Paper/credit facilities borrowings, weighted average interest rate	1.16%	1.00%
Credit Facilities [Member]
Short-term Debt [Line Items]
Commercial Paper/credit facilities borrowings, weighted average interest rate	0.00%	1.99%

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Gas in Storage (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012
Gas in Storage [Line Items]
Temporary LIFO liquidation debit	$ 8.9

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Hurricanes And Other Items (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Hurricanes And Other Items [Abstract]
Insurance recoveries	$ 0	$ 0

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Goodwill And Other Intangible Assets (Details) (USD $) In Millions, unless otherwise specified			6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2012 Northern Indiana Fuel And Light [Member]	Jun. 30, 2012 Columbia Distribution [Member]	Jun. 30, 2012 Columbia Gas Transmission LLC [Member]
Goodwill And Other Intangible Assets [Line Items]
Goodwill	$ 3,677.3	$ 3,677.3	$ 18.8	$ 1,700.0	$ 2,000.0
Goodwill discount rate			5.60%	5.60%	5.60%
Fair value amount above carrying value of goodwill			$ 356.0	$ 1,682.0	$ 1,643.0

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Variable Interest Entities And Equity Investments (Schedule Of Immaterial Nature Of Equity Investments) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Schedule of Equity Method Investments [Line Items]
Net Revenues	$ 807.6	$ 765.8	$ 1,836.0	$ 1,826.5
Operating Income	208.6	165.5	608.0	571.9
Net Income	69.4	40.2	262.8	249.7
Total Assets	20,409.4		20,409.4		20,708.3
Stockholders Equity	$ 5,105.3		$ 5,105.3		$ 4,997.3

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Pension And Other Postretirement Benefits (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Defined Benefit Plan Disclosure [Line Items]
Pension and other postretirement benefit cost capitalized	$ 5.3	$ 1.7	$ 10.9	$ 8.8
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Employer contributions			1.6
Defined benefit plan, net periodic benefit cost	16.9	11.5	33.8	23.0
Amortization of transition obligation	0	0	0	0
Amortization of prior service cost	0.1	0.1	0.2	0.2
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Employer contributions			23.3
Defined benefit plan, net periodic benefit cost	8.0	7.3	16.0	14.6
Amortization of transition obligation	0.3	0.3	0.6	0.6
Amortization of prior service cost	$ (0.1)	$ (0.1)	$ (0.2)	$ (0.2)

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Long-Term Debt (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended					0 Months Ended		0 Months Ended		0 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Apr. 05, 2012	Dec. 31, 2011	Sep. 16, 2005	Feb. 15, 2043 5.25% Senior Unsecured Notes Due February 15, 2043 [Member]	Jun. 15, 2012 5.25% Senior Unsecured Notes Due February 15, 2043 [Member]	Feb. 15, 2023 3.85% Senior Unsecured Notes Due February 15, 2023 [Member]	Jun. 15, 2012 3.85% Senior Unsecured Notes Due February 15, 2023 [Member]	Apr. 05, 2015 LIBOR plus 137 basis points three-year bank term loan due April 3, 2015	Jun. 30, 2012 NiSource Finance [Member]
Debt Instrument [Line Items]
Face amount of notes			$ 250.0		$ 1,000.0		$ 500.0		$ 250.0
Debt instrument maturity date						February 15, 2043		February 15, 2023		April 3, 2015
Interest rate on debt							5.25%		3.85%
Loss on early extinguishment of debt	0	0
Assets	$ 20,409.4			$ 20,708.3
Debt Instrument, Description of Variable Rate Basis											LIBOR plus 137 basis points

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Income Taxes (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Taxes [Line Items]
Effective income tax rates	34.80%	43.10%	34.80%	36.20%
Effective Income Tax Rate Reconciliation Dollar Change in Enacted Tax Rate			$ 6.8
Increase in overall effective tax rate compared to prior year	8.30%		1.40%
Unrecorded tax benefits	$ 80.9		$ 80.9

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Fair Value Disclosures (Available-For-Sale Debt Securities) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value Disclosure [Line Items]
Amortized Cost	$ 96.3	$ 93.0
Gross Unrealized Gains	3.8	3.3
Gross Unrealized Losses	(0.1)	(0.3)
Fair Value	100.0	96.0
Government [Member]
Fair Value Disclosure [Line Items]
Amortized Cost	34.2	36.7
Gross Unrealized Gains	1.7	1.7
Gross Unrealized Losses	0	0
Fair Value	35.9	38.4
Corporate/Other Bonds [Member]
Fair Value Disclosure [Line Items]
Amortized Cost	62.1	56.3
Gross Unrealized Gains	2.1	1.6
Gross Unrealized Losses	(0.1)	(0.3)
Fair Value	$ 64.1	$ 57.6

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Variable Interest Entities And Equity Investments

6 Months Ended

Jun. 30, 2012

Variable Interest Entities And Equity Investments [Abstract]

Variable Interest Entities And Equity Investments

15.       Variable Interests and Variable Interest Entities

In general, a VIE is an entity which (1) has an insufficient amount of at-risk equity to permit the entity to finance its activities without additional financial subordinated support provided by any parties, (2) whose at-risk equity owners, as a group, do not have power, through voting rights or similar rights, to direct activities of the entity that most significantly impact the entity's economic performance or (3) whose at-risk owners do not absorb the entity's losses or receive the entity's residual return. A VIE is required to be consolidated by a company if that company is determined to be the primary beneficiary of the VIE.

NiSource consolidates those VIEs for which it is the primary beneficiary. NiSource considers quantitative and qualitative elements in determining the primary beneficiary. Qualitative measures include the ability to control an entity and the obligation to absorb losses or the right to receive benefits.

NiSource's analysis includes an assessment of guarantees, operating leases, purchase agreements, and other contracts, as well as its investments and joint ventures. For items that have been identified as variable interests, or where there is involvement with an identified VIE, an in-depth review of the relationship between the relevant entities and NiSource is made to evaluate qualitative and quantitative factors to determine the primary beneficiary, if any, and whether additional disclosures would be required under the current standard.

At June 30, 2012, consistent with prior periods, NiSource consolidated its low income housing real estate investments from which NiSource derives certain tax benefits. As of June 30, 2012, NiSource is a 99% limited partner with a net investment of approximately $0.2million. Consistent with prior periods, NiSource evaluated the nature and intent of the low income housing investments when determining the primary beneficiary. NiSource concluded that it continues to be the primary beneficiary.Subject to certain conditions precedent, NiSource has the contractual right to take control of the low income housing properties.At June 30, 2012, net assets of the low income housing real estate investments in continuing operations were $6.6million. Current and non-current assets were $0.3 million and $6.3million, respectively. As of June 30, 2012, NiSource has long-term debt of approximately $5.5million as a result of consolidating these investments. However, this debt is nonrecourse to NiSource and NiSource's direct and indirect subsidiaries. Approximately $0.4million of the assets are restricted to settle the obligations of the entity.

Northern Indiana has a service agreement with Pure Air, a general partnership between Air Products and Chemicals, Inc. and First Air Partners LP, under which Pure Air provides scrubber services to reduce sulfur dioxide emissions for Units 7 and 8 at the Bailly Generating Station. Services under this contract commenced on July 1, 1992 and expired on June 30, 2012. The agreement was renewed on June 29, 2012 for ten years and Northern Indiana will continue to pay for the services under a combination of fixed and variable charges. NiSource has made an exhaustive effort to obtain information needed from Pure Air to determine the status of Pure Air as a VIE. However, Northern Indiana had not been able to obtain this information and as a result, it is unclear whether Pure Air is a VIE and if Northern Indiana is the primary beneficiary. Northern Indiana will continue to request the information required to determine whether Pure Air is a VIE. Northern Indiana has no exposure to loss related to the service agreement with Pure Air and payments under this agreement were $10.7 million and $10.1 million for the six months ended June 30, 2012 and 2011, respectively.

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Nature Of Operations And Summary Of Significant Accounting Policies (Correcting Adjustments To Balance Sheet) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Basis Of Accounting Presentation [Line Items]
Underrecovered gas and fuel costs	$ 1.9	$ 20.7
Regulatory Assets	192.9	169.7
Total Current Assets	1,751.6	2,248.2
Regulatory assets	1,899.2	1,978.2
Total Other Assets	6,140.3	6,304.2
Total Assets	20,409.4	20,708.3
Retained Earnings (Accumulated Deficit)	980.9	917.0
Stockholders Equity	5,105.3	4,997.3
Total Capitalization	11,912.2	11,264.4
Overrecovered gas and fuel costs	84.1	48.9
Other accruals	219.8	301.0
Total Current Liabilities	2,662.3	3,646.4
Deferred income taxes	2,730.5	2,541.9
Total Other Liabilities and Deferred Credits	5,834.9	5,797.5
Total Capitalization and Liabilities	$ 20,409.4	$ 20,708.3

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Short-Term Borrowings (Tables)

6 Months Ended

Jun. 30, 2012

Short-Term Borrowings [Abstract]

Schedule Of Short-Term Borrowings

	June 30,		December 31,
(in millions)	2012		2011
Commercial Paper weighted average interest rate of 1.16% and 1.01% at June 30, 2012 and December 31, 2011, respectively.	$	134.4	$	402.7
Credit facilities borrowings weighted average interest rate of 1.99% at December 31, 2011.		-		725.0
Accounts receivable securitization facility borrowings		193.2		231.7
Total short-term borrowings	$	327.6	$	1,359.4

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Transfers Of Financial Assets (Schedule Of Gross And Net Receivables Transferred As Well As Short-Term Borrowings Related To The Securitization Transactions) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Transfers Of Financial Assets [Abstract]
Gross Receivables interest	$ 335.6	$ 510.5
Less: Receivables not transferred	142.4	278.8
Net receivables transferred	193.2	231.7
Short-term debt due to asset securitization	$ 193.2	$ 231.7

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Segments Of Business (Narrative) (Details)	6 Months Ended
	Jun. 30, 2012
Segments Of Business [Abstract]
Primary business segments	three
Number of counties in which electric service provided by Electric Operations	20

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Asset Retirement Obligations (Tables)

6 Months Ended

Jun. 30, 2012

Asset Retirement Obligations [Abstract]

Changes In Company's Liability For Asset Retirement Obligations

(in millions)		2012		2011
Balance as of January 1,		$	146.4	$	138.8
	Accretion expense		0.5		0.3
	Accretion recorded as a regulatory asset/liability		4.3		3.8
	Settlements		(1.5)		(1.1)
	Change in estimated cash flows		-		(2.9)
Balance as of June 30,		$	149.7	$	138.9

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Nature Of Operations And Summary Of Significant Accounting Policies (Correcting Adjustments To Equity And Comprehensive Income) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Basis Of Accounting Presentation [Line Items]
Beginning Balance			$ 4,997.3
Net Income	69.4	40.2	262.8	249.7
Total comprehensive income	71.3	42.3	263.5	253.1
Ending Balance	5,105.3		5,105.3
Previously Reported [Member]
Basis Of Accounting Presentation [Line Items]
Net Income		38.9		244.1
Corrected [Member]
Basis Of Accounting Presentation [Line Items]
Net Income		$ 40.2		$ 249.7

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Risk Management And Energy Marketing Activities (Location And Fair Value Of Derivative Instruments On Consolidated Balance Sheets) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	$ 210.3	$ 348.5	[1]
Total Liability Derivatives	178.3	306.7
Reserve on assets current	0	4.6
Reserve on assets noncurrent	0	18.0
Fair value reserve recorded on certain assets related to the wind down of the regulated natural gas marketing business	0	22.6
Designated As Hedging Instruments [Member] | Interest Rate Risk Activities [Member]
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	48.5	56.7	[1]
Designated As Hedging Instruments [Member] | Interest Rate Risk Activities [Member] | Price Risk Management Assets (Current) [Member]
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	0	0	[1]
Designated As Hedging Instruments [Member] | Interest Rate Risk Activities [Member] | Price Risk Management Assets (Noncurrent) [Member]
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	48.5	56.7	[1]
Designated As Hedging Instruments [Member] | Interest Rate Risk Activities [Member] | Price Risk Management Liabilities (Current) [Member]
Derivatives, Fair Value [Line Items]
Total Liability Derivatives	0	0.4
Designated As Hedging Instruments [Member] | Interest Rate Risk Activities [Member] | Price Risk Management Liabilities (Noncurrent) [Member]
Derivatives, Fair Value [Line Items]
Total Liability Derivatives		0.1
Designated As Hedging Instruments [Member] | Commodity Price Risk Programs [Member]
Derivatives, Fair Value [Line Items]
Total Liability Derivatives	0	0.5
Designated As Hedging Instruments [Member] | Commodity Price Risk Programs [Member] | Price Risk Management Liabilities (Noncurrent) [Member]
Derivatives, Fair Value [Line Items]
Total Liability Derivatives	0
Not Designated As Hedging Instruments [Member] | Commodity Price Risk Programs [Member]
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	161.8	291.8	[1]
Total Liability Derivatives	178.3	306.2
Not Designated As Hedging Instruments [Member] | Commodity Price Risk Programs [Member] | Price Risk Management Assets (Current) [Member]
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	120.0	141.8	[1]
Not Designated As Hedging Instruments [Member] | Commodity Price Risk Programs [Member] | Price Risk Management Assets (Noncurrent) [Member]
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	41.8	150.0	[1]
Not Designated As Hedging Instruments [Member] | Commodity Price Risk Programs [Member] | Price Risk Management Liabilities (Current) [Member]
Derivatives, Fair Value [Line Items]
Total Liability Derivatives	132.7	167.4
Not Designated As Hedging Instruments [Member] | Commodity Price Risk Programs [Member] | Price Risk Management Liabilities (Noncurrent) [Member]
Derivatives, Fair Value [Line Items]
Total Liability Derivatives	$ 45.6	$ 138.8

[1] During the fourth quarter of 2011, NiSource recorded reserves of $22.6 million ($4.6 million current and $18.0 million noncurrent) on certain commodity price risk assets related to the wind down of the unregulated natural gas marketing business. As of June 30, 2012, NiSource has fully reversed these reserves as all contracts have been settled. The non-designated price risk asset amounts above are shown gross and have not been adjusted for the reserves.

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Quarterly Financial Data (Schedule Of Quarterly Financial Data) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Apr. 05, 2012	Sep. 16, 2005
Quarterly Financial Data [Line Items]
Gross Revenues	$ 1,048.7	$ 1,228.3	$ 2,707.4	$ 3,459.9
Operating Income	208.6	165.5	608.0	571.9
Income from Continuing Operations	70.5	40.8	264.0	249.9
Results from Discontinued Operations-net of taxes	(1.1)	(0.6)	(1.2)	(0.2)
Net Income	69.4	40.2	262.8	249.7
Basic Earnings (Loss) Per Share, Continuing Operations	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Basic Earnings (Loss) Per Share, Discontinued Operations	$ 0	$ 0	$ 0	$ 0
Basic Earnings (Loss) Per Share	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Diluted Earnings (Loss) Per Share, Continuing Operations	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Diluted Earnings (Loss) Per Share, Discontinued Operations	$ 0	$ 0	$ 0	$ 0
Diluted Earnings (Loss) Per Share	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Face amount of notes					250.0	1,000.0
Loss on early extinguishment of debt			$ 0	$ 0

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Asset Retirement Obligations (Changes In Company's Liability For Asset Retirement Obligations) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Asset Retirement Obligations [Abstract]
Beginning Balance	$ 146.4	$ 138.8
Accretion expense	0.5	0.3
Accretion recorded as a regulatory asset	4.3	3.8
Settlements	(1.5)	(1.1)
Change in estimated cash flows	0	(2.9)
Ending Balance	$ 149.7	$ 138.9

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Nature Of Operations And Summary Of Significant Accounting Policies (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Nov. 03, 2011
Basis Of Accounting Presentation [Line Items]
Operation and maintenance expense	$ 394.3	$ 400.3	$ 799.7	$ 829.6
Mark-to-market loss					46.4
Depreciation and amortization	148.0	134.5	294.1	268.8
MF Global [Member]
Basis Of Accounting Presentation [Line Items]
Initial margin to open accounts for mark-to-market losses					6.9
Environmental Asset Recovery [Member]
Basis Of Accounting Presentation [Line Items]
Operation and maintenance expense		0		8.0
OPEB Over-Reimbursement [Member]
Basis Of Accounting Presentation [Line Items]
Operation and maintenance expense		(0.2)		(0.4)
OPEB Regulatory Asset [Member]
Basis Of Accounting Presentation [Line Items]
Operation and maintenance expense		$ 2.4		$ 2.4

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Statements Of Consolidated Common Stockholders' Equity And Comprehensive Income (Loss) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Beginning Balance					$ 4,997.3
Comprehensive Income (Loss):
Net Income	69.4		40.2		262.8		249.7
Gain on available for sale securities:
Net unrealized gains (losses) on derivatives qualifying as cash flow hedges					19.2
Unrecognized Pension Benefit and Other Postretirement Benefit Costs	0.7	[1]	0.4	[1]	1.3	[1]	0.8	[1]
Total comprehensive income	71.3		42.3		263.5		253.1
Ending Balance	$ 5,105.3				$ 5,105.3

[1] Unrecognized pension benefit and OPEB costs, net of $0.3 million tax expense in the second quarter of 2012 and 2011, and $0.8 million and $0.7 million tax expense for the first six months of 2012 and 2011, respectively.

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Regulatory Matters (Narrative) (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended				6 Months Ended		0 Months Ended	12 Months Ended					12 Months Ended
	Apr. 30, 2012 Columbia Of Ohio [Member] Mcf	Apr. 10, 2012 Columbia Of Ohio [Member]	Feb. 28, 2012 Columbia Of Ohio [Member]	Feb. 14, 2012 Columbia Of Ohio [Member] Mcf	Jun. 30, 2012 Columbia Of Ohio [Member]	Apr. 19, 2012 Columbia Of Ohio [Member]	Jul. 18, 2011 Northern Indiana [Member]	Dec. 31, 2011 Northern Indiana [Member]	Jun. 30, 2012 Northern Indiana [Member]	Jun. 30, 2011 Northern Indiana [Member]	Dec. 09, 2009 Northern Indiana [Member]	Sep. 23, 2002 Northern Indiana [Member]	Dec. 31, 2011 Columbia Gulf Rate Case [Member] Dth	Oct. 28, 2010 Columbia Gulf Rate Case [Member]	Apr. 13, 2012 Columbia Of Massachusetts [Member]	Dec. 31, 2011 Toledo Project [Member] Columbia Of Ohio [Member]
Regulatory Matters [Line Items]
Annual revenue increase base rate case														$ 50.0	$ 29.2
Increase base rate													0.1520
Refunds of base rate													16
Retail price adjustment per Mcf				1.53
Refund to customers									(1.0)	25.1		55.1
Investment Rights									100.00%
Deferred costs																2.4
Overall rate of return							4.50%
Rate of return							6.98%
Rate of return on equity							10.20%
IURC set up overall annual energy savings goal to be achieved											2.00%
Overall annual energy savings goal achievement period, in years											10
ECT net capital expenditures								109.6
ECT Operating And Maintenance And Depreciation Expense								32.6
Annual revenue increase from IRP and DSM Riders			27.9
Annual revenue increase from Riders in settlement		27
Increase to uncollectible expense rider rate						14.6
Previous Percentage of Income Payment Plan Rider	0.1274
Effective Percentage of Income Payment Plan Rider	0.0294
Overrecovery Passback	10.9
OPEB expenses allocated to COH					$ 2.1

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Other Commitments And Contingencies (Tables)

6 Months Ended

Jun. 30, 2012

Other Commitments And Contingencies [Abstract]

Existence And Expiration Of Commercial Commitments

(in millions)		Total		2012		2013		2014		2015		2016		After
Guarantees of subsidiaries debt		$	7,120.9	$	315.0	$	420.3	$	500.0	$	480.0	$	291.6	$	5,114.0
Guarantees supporting commodity
	transactions of subsidiaries		140.9		44.5		14		0.5		80.0		-		1.9
Accounts receivable securitization			193.2		193.2		-		-		-		-		-
Lines of credit			134.4		134.4		-		-		-		-		-
Letters of credit			37.5		28.4		8.1		1.0		-		-		-
Other guarantees			310.4		33.0		223.7		32.2		3.0		-		18.5
Total commercial commitments		$	7,937.3	$	748.5	$	666.1	$	533.7	$	563.0	$	291.6	$	5,134.4

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Other Commitments And Contingencies

6 Months Ended

Jun. 30, 2012

Other Commitments And Contingencies [Abstract]

Other Commitments And Contingencies

19.       Other Commitments and Contingencies

A.       Guarantees and Indemnities. As a part of normal business, NiSource and certain subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of certain subsidiaries. Such agreements include guarantees and stand-by letters of credit. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the subsidiaries' intended commercial purposes. The total guarantees and indemnities in existence at June 30, 2012 and the years in which they expire were:

(in millions)		Total		2012		2013		2014		2015		2016		After
Guarantees of subsidiaries debt		$	7,120.9	$	315.0	$	420.3	$	500.0	$	480.0	$	291.6	$	5,114.0
Guarantees supporting commodity
	transactions of subsidiaries		140.9		44.5		14		0.5		80.0		-		1.9
Accounts receivable securitization			193.2		193.2		-		-		-		-		-
Lines of credit			134.4		134.4		-		-		-		-		-
Letters of credit			37.5		28.4		8.1		1.0		-		-		-
Other guarantees			310.4		33.0		223.7		32.2		3.0		-		18.5
Total commercial commitments		$	7,937.3	$	748.5	$	666.1	$	533.7	$	563.0	$	291.6	$	5,134.4

Guarantees of Subsidiaries Debt.NiSource has guaranteed the payment of $7.1 billion of debt for various wholly-owned subsidiaries including NiSource Finance and Columbia of Massachusetts, and through a support agreement, Capital Markets, which is reflected on NiSource's Condensed Consolidated Balance Sheets (unaudited). The subsidiaries are required to comply with certain covenants under the debt indenture and in the event of default, NiSource would be obligated to pay the debt's principal and related interest. NiSource does not anticipate its subsidiaries will have any difficulty maintaining compliance. On October 3, 2011, NiSource executed a Second Supplemental Indenture to the original Columbia of Massachusetts Indenture dated April 1, 1991, for the specific purpose of guaranteeing Columbia of Massachusetts' outstanding medium-term notes.

Guarantees Supporting Commodity Transactions of Subsidiaries.NiSource has issued guarantees, which support up to $140.9million of commodity-related payments for its current subsidiaries involved in energy marketing activities. These guarantees were provided to counterparties in order to facilitate physical and financial transactions involving natural gas services. To the extent liabilities exist under the commodity-related contracts subject to these guarantees, such liabilities are included in the Condensed Consolidated Balance Sheets (unaudited).

Lines and Letters of Credit and Accounts Receivable Advances. During May 2012, NiSource Finance amendeditsexisting $1.5 billion revolving credit facility with a syndicate of banks led by Barclays Capital, extending the termination date toMay 15, 2017also reducing the borrowing costs under the facility. The purpose of the facility is to fund ongoing working capital requirements including the provision of liquidity support for NiSource's commercial paper program, provide for the issuance of letters of credit, and also for general corporate purposes. At June 30, 2012, NiSource had noborrowings under its five-year revolving credit facility, $134.4 million in commercial paper outstanding and $193.2 million outstanding under its accounts receivable securitization agreements. At June 30, 2012, NiSource issued stand-by letters of credit of approximately $##D<FN_CYLOC>million for the benefit of third parties. See Note 17, “Short-Term Borrowings,” for additional information.

Other Guarantees or Obligations. On June 30, 2008, NiSource's subsidiary, PEI, sold Whiting Clean Energy to BPAE for $216.7 million which included $16.1 million in working capital. The agreement with BPAE contains representations, warranties, covenants and closing conditions. NiSource has executed purchase and sales agreement guarantees totaling $220 million which guarantee performance of PEI's covenants, agreements, obligations, liabilities, representations and warranties under the agreement with BPAE. No amounts related to the purchase and sales agreement guarantees are reflected in the Condensed Consolidated Balance Sheet (unaudited) as of June 30, 2012. These guarantees are due to expire in June 2013.

NiSource has additional purchase and sales agreement guarantees totaling $30.0 million, which guarantee performance of the seller's covenants, agreements, obligations, liabilities, representations and warranties under the agreements. No amounts related to the purchase and sales agreement guarantees are reflected in the Condensed Consolidated Balance Sheets (unaudited). Management believes that the likelihood NiSource would be required to perform or otherwise incur any significant losses associated with any of the aforementioned guarantees is remote.

In connection with Millennium's refinancing of its long-term debt in August 2010,NiSource provided a letter of credit to Union Bank N.A., as Collateral Agent for deposit into a debt service reserve account as required under the Deposit and Disbursement Agreement governing the Millennium notes offering. This account is to be drawn upon by the note holders in the event that Millennium is delinquent on its principal and interest payments. The value of NiSource's letter of credit represents 47.5% (NiSource's ownership percentage in Millennium) of the Debt Service Reserve Account requirement, or $16.2 million. The total exposure for NiSource is $16.2 million. NiSource has an accrued liability of $1.5 million related to the inception date fair value of this guarantee as of June 30, 2012.

NiSource has issued other guarantees supporting derivative related payments associated with interest rate swap agreements issued by NiSource Finance, operating leases for many of its subsidiaries and for other agreements entered into by its current and former subsidiaries.

B.       Other Legal Proceedings. In the normal course of its business, NiSource and its subsidiaries have been named as defendants in various legal proceedings. In the opinion of management, the ultimate disposition of these currently asserted claims will not have a material impact on NiSource's consolidated financial statements.

C.       Environmental Matters.

NiSource operations are subject to environmental statutes and regulations related to air quality, water quality, hazardous waste and solid waste. NiSource believes that it is in substantial compliance with those environmental regulations currently applicable to its operations and believes that it has all necessary permits to conduct its operations.

It is management's continued intent to address environmental issues in cooperation with regulatory authorities in such a manner as to achieve mutually acceptable compliance plans. However, there can be no assurance that fines and penalties will not be incurred. Management expects a significant portion of environmental assessment and remediation costs to be recoverable through rates for certain NiSource companies.

As of June 30, 2012 and December 31, 2011, NiSource had recorded reserves of approximately $168.0million and $173.5 million, respectively, to cover environmental remediation at various sites. The current portion of this reserve is included in Legal and Environmental Reserves in the Condensed Consolidated Balance Sheet. The noncurrent portion is included in Other Noncurrent Liabilities in the Condensed Consolidated Balance Sheet. NiSource accrues for costs associated with environmental remediation obligations when the incurrence of such costs is probable and the amounts can be reasonably estimated. The original estimates for cleanup can differ materially from the amount ultimately expended. The actual future expenditures depend on many factors, including currently enacted laws and regulations, the nature and extent of contamination, the method of cleanup, and the availability of cost recovery from customers. These expenditures are not currently estimable at some sites. NiSource periodically adjusts its reserves as information is collected and estimates become more refined.

Air

The actions listed below could require further reductions in emissions from various emission sources. NiSource will continue to closely monitor developments in these matters.

Climate Change. Future legislative and regulatory programs could significantly restrict emissions of GHGs or could impose a cost or tax on GHG emissions. Recently, proposals have been developed to implement Federal, state and regional GHG programs and to create renewable energy standards.

In the first quarter of 2012, EPA proposed an output-based carbon standard for new power plants. The standard would, for the first time, set national limits on the amount of carbon emissions allowed from new power plants. This numerical limit places compliance out of reach for coal-fired plants designed without capture and sequestration of carbon dioxide, limiting NiSource's options for future generation growth. In addition, based on authority provided by the Clean Air Act, once the EPA has promulgated a New Source Performance Standard for a new or modified source in a specific source category, regulation of existing sources in specific circumstances is required.

If the EPA develops a GHG new source performance standard for existing units or if a Federal or state comprehensive climate change bill were to be enacted into law, the impact on NiSource's financial performance would depend on a number of factors, including the overall level of required GHG reductions, the renewable energy targets, the degree to which offsets may be used for compliance, the amount of recovery allowed from customers, and the extent to which NiSource would be entitled to receive CO2 allowances at no cost. Comprehensive Federal or state GHG regulation could result in additional expense or compliance costs that may not be fully recoverable from customers and could materially impact NiSource's financial results.

National Ambient Air Quality Standards. The CAA requires EPA to set national air quality standards for particulate matter and five other pollutants (the NAAQS) considered harmful to public health and the environment. Periodically EPA imposes new or modifies existing NAAQS. States that contain areas that do not meet the new or revised standards must take steps to maintain or achieve compliance with the standards. These steps could include additional pollution controls on boilers, engines, turbines, and other facilities owned by electric generation, gas distribution, and gas transmission operations.

The following NAAQS were recently added or modified:

Particulate Matter: In 2006, the EPA issued revisions to the NAAQS for particulate matter. The final rule (1) increased the stringency of the current fine particulate (PM2.5) standard, (2) added a new standard for inhalable coarse particulate (particulate matter between 10 and 2.5 microns in diameter), and (3) revoked the annual standards for coarse particulate (PM10) while retaining the 24-hour PM10 standards. These actions were challenged in a case before the DC Court of Appeals, American Farm Bureau Federation et al. v. EPA. In 2009, the appeals court granted portions of the plaintiffs' petitions challenging the fine particulate standards but denied portions of the petitions challenging the standards for coarse particulate. State plans implementing the new standard for inhalable coarse particulate and the modified 24-hour standard for fine particulate are expected in 2012. The annual and secondary PM2.5 standards have been remanded to the EPA for reconsideration. Northern Indiana will continue to monitor this matter and cannot estimate the impact of any new rules at this time.

Ozone (eight hour): On September 2, 2011, the EPA announced it would implement its 2008 eight-hour ozone NAAQS rather than tightening the standard in 2012. The EPA will review, and possibly revise, the standard in 2013 consistent with CAA requirements. In addition, the EPA has proposed to re-designate the Chicago metropolitan area, including the areas in which Northern Indiana operates three of its electric generation facilities, as non-attainment for ozone. Northern Indiana will continue to monitor this matter and cannot estimate the impact of any new rules at this time.

Nitrogen Dioxide (NO2): The EPA revised the NO2 NAAQS by adding a one-hour standard while retaining the annual standard. The new standard could impact some NiSource combustion sources. EPA will designate areas that do not meet the new standard beginning in 2012. States with areas that do not meet the standard will need to develop rules to bring areas into compliance within five years of designation. Additionally, under certain permitting circumstances emissions from some existing NiSource combustion sources may need to be assessed and compared to the revised NO2 standards before areas are designated. Petitions challenging the rule have been filed by various parties. NiSource will continue to monitor this matter and cannot estimate the impact of these rules at this time.

National Emission Standard for Hazardous Air Pollutants. On August 20, 2010, the EPA revised national emission standards for hazardous air pollutants for certain stationary reciprocating internal combustion engines. Compliance requirements vary by engine type and will generally be required within three years. NiSource is continuing its evaluation of the cost impacts of the final rule and estimates the cost of compliance to be $20 - $25 million.

Waste

NiSource subsidiaries are potentially responsible parties at waste disposal sites under the CERCLA (commonly known as Superfund) and similar state laws. Additionally, a program has been instituted to identify and investigate former MGP sites where Gas Distribution Operations subsidiaries or predecessors may have liability. The program has identified 67 such sites where liability is probable. Remedial actions at many of these sites are being overseen by state or federal environmental agencies through consent agreements or voluntary remediation agreements.

During the fourth quarter of 2011, NiSource completed a probabilistic model to estimate its future remediation costs related to its MGP sites. The model was prepared by a third party and incorporates NiSource and general industry experience with remediating MGP sites. NiSource accordingly increased its liability for estimated remediation costs by $71.1 million. Since the fourth quarter of 2011, NiSource has monitored the liability on a quarterly basis and in the second quarter of 2012, completed an annual refresh of the model. No material changes to the liability were noted as a result of the refresh. The total liability at NiSource related to the facilities subject to remediation was $136.1million and $139.5 million at June 30, 2012 and December 31, 2011, respectively. The liability represents NiSource's best estimate of the probable cost to remediate the facilities. NiSource believes that it is reasonably possible that remediation costs could vary by as much as $25 million in addition to the costs noted above. Remediation costs are estimated based on the best available information, applicable remediation standards at the balance sheet date, and experience with similar facilities.

Additional Issues Related to Individual Business Segments

The sections below describe various regulatory actions that affect Gas Transmission and Storage Operations, Electric Operations, and certain other discontinued operations for which NiSource has retained a liability.

Gas Transmission and Storage Operations.

Waste

Columbia Transmission continues to conduct characterization and remediation activities at specific sites under a 1995 AOC (subsequently modified in 1996 and 2007). The 1995 AOC originally covered 245 major facilities, approximately 13,000 liquid removal points, approximately 2,200 mercury measurement stations and about 3,700 storage well locations. As a result of the 2007 amendment, approximately 50 facilities remain subject to the terms of the AOC. During the third quarter of 2011, Columbia Transmission completed a study to estimate its future remediation requirements related to the AOC. Columbia Transmission accordingly increased its liability for estimated remediation costs by $25.6 million. Since the third quarter of 2011, Columbia Transmission has been monitoring its liability on a quarterly basis and performed an annual refresh of the study during the second quarter of 2012. An additional $3.5 million was added to the liability due to estimate changes and cost increases as a result of the refresh.The total liability at Columbia Transmission related to the facilities subject to remediation was $28.4million and $30.0 million at June 30, 2012 and December 31, 2011, respectively. The liability represents Columbia Transmission's best estimate of the cost to remediate the facilities or manage the site until retirement. Remediation costs are estimated based on the information available, applicable remediation standards, and experience with similar facilities. Columbia Transmission expects that the remediation for these facilities will be completed in 2015.

One of the facilities subject to the 1995 AOC is the MajorsvilleOperationsCenter, which was remediated under an EPA approved Remedial Action Work Plan in summer 2008. Pursuant to the Remedial Action Work Plan, Columbia Transmission completed a project that stabilized residual oil contained in soils at the site and in sediments in an adjacent stream. Columbia Transmission continues to monitor the site subject to EPA oversight. On April 23, 2009, PADEP issued an NOV to Columbia Transmission, alleging that the remediation did not fully address the contamination. The NOV asserts violations of the Pennsylvania Clean Streams Law and the Pennsylvania Solid Waste Management Act and includes a proposed penalty of $1 million. Columbia Transmission is unable to estimate the likelihood or cost of potential penalties or additional remediation at this time.

Electric Operations.

Air

Northern Indiana expects to become subject to a number of new air-quality mandates in the next several years. These mandates may require Northern Indiana to make capital improvements to its electric generating stations. The cost of capital improvements is estimated to be $925 million to $1.05billion. This figure includes additional capital improvements associated with the New Source Review Consent Decree, CSAPR and the Utility Mercury and Air Toxics Standards Rule. Northern Indiana believes that the capital costs will likely be recoverable from ratepayers.

Sulfur dioxide:On December 8, 2009,the EPA revised the SO2 NAAQS by adopting a new 1-hour primary NAAQS for SO2. EPA expects to designate areas that do not meet the new standard by mid-2012. States with such areas would have until 2014 to develop attainment plans with compliance required by 2017. Northern Indiana will continue to monitor developments in these matters but does not anticipate a material impact.

Cross-State Air Pollution Rule / Clean Air Interstate Rule (CAIR) / Transport Rule: On July 6, 2011, the EPA announced its replacement for the 2005 CAIR to reduce the interstate transport of fine particulate matter and ozone. The CSAPR reduces overall emissions of SO2 and NOx by setting state-wide caps on power plant emissions. The CSAPR limits emissions, including Northern Indiana's, with restricted emission allowance trading programs scheduled to begin in 2012. In a decision issued on December 30, 2011, the D.C. Circuit Court stayed the CSAPR and reinstated the CAIR trading program provisions and requirements, including reissuing CAIR emission allowances, pending resolution of the stay. This development does not significantly impact Northern Indiana's current emissions control plans. Northern Indiana utilizes the inventory model in accounting for emission allowances issued under the CAIR program whereby these allowances were recognized at zero cost upon receipt from the EPA. Northern Indiana believes its current multi-pollutant compliance plan and New Source Review Consent Decree capital investments will allow Northern Indiana to meet the emission requirements of CSAPR whenever final resolution of the appeal is reached.

Utility Mercury and Air Toxics Standards Rule:On February 8, 2008, the United States Court of Appeals for the District of Columbia Circuit vacated two EPA rules that are the basis for the Indiana Air Pollution Control Board's Clean Air Mercury Rule (CAMR) that established utility mercury emission limits in two phases (2010 and 2018) and a cap-and-trade program to meet those limits. In response to the vacatur, the EPA pursued a new Section 112 rulemaking to establish MACT standards for electric utilities. The EPA finalized the Mercury and Air Toxics Standards (MATS) Rule on December 16, 2011. Compliance for Northern Indiana's affected units will be required in early 2015, with the possibility of a one year extension. Northern Indiana is currently developing a plan for further environmental controls to comply with MATS.

New Source Review: On September 29, 2004, the EPA issued an NOV to Northern Indiana for alleged violations of the CAA and the Indiana SIP. The NOV alleged that modifications were made to certain boiler units at three of Northern Indiana's generating stations between the years 1985 and 1995 without obtaining appropriate air permits for the modifications. Northern Indiana, EPA, the Department of Justice, and IDEM have settled the matter through a consent decree.

Water

The Phase II Rule of the Clean Water Act Section 316(b), which requires all large existing steam electric generating stations to meet certain performance standards to reduce the effects on aquatic organisms at their cooling water intake structures, became effective on September 7, 2004.  Under this rule, stations will either have to demonstrate that the performance of their existing fish protection systems meet the new standards or develop new systems, such as a closed-cycle cooling tower.  Various court challenges and EPA responses ensued. The EPA announced a proposed rule and is obligated to finalize a rule in 2013. Northern Indiana will continue to monitor this matter but cannot estimate the cost of compliance at this time.

Waste

On March 31, 2005, the EPA and Northern Indiana entered into an AOC under the authority of Section 3008(h) of the RCRA for the Bailly Station. The order requires Northern Indiana to identify the nature and extent of releases of hazardous waste and hazardous constituents from the facility. Northern Indiana must also remediate any release of hazardous constituents that present an unacceptable risk to human health or the environment. The process to complete investigation and select appropriate remediation activities is ongoing.

On June 21, 2010, EPA published a proposed rule for CCRs through the RCRA. The proposal outlines multiple regulatory approaches that EPA is considering. These proposed regulations could negatively affect Northern Indiana's ongoing byproduct reuse programs and would impose additional requirements on its management of coal combustion residuals. Northern Indiana will continue to monitor developments in this matter and cannot estimate the cost of compliance at this time.

Other Operations.

Waste

NiSource affiliates have retained environmental liabilities, including cleanup liabilities associated with some of its former operations. Four sites are associated with its former propane operations and ten sites associated with former petroleum operations. At one of those sites, an AOC has been signed with EPA to address petroleum residue in soil and groundwater.

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Share-Based Compensation

6 Months Ended

Jun. 30, 2012

Share-Based Compensation [Abstract]

Share-Based Compensation

18.       Share-Based Compensation

The stockholders approved and adopted the NiSource Inc. 2010 Omnibus Incentive Plan (the “Omnibus Plan”), at the Annual Meeting of Stockholders held on May 11, 2010. The Omnibus Plan provides for awards to employees and non-employee directors of incentive and nonqualified stock options, stock appreciation rights, restricted stock and restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards. The Omnibus Plan provides that the number of shares of common stock of NiSource available for awards is 8,000,000 plus the number of shares subject to outstanding awards granted under either the 1994 Plan or the Director Plan (described below) that expire or terminate for any reason. No further awards are permitted to be granted under the prior 1994 Plan or the Director Plan. At June 30, 2012, there were 7,396,657 shares reserved for future awards under the Omnibus Plan.

Prior to May 11, 2010, NiSource issued long-term equity incentive grants to key management employees under a long-term incentive plan approved by stockholders on April 13, 1994 (“1994 Plan”). The types of equity awards previously authorized under the 1994 Plan did not significantly differ from those permitted under the Omnibus Plan.

NiSource recognized stock-based employee compensation expense of $4.1million and $3.4million for the three months ended June 30, 2012, and 2011, respectively, as well as related tax benefits of $1.4million and $1.3million. For the six months ended June 30, 2012, and 2011, stock-based employee compensation expense of $7.3million and $6.4 million was recognized, respectively as well as related tax benefits of $2.5million and $2.3 million, respectively.

As of June 30,2012, the total remaining unrecognized compensation cost related to nonvested awards amounted to $23.8million, which will be amortized over the weighted-average remaining requisite service period of 2.1years.

Stock Options.As of June 30,2012, approximately 1.8million options were outstanding and exercisable with a weighted average strike price of $22.00. No options were granted during the six months ended June 30, 2012 and 2011. As of June 30, 2012, the aggregate intrinsic value for the options outstanding and exercisable was $5.0million. During the six months ended June 30, 2012 and 2011, cash received from the exercise of options was $21.8million and $0.3 million, respectively.

Restricted Awards.During the six months ended June 30, 2012,NiSource grantedrestricted stock units and shares of restricted stock of 180,816, subject to service conditions. The total grant date fair value of the shares of restricted stock and restricted stock units was $4.0million, based on the average market price of NiSource's common stock at the date of each grant less the present value of any dividends not received during the vesting period, which will be expensed, net of forfeitures, over the vesting period which is generally three years. If the employee terminates employment before the service conditions lapse due to (1) Retirement or Disability (as defined in the award agreement), or (2) death, the employment conditions will lapse with respect to a pro rata portion of the shares of restricted stock and restricted stock units on the date of termination. In the event of a Change-in-Control (as defined in the award agreement), all unvested shares of restricted stock and restricted stock units will immediately vest. Termination due to any other reason will result in all shares of restricted stock and restricted stock units awarded being forfeited effective on the employee's date of termination. As of June 30, 2012, 554,028nonvested shares (all of which are expected to vest) of restricted stock and restricted stock units were granted and outstanding.

Performance Shares.During the six months ended June 30, 2012, NiSource granted 749,601performance shares subject to performance conditions. The grant date fair-value of the awards was $15.5million, based on the average market price of NiSource's common stock at the date of each grant less the present value of dividends not received during the vesting period which will be expensed, net of forfeitures, over the three year requisite service period. The performance conditions are based on achievement of two non-GAAP financial measures: cumulative net operating earnings, that NiSource defines as income from continuing operations adjusted for certain items; and cumulative funds from operations that NiSource defines as net operating cash flows provided by continuing operations; and relative total shareholder return that NiSource defines as the annualized growth in the dividends and share price of a share of NiSource's common stock (calculated using a 20 trading day average of NiSource's closing price beginning December 31, 2011 and ending on December 31, 2014) compared to the total shareholder return performance of a predetermined peer group of companies. The service conditions lapse on January 30, 2015 when the shares vest provided the performance criteria are satisfied. In general, if the employee terminates employment before January 30, 2015 due to (1) Retirement or Disability (as defined in the award agreement), or (2) death, the employment conditions will lapse with respect to a pro rata portion of the performance shares payable at target on the date of termination provided the performance criteria are met. In the event of a Change-in-Control (as defined in the award agreement), all unvested performance shares will immediately vest. Termination due to any other reason will result in all performance shares awarded being forfeited effective on the employee's date of termination. As of June 30, 2012, 1,996,841nonvested performance shares were granted and outstanding.

Non-employee Director Awards. As of May 11, 2010, awards to non-employee directors may be made only under the Omnibus Plan. Currently, restricted stock units are granted annually to non-employee directors, subject to a non-employee director's election to defer receipt of such restricted stock unit award. The non-employee director's restricted stock units vest on the last day of the non-employee director's annual term corresponding to the year the restricted stock units were awarded subject to special pro-rata vesting rules in the event of Retirement or Disability (as defined in the award agreement), or death. The vested restricted stock units are payable as soon as practicable following vesting except as otherwise provided pursuant to the non-employee director's election to defer. As of June 30, 2012, 132,537restricted stock units are outstandingto non-employee directors under the Omnibus Plan.

Only restricted stock units remain outstanding under the prior plan for non-employee directors, the Amended and Restated Non-employee Director Stock Incentive Plan (the “Director Plan”). All such awards are fully vested and shall be distributed to the directors upon their separation from the Board. As of June 30, 2012, 240,180 restricted stock units remain outstanding under the Director Plan and as noted above no further shares may be awarded under the Director Plan.

401(k) Match,Profit Sharing and Company Contribution. NiSource has a voluntary 401(k) savings plan covering eligible employees thatallows for periodic discretionary matches as a percentage of each participant'scontributions in newly issued shares of common stock. NiSource also has aretirement savings plan that provides for discretionary profit sharing contributions of shares of common stock to eligible employees based on earnings results; and eligible exempt employees hired after January 1, 2010, receive a non-elective company contribution of three percent of eligible pay in shares of common stock. For the quarter ended June 30, 2012 and 2011, NiSource recognized 401(k) match, profit sharing and non-elective contribution expense of $6.9million and $5.2 million, respectively. For the six months ended June 30, 2012 and 2011, NiSource recognized 401(k) match, profit sharing and non-elective contribution expense of $12.7million and $9.1million, respectively.

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Condensed Financial Information Of Registrant (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012
Guarantees	$ 7,937.3

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Forward Equity Agreement Narative (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended	6 Months Ended
	Sep. 14, 2010	Jun. 30, 2012
Forward Equity Agreement [Abstract]
Number of common shares covered by forward agreements	24,265,000
Initial forward sale price	$ 15.9638
Forward sale price		$ 14.2288
Cash received through forward contract if settled		$ 345.3

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Loss [Abstract]

Components Of Accumulated Other Comprehensive Loss

(in millions)			June 30, 2012		December 31, 2011
Other comprehensive income (loss), before tax:
	Unrealized gains on securities		$	3.7	$	8.0
		Tax expense on unrealized gains on securities		(1.3)		(3.1)
	Unrealized losses on cash flow hedges			(49.2)		(52.3)
		Tax benefit on unrealized losses on cash flow hedges		19.3		20.5
	Unrecognized pension and OPEB costs			(50.9)		(53.0)
		Tax benefit on unrecognized pension and OPEB costs		19.4		20.2
Total Accumulated Other Comprehensive Loss, net of taxes			$	(59.0)	$	(59.7)

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Loss [Abstract]

Accumulated Other Comprehensive Loss

20.       Accumulated Other Comprehensive Loss

The following table displays the components of Accumulated Other Comprehensive Loss.

(in millions)			June 30, 2012		December 31, 2011
Other comprehensive income (loss), before tax:
	Unrealized gains on securities		$	3.7	$	8.0
		Tax expense on unrealized gains on securities		(1.3)		(3.1)
	Unrealized losses on cash flow hedges			(49.2)		(52.3)
		Tax benefit on unrealized losses on cash flow hedges		19.3		20.5
	Unrecognized pension and OPEB costs			(50.9)		(53.0)
		Tax benefit on unrecognized pension and OPEB costs		19.4		20.2
Total Accumulated Other Comprehensive Loss, net of taxes			$	(59.0)	$	(59.7)

Equity Investment

As an equity method investment, NiSource is required to recognize a proportional share of Millennium's OCI. The remaining unrealized loss at June 30, 2012 of $19.2million, net of tax, related to terminated interest rate swaps is being amortized over the period ending June 2025 into earnings using the effective interest method through interest expense as interest payments are made by Millennium. The unrealized loss of$19.2million and $19.7 million atJune 30, 2012 and December 31, 2011, respectively, is included in unrealizedlosses on cash flow hedges above.

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Segments Of Business

6 Months Ended

Jun. 30, 2012

Segments Of Business [Abstract]

Segments Of Business

21.       Business Segment Information

Operating segments are components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. The NiSource Chief Executive Officer is the chief operating decision maker.

At June 30, 2012, NiSource's operations are divided into three primary business segments. The Gas Distribution Operations segment provides natural gas service and transportation for residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana and Massachusetts. The Gas Transmission and Storage Operations segment offers gas transportation and storage services for LDCs, marketers and industrial and commercial customers located in northeastern, mid-Atlantic, midwestern and southern states. The Electric Operations segment provides electric service in 20 counties in the northern part of Indiana.

The following table provides information about business segments. NiSource uses operating income as its primary measurement for each of the reported segments and makes decisions on finance, dividends and taxes at the corporate level on a consolidated basis. Segment revenues include intersegment sales to affiliated subsidiaries, which are eliminated in consolidation. Affiliated sales are recognized on the basis of prevailing market, regulated prices or at levels provided for under contractual agreements. Operating income is derived from revenues and expenses directly associated with each segment.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2012		2011		2012		2011
REVENUES
Gas Distribution Operations
Unaffiliated (1)	$	452.2	$	629.7	$	1,521.3	$	2,214.5
Intersegment		0.1		0.2		0.3		0.9
Total		452.3		629.9		1,521.6		2,215.4
Gas Transmission and Storage Operations
Unaffiliated		209.5		200.5		442.5		413.9
Intersegment		31.5		33.0		73.9		75.0
Total		241.0		233.5		516.4		488.9
Electric Operations
Unaffiliated		378.7		350.8		733.1		699.0
Intersegment		0.2		0.2		0.4		0.4
Total		378.9		351.0		733.5		699.4
Corporate and Other
Unaffiliated (2)		8.3		47.3		10.5		132.5
Intersegment		115.3		122.2		226.0		232.7
Total		123.6		169.5		236.5		365.2
Eliminations		(147.1)		(155.6)		(300.6)		(309.0)
Consolidated Revenues	$	1,048.7	$	1,228.3	$	2,707.4	$	3,459.9
Operating Income (Loss)
Gas Distribution Operations	$	46.9	$	46.6	$	258.9	$	288.1
Gas Transmission and Storage Operations		91.5		84.6		230.1		203.0
Electric Operations		70.4		40.3		116.6		90.9
Corporate and Other		(0.2)		(6.0)		2.4		(10.1)
Consolidated Operating Income	$	208.6	$	165.5	$	608.0	$	571.9
(1)With the implementation of the standard choice offer, Columbia of Ohio reported lower gross revenues and cost of sales beginning April 1, 2012. There was no impact on net revenues.
(2)The reduction to other revenues is attributed to the continued wind down of the unregulated natural gas marketing business as well as the early termination of certain contracts as discussed in Note 9, "Risk Management Activities." There was a corresponding decrease in cost of sales with no impact to operating income.

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Statements Of Consolidated Long-Term Debt (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Long-Term Notes	$ 7,573.8	$ 6,594.4
Total long-term debt, excluding amount due within one year	$ 6,806.9	$ 6,267.1

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Supplemental Cash Flow

6 Months Ended

Jun. 30, 2012

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

22.       Supplemental Cash Flow Information

The following table provides additional information regarding NiSource's Condensed Statements of Consolidated Cash Flows (unaudited) for the six months endedJune 30,2012 and 2011:

Six Months Ended June 30, (in millions)		2012		2011
Supplemental Disclosures of Cash Flow Information
Non-cash transactions:
	Capital expenditures included in current liabilities	$	105.6	$	65.1
	Stock issuance to employee saving plans		12.4		10.8
Schedule of interest and income taxes paid:
	Cash paid for interest, net of interest capitalized amounts	$	197.2	$	180.0
	Cash paid for income taxes		7.0		4.7

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Pension And Other Postretirement Benefits (Components Of The Plans' Net Periodic Benefits Cost) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 9.4	$ 9.4	$ 18.8	$ 18.8
Interest cost	28.2	29.9	56.4	59.8
Expected return on assets	(41.1)	(41.8)	(82.2)	(83.6)
Amortization of transition obligation	0	0	0	0
Amortization of prior service cost	0.1	0.1	0.2	0.2
Recognized actuarial loss	20.3	13.9	40.6	27.8
Total Net Periodic Benefits Cost	16.9	11.5	33.8	23.0
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	2.8	2.5	5.6	5.0
Interest cost	9.3	9.6	18.6	19.2
Expected return on assets	(6.7)	(6.7)	(13.4)	(13.4)
Amortization of transition obligation	0.3	0.3	0.6	0.6
Amortization of prior service cost	(0.1)	(0.1)	(0.2)	(0.2)
Recognized actuarial loss	2.4	1.7	4.8	3.4
Total Net Periodic Benefits Cost	$ 8.0	$ 7.3	$ 16.0	$ 14.6

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Transfers Of Financial Assets (Tables)

6 Months Ended

Jun. 30, 2012

Transfers Of Financial Assets [Abstract]

Schedule Of Gross And Net Receivables Transferred As Well As Short-Term Borrowings Related To The Securitization Transactions

(in millions)	June 30, 2012		December 31, 2011
Gross Receivables	$	335.6	$	510.5
Less: Receivables not transferred		142.4		278.8
Net receivables transferred	$	193.2	$	231.7
Short-term debt due to asset securitization	$	193.2	$	231.7

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Nature Of Operations And Summary Of Significant Accounting Policies (Computation Of Diluted Average Common Shares) (Details) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Basis Of Accounting Presentation [Abstract]
Basic average common shares outstanding	284,370	280,217	283,648	279,780
Nonqualified stock options	201	0	157	0
Shares contingently issuable under employee stock plans	284	1,078	270	1,061
Shares restricted under stock plans	620	342	607	326
Forward Agreements	10,292	5,422	9,921	4,989
Diluted Average Common Shares (millions)	295,767	287,059	294,603	286,156

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Fair Value Disclosures (Reconciliation Of Level 3 Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) (Other Derivatives [Member], USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Other Derivatives [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Beginning balance	$ 0.1	$ (0.1)	$ 0.3	$ 0.2
Total gains (losses) (unrealized/realized) Included in regulatory assets/liabilities	(0.4)	(0.6)	(0.6)	(1.0)
Purchases		(0.5)	0	(1.0)
Settlements		0.4	0	1.0
Ending balance	(0.3)	(0.8)	(0.3)	(0.8)
Change in unrealized gains/(losses) relating to instruments still held	$ 0	$ 1.5	$ 0	$ 1.5

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Statements Of Consolidated Income (USD $) In Millions, except Share data in Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net Revenues
Gas Distribution	$ 282.6	$ 500.4	$ 1,156.3	$ 1,872.4
Gas Transportation and Storage	356.2	307.3	765.4	710.3
Electric	377.1	349.2	729.7	695.7
Other	32.8	71.4	56.0	181.5
Gross Revenues	1,048.7	1,228.3	2,707.4	3,459.9
Cost of Sales (excluding depreciation and amortization)	241.1	462.5	871.4	1,633.4
Total Net Revenues	807.6	765.8	1,836.0	1,826.5
Operating Expenses
Operation and maintenance	394.3	400.3	799.7	829.6
Depreciation and amortization	148.0	134.5	294.1	268.8
Impairment and (gain)/loss on sale of assets, net	(1.5)	0	(3.1)	0.7
Other taxes	66.7	67.8	153.5	160.8
Total Operating Expenses	607.5	602.6	1,244.2	1,259.9
Equity Earnings in Unconsolidated Affiliates	8.5	2.3	16.2	5.3
Operating Income	208.6	165.5	608.0	571.9
Other Income (Deductions)
Interest expense, net	(103.2)	(94.4)	(206.5)	(184.2)
Other, net	2.8	0.6	3.1	3.9
Loss on early extinguishment of long-term debt			0	0
Total Other Deductions	(100.4)	(93.8)	(203.4)	(180.3)
Income from Continuing Operations before Income Taxes	108.2	71.7	404.6	391.6
Income Taxes	37.7	30.9	140.6	141.7
Income from Continuing Operations	70.5	40.8	264.0	249.9
Loss from Discontinued Operations - net of taxes	(1.1)	(0.6)	(1.2)	(0.2)
Gain (loss) on Disposition of discontinued operations-net of taxes	0	0	0	0
Net Income	$ 69.4	$ 40.2	$ 262.8	$ 249.7
Basic Earnings (Loss) Per Share ($)
Continuing Operations	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Discontinued operations	$ 0	$ 0	$ 0	$ 0
Basic Earnings Per Share	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Diluted Earnings (Loss) Per Share ($)
Continuing operations	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Discontinued operations	$ 0	$ 0	$ 0	$ 0
Diluted Earnings Per Share	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Dividends Declared Per Common Share	$ 0.24	$ 0.23	$ 0.70	$ 0.69
Basic Average Common Shares Outstanding (millions)	284,370	280,217	283,648	279,780
Diluted Average Common Shares (millions)	295,767	287,059	294,603	286,156

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Segments Of Business (Tables)

6 Months Ended

Jun. 30, 2012

Segments Of Business [Abstract]

Schedule Of Operating Income Derived From Revenues And Expenses By Segment

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2012		2011		2012		2011
REVENUES
Gas Distribution Operations
Unaffiliated (1)	$	452.2	$	629.7	$	1,521.3	$	2,214.5
Intersegment		0.1		0.2		0.3		0.9
Total		452.3		629.9		1,521.6		2,215.4
Gas Transmission and Storage Operations
Unaffiliated		209.5		200.5		442.5		413.9
Intersegment		31.5		33.0		73.9		75.0
Total		241.0		233.5		516.4		488.9
Electric Operations
Unaffiliated		378.7		350.8		733.1		699.0
Intersegment		0.2		0.2		0.4		0.4
Total		378.9		351.0		733.5		699.4
Corporate and Other
Unaffiliated (2)		8.3		47.3		10.5		132.5
Intersegment		115.3		122.2		226.0		232.7
Total		123.6		169.5		236.5		365.2
Eliminations		(147.1)		(155.6)		(300.6)		(309.0)
Consolidated Revenues	$	1,048.7	$	1,228.3	$	2,707.4	$	3,459.9
Operating Income (Loss)
Gas Distribution Operations	$	46.9	$	46.6	$	258.9	$	288.1
Gas Transmission and Storage Operations		91.5		84.6		230.1		203.0
Electric Operations		70.4		40.3		116.6		90.9
Corporate and Other		(0.2)		(6.0)		2.4		(10.1)
Consolidated Operating Income	$	208.6	$	165.5	$	608.0	$	571.9
(1)With the implementation of the standard choice offer, Columbia of Ohio reported lower gross revenues and cost of sales beginning April 1, 2012. There was no impact on net revenues.
(2)The reduction to other revenues is attributed to the continued wind down of the unregulated natural gas marketing business as well as the early termination of certain contracts as discussed in Note 9, "Risk Management Activities." There was a corresponding decrease in cost of sales with no impact to operating income.

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Accumulated Other Comprehensive Loss (Components Of Accumulated Other Comprehensive Loss) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2011	Dec. 31, 2011	Jun. 30, 2012
Accumulated Other Comprehensive Loss [Abstract]
Unrealized gains on securities	$ 3.7	$ 8.0
Tax expense on unrealized gains on securities	(1.3)	(3.1)
Unrealized losses on cash flow hedges	(49.2)	(52.3)
Tax benefit on unrealized losses on cash flow hedges	19.3	20.5
Unrecognized pension benefit and OPEB costs	(50.9)	(53.0)
Tax benefit on unrecognized pension benefit and OPEB costs	19.4	20.2
Total Accumulated Other Comprehensive Loss, net of taxes	$ (59.0)	$ (59.7)	$ (59.0)

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Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Consolidated Balance Sheets [Abstract]
Accounts receivable less reserve	$ 42.2	$ 30.5
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	284,767,362	281,853,571
Common stock, shares outstanding	284,767,362	281,853,571

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Other Commitments And Contingencies (Existence And Expiration Of Commercial Commitments) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012
Other Commitments And Contingencies [Line Items]
2012	$ 748.5
2013	666.1
2014	533.7
2015	563.0
2016	291.6
After	5,134.4
Total	7,937.3
Guarantees Of Subsidiaries Debt [Member]
Other Commitments And Contingencies [Line Items]
2012	315.0
2013	420.3
2014	500.0
2015	480.0
2016	291.6
After	5,114.0
Total	7,120.9
Guarantees Supporting Energy Commodity Transactions Of Subsidiaries [Member]
Other Commitments And Contingencies [Line Items]
2012	44.5
2013	14.0
2014	0.5
2015	80.0
2016	0
After	1.9
Total	140.9
Accounts Receivable Securitization [Member]
Other Commitments And Contingencies [Line Items]
2012	193.2
2013	0
2014	0
2015	0
2016	0
After	0
Total	193.2
Lines Of Credit [Member]
Other Commitments And Contingencies [Line Items]
2012	134.4
2013	0
2014	0
2015	0
2016	0
After	0
Total	134.4
Letters Of Credit [Member]
Other Commitments And Contingencies [Line Items]
2012	28.4
2013	8.1
2014	1.0
2015	0
2016	0
After	0
Total	37.5
Other Guarantees [Member]
Other Commitments And Contingencies [Line Items]
2012	33.0
2013	223.7
2014	32.2
2015	3.0
2016	0
After	18.5
Total	$ 310.4

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Discontinued Operations And Assets And Liabilities Held For Sale (Summary Of Gain (Loss) On Disposition Of Discontinued Operations Net Of Taxes) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Discontinued Operations And Assets And Liabilities Held For Sale [Abstract]
Revenues from Discontinued Operations	$ 0	$ 0	$ 0	$ 0
Loss from discontinued operations	(1.7)	(0.8)	(1.9)	(0.2)
Income tax benefit	(0.6)	(0.2)	(0.7)	0
Loss from Discontinued Operations - net of taxes	(1.1)	(0.6)	(1.2)	(0.2)
Gain (Loss) on Disposition of Discontinued Operations - net of taxes	$ 0	$ 0	$ 0	$ 0

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Supplemental Cash Flow Information (Additional Information Regarding Condensed Statements Of Consolidated Cash Flows) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Supplemental Cash Flow Information [Abstract]
Capital expenditures included in current liabilities	$ 105.6	$ 65.1
Stock issuance to employee saving plans	12.4	10.8
Cash paid for interest, net of interest capitalized amounts	197.2	180.0
Cash paid for income taxes	$ 7.0	$ 4.7

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Computation Of Diluted Average Common Shares

			Three Months Ended		Six Months Ended
			June 30,		June 30,
(in thousands)			2012	2011	2012	2011
Denominator
	Basic average common shares outstanding		284,370	280,217	283,648	279,780
	Dilutive potential common shares
		Stock options	201	-	157	-
		Shares contingently issuable under employee stock plans	284	1,078	270	1,061
		Shares restricted under stock plans	620	342	607	326
		Forward Agreements	10,292	5,422	9,921	4,989
Diluted Average Common Shares			295,767	287,059	294,603	286,156

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Risk Management And Energy Marketing Activities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended		6 Months Ended	12 Months Ended			6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended			3 Months Ended
	Sep. 16, 2005	Jul. 22, 2003	Jun. 30, 2012	Dec. 31, 2011	Apr. 05, 2012	Nov. 03, 2011	Jun. 30, 2012 Physical Sales Contracts Marked-To-Market [Member]	Dec. 31, 2011 Physical Sales Contracts Marked-To-Market [Member]	Jun. 30, 2012 Financial Derivative Contracts Marked To Market [Member]	Dec. 31, 2011 Financial Derivative Contracts Marked To Market [Member]	Sep. 16, 2005 5.25% - Due September 15, 2017 [Member]	Sep. 16, 2005 5.45% - Due September 15, 2020 [Member]	Jun. 30, 2012 Millennium Pipeline Company, L.L.C [Member]	Nov. 03, 2011 MF Global [Member]	Nov. 03, 2011 Court Designated Replacement Broker [Member]	Jun. 30, 2012 Unregulated Natural Gas Business [Member]
Derivative Instruments Gain Loss [Line Items]
Reserves against physical sale contract derivatives			$ 1.6	$ 25.6
Fair value of physical sales contracts and derivative contracts							55.4	136.8	52.9	155.5
Valuation reserve				22.6
Contract settlement, start date			Nov. 01, 2011
Contract settlement, end date			Feb. 01, 2014
Mark-to-market loss						46.4
Initial margin to open accounts for mark-to-market losses														6.9
Initial margin on deposit transferred to court-designated replacement broker															5.7
Commodity contracts value			53.3
Loss contingency, value			1.2
Outstanding debt			7.3
Outstanding debt subject to interest rate fluctuations			500.0
Notional amount of interest rate swap agreements	900.0	500.0
Number of counterparties in swap agreement		4
Interest rate swap agreements term, years		11Y
Fixed interest rate under swap agreement		5.40%
Floating interest amount, average interest addition		0.78%
Face amount of notes	1,000.0				250.0
Interest rate on debt											5.25%	5.45%
Debt instrument maturity date													Jun. 01, 2025
Effective interest rate of debt instrument											5.67%	5.68%
Number of counterparties in swap agreement settled	6
Payment for settlement of interest rate swap	35.5
Forward starting interest rate swap settlement amount			10.5
Percentage of interest in Millennium													47.50%
Unrealized loss on terminated interest rate swaps			19.2
Loss recognized in income statement classified in accumulated other comprehensive income(loss)			0.2
Contingent collateral requirement			1.9
Cash on deposit with brokers for margin requirements			81.4	158.2
Write Off Of Price Risk Asset Related With Wind Down Of Unregulated Natural Gas Business			43.8
Accounts and Notes Receivable, Net																$ 21.3

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Goodwill And Other Intangible Assets

6 Months Ended

Jun. 30, 2012

Goodwill And Other Intangible Assets [Abstract]

Goodwill And Other Intangible Assets

12.       Goodwill Assets

NiSource tests its goodwill for impairment annually unless indicators, events, or circumstances would require an immediate review. Goodwill is tested for impairment at a level of reporting referred to as a reporting unit, which generally is an operating segment or a component of an operating segment as defined by GAAP. In accordance with GAAP, certain components of an operating segment with similar economic characteristics are aggregated and deemed a single reporting unit. Goodwill is generally allocated to the reporting units based upon the amounts allocated at the time of their respective acquisition. The goodwill impairment test is a two-step process which requires NiSource to make estimates regarding the fair value of the reporting unit. The first step of the goodwill impairment test compares the fair value of the reporting unit with its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step of the impairment test is not required. However, if the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss (if any), which compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of reporting unit goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess.

During the second quarter of 2012, NiSource changed its method of applying an accounting principle whereby the annual impairment test of goodwill will be performed as of May 1st each year instead of June 30th,the previous testingdate. This change is preferable under the circumstances as it more closely aligns the impairment testing date with the long-range planning and forecasting process. The change also provides NiSource with additional time to complete the required testing and evaluate the results prior to the quarter-end closing and reporting activities when resources are more constrained. The change in the annual goodwill impairment testing date is not intended to nor does it delay, accelerate, or avoid an impairment charge. As it was impracticable to objectively determine projected cash flows and related valuation estimates as of each May 1 for periods prior to May 1, 2012, NiSource has prospectively applied the change in the annual goodwill impairment testing date from May 1, 2012.

NiSource has three reporting units that are allocated goodwill. NiSource's goodwill assets at June 30, 2012 were $3.7 billion pertaining primarily to the acquisition of Columbia on November 1, 2000. Of this amount, approximately $2.0 billion is allocated to Columbia Transmission Operations and $1.7 billion is allocated to Columbia Distribution Operations. In addition, Northern Indiana Gas Distribution Operations' goodwill assets at June 30, 2012 related to the purchase of Northern Indiana Fuel and Light in March 1993 and Kokomo Gas in February 1992 were $18.8 million.

In estimating the fair value of the Columbia Transmission Operations and Columbia Distribution Operations reporting units for the May 1, 2012 test, NiSource used a weighted average of the income and market approaches. The income approach utilized a discounted cash flow model. This model is based on management's short-term and long-term forecast of operating performance for each reporting unit. The two main assumptions used in the models are the growth rates, which are based on the cash flows from operations for each of the reporting units, and the weighted average cost of capital, or discount rate. The starting point for each reporting unit's cash flow from operations is the detailed five year plan, which takes into consideration a variety of factors such as the current economic environment, industry trends, and specific operating goals set by management. The discount rates are based on trends in overall market as well as industry specific variables and include components such as the risk-free rate, cost of debt, and company volatility at May 1, 2012. Under the market approach, NiSource utilized three market-based models to estimate the fair value of the reporting units: (i) the comparable company multiples method, which estimated fair value of each reporting unit by analyzing EBITDA multiples of a peer group of publicly traded companies and applying that multiple to the reporting unit's EBITDA, (ii) the comparable transactions method, which valued the reporting unit based on observed EBITDA multiples from completed transactions of peer companies and applying that multiple to the reporting unit's EBITDA, and (iii) the market capitalization method, which used the NiSource share price and allocated NiSource's total market capitalization among both the goodwill and non-goodwill reporting units based on the relative EBITDA, revenues, and operating income of each reporting unit. Each of the three market approaches were calculated with the assistance of a third party valuation firm, using multiples and assumptions inherent in today's market. The degree of judgment involved and reliability of inputs into each model were considered in weighting the various approaches. The resulting estimate of fair value of the reporting units, using the weighted average of the income and market approaches, exceeded their carrying values, indicating that no impairment exists under step 1 of the annual impairment test.

Certain key assumptions used in determining the fair values of the reporting units included planned operating results, discount rates and the long-term outlook for growth. NiSource used discount rates of 5.60% for both Columbia Transmission Operations and Columbia Distribution Operations, resulting in excess fair values of approximately $1,643 million and $1,682 million, respectively. The results of the impairment test indicated that each of the reporting units passed step 1 of the impairment test.

Goodwill at Northern Indiana Gas Distribution Operations related to the acquisition of Northern Indiana Fuel and Light and Kokomo Gas of $18.8 million was also tested for impairment as of May 1, 2012. The income approach was used to determine the fair value of the Northern Indiana Gas Distribution reporting unit. Key assumptions in the income approach were a discount rate of 5.60% and a growth rate based on the cash flow from operations. These cash flows factor in the regulatory environment and planned growth initiatives. The step 1 goodwill impairment test resulted in the fair value of the Northern Indiana Gas reporting unit to be above the carrying value by $356 million.

NiSource considered whether there were any events or changes in circumstances subsequent to the annual test that would reduce the fair value of any of the reporting units below their carrying amounts and necessitate another goodwill impairment test. No such indicators were noted that would require goodwill impairment testing subsequent to May 1, 2012.

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Discontinued Operations And Assets And Liabilities Held For Sale (Tables)

6 Months Ended

Jun. 30, 2012

Discontinued Operations And Assets And Liabilities Held For Sale [Abstract]

Summary Of Gain (Loss) On Disposition Of Discontinued Operations Net Of Taxes

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2012		2011		2012		2011
Loss from discontinued operations	$	(1.7)	$	(0.8)	$	(1.9)	$	(0.2)
Income tax benefit		(0.6)		(0.2)		(0.7)		-
Loss from Discontinued Operations - net of taxes	$	(1.1)	$	(0.6)	$	(1.2)	$	(0.2)

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Segments Of Business (Schedule Of Operating Income Derived From Revenues And Expenses By Segment) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011		Dec. 31, 2011
Segment Reporting Information [Line Items]
Consolidated Revenues	$ 1,048.7		$ 1,228.3		$ 2,707.4		$ 3,459.9
Consolidated Operating Income (Loss)	208.6		165.5		608.0		571.9
Consolidated Depreciation and Amortization	148.0		134.5		294.1		268.8
Consolidated Assets	20,409.4				20,409.4				20,708.3
Consolidated Capital Expenditures					619.5		445.0
Gas Transmission And Storage Operations [Member]
Segment Reporting Information [Line Items]
Unaffiliated	209.5		200.5		442.5		413.9
Intersegment	31.5		33.0		73.9		75.0
Consolidated Revenues	241.0		233.5		516.4		488.9
Consolidated Operating Income (Loss)	91.5		84.6		230.1		203.0
Electric Operations [Member]
Segment Reporting Information [Line Items]
Unaffiliated	378.7		350.8		733.1		699.0
Intersegment	0.2		0.2		0.4		0.4
Consolidated Revenues	378.9		351.0		733.5		699.4
Consolidated Operating Income (Loss)	70.4		40.3		116.6		90.9
Corporate And Other [Member]
Segment Reporting Information [Line Items]
Unaffiliated	8.3	[1]	47.3	[1]	10.5	[1]	132.5	[1]
Intersegment	115.3		122.2		226.0		232.7
Consolidated Revenues	123.6		169.5		236.5		365.2
Consolidated Operating Income (Loss)	(0.2)		(6.0)		2.4		(10.1)
Gas Distribution Operations [Member]
Segment Reporting Information [Line Items]
Unaffiliated	452.2	[2]	629.7	[2]	1,521.3	[2]	2,214.5	[2]
Intersegment	0.1		0.2		0.3		0.9
Consolidated Revenues	452.3		629.9		1,521.6		2,215.4
Consolidated Operating Income (Loss)	46.9		46.6		258.9		288.1
Eliminations [Member]
Segment Reporting Information [Line Items]
Consolidated Revenues	$ (147.1)		$ (155.6)		$ (300.6)		$ (309.0)

[1] The reduction to other revenues is attributed to the continued wind down of the unregulated natural gas marketing business as well as the early termination of certain contracts as discussed in Note 9, "Risk Management Activities." There was a corresponding decrease in cost of sales with no impact to operating income.

[2] With the implementation of the standard choice offer, Columbia of Ohio reported lower gross revenues and cost of sales beginning April 1, 2012. There was no impact on net revenues.

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Pension And Other Postretirement Benefits

6 Months Ended

Jun. 30, 2012

Pension And Other Postretirement Benefits [Abstract]

Pension And Other Postretirement Benefits

14.Pension and Other Postretirement Benefits

NiSource provides defined contribution plans and noncontributory defined benefit retirement plans that cover its employees. Benefits under the defined benefit retirement plans reflect the employees' compensation, years of service and age at retirement. Additionally, NiSource provides health care and life insurance benefits for certain retired employees. The majority of employees may become eligible for these benefits if they reach retirement age while working for NiSource. The expected cost of such benefits is accrued during the employees' years of service. Current rates of rate-regulated companies include postretirement benefit costs, including amortization of the regulatory assets that arose prior to inclusion of these costs in rates. For most plans, cash contributions are remitted to grantor trusts.

For the six months ended June 30, 2012, NiSource has contributed $1.6million to its pension plans and $23.3 million to its other postretirement benefit plans.

The following table provides the components of the plans' net periodic benefits cost for the ##D<GV_qytd_lc>June 30,2012 and 2011:

		Pension Benefits				Other Postretirement Benefits
Three Months Ended June 30, (in millions)		2012		2011		2012		2011
Components of Net Periodic Benefit Cost
	Service cost	$	9.4	$	9.4	$	2.8	$	2.5
	Interest cost		28.2		29.9		9.3		9.6
	Expected return on assets		(41.1)		(41.8)		(6.7)		(6.7)
	Amortization of transition obligation		-		-		0.3		0.3
	Amortization of prior service cost		0.1		0.1		(0.1)		(0.1)
	Recognized actuarial loss		20.3		13.9		2.4		1.7
Total Net Periodic Benefit Costs		$	16.9	$	11.5	$	8.0	$	7.3

		Pension Benefits				Other Postretirement Benefits
Six Months Ended June 30, (in millions)		2012		2011		2012		2011
Components of Net Periodic Benefit Cost
	Service cost	$	18.8	$	18.8	$	5.6	$	5.0
	Interest cost		56.4		59.8		18.6		19.2
	Expected return on assets		(82.2)		(83.6)		(13.4)		(13.4)
	Amortization of transition obligation		-		-		0.6		0.6
	Amortization of prior service cost		0.2		0.2		(0.2)		(0.2)
	Recognized actuarial loss		40.6		27.8		4.8		3.4
Total Net Periodic Benefit Costs		$	33.8	$	23.0	$	16.0	$	14.6

For the quarters ended June 30, 2012 and 2011, pension and other postretirement benefit cost of approximately $5.3million and $1.7million, respectively, was capitalized as a component of plant or recognized as a regulatory asset or liability consistent with regulatory orders for certain of NiSource's regulated businesses. For the six months ended June 30, 2012 and 2011, pension and other postretirement benefit cost of approximately $10.9 million and $8.8million, respectively, was capitalized as a component of plant or recognized as a regulatory asset or liability consistent with regulatory orders for certain of NiSource's regulated businesses.

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Risk Management And Energy Marketing Activities (The Effect Of Derivative Instruments Reclassified To Statements Of Consolidated Income) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Derivative Instruments Gain Loss [Line Items]
Losses recognized in income, deferred	$ 4.7	$ 3.4	$ 15.1	$ 19.3
Cash Flow Hedging [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain Recognized in OCI Derivative (Effective Portion)	0.7	0.4	1.4	1.3
Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	(0.9)	(0.5)	(2.1)	(0.5)
Amount of Gain Recognized in Income on Derivatives	0	0	0	0
Not Designated As Hedging Instruments [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain Recognized in Income on Derivatives	17.2	3.2	(5.2)	(11.2)
Commodity Price Risk Programs [Member] | Cash Flow Hedging [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain Recognized in OCI Derivative (Effective Portion)	0.3	0	0.6	0.5
Commodity Price Risk Programs [Member] | Gas Distribution Revenues [Member] | Not Designated As Hedging Instruments [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain Recognized in Income on Derivatives	(0.1)	(0.1)	0.3	(21.8)
Commodity Price Risk Programs [Member] | Cost Of Sales [Member] | Cash Flow Hedging [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	(0.2)	0.2	(0.8)	0.8
Amount of Gain Recognized in Income on Derivatives	0	0	0	0
Commodity Price Risk Programs [Member] | Cost Of Sales [Member] | Not Designated As Hedging Instruments [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain Recognized in Income on Derivatives	9.6	(4.5)	(11.5)	(7.8)
Commodity Price Risk Programs [Member] | Other Revenues [Member] | Not Designated As Hedging Instruments [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain Recognized in Income on Derivatives	7.7	7.8	6.0	18.4
Interest Rate Risk Activities [Member] | Cash Flow Hedging [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain Recognized in OCI Derivative (Effective Portion)	0.4	0.4	0.8	0.8
Interest Rate Risk Activities [Member] | Interest Expense [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain Recognized in Income on Derivatives		0
Interest Rate Risk Activities [Member] | Interest Expense [Member] | Fair Value Hedging [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain Recognized in Income on Derivatives	0.8	9.8	(8.2)	(0.4)
Amount of Gain Recognized in Income on Related Hedged Items		(9.8)
Interest Rate Risk Activities [Member] | Interest Expense [Member] | Cash Flow Hedging [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	(0.7)	(0.7)	(1.3)	(1.3)
Amount of Gain Recognized in Income on Derivatives	0		0	0
Fixed Rate Debt Hedges [Member] | Interest Expense [Member] | Fair Value Hedging [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain Recognized in Income on Related Hedged Items	$ (0.8)		$ 8.2	$ 0.4

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Common Stock (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended	6 Months Ended
	Sep. 14, 2010	Jun. 30, 2012	Dec. 31, 2011
Common Stock [Abstract]
Common stock, shares authorized		400,000,000	400,000,000
Common stock, par value		$ 0.01	$ 0.01
Number of common shares covered by forward agreements	24,265,000
Initial forward sale price	$ 15.9638
Forward sale price		$ 14.2288
Cash received through forward contract if settled		$ 345.3

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Statements Of Consolidated Cash Flows (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating Activities
Net Income	$ 262.8	$ 249.7
Adjustments to Reconcile Net Income to Net Cash from Continuing Operations:
Loss on early extinguishment of debt	0	0
Depreciation and amortization	294.1	268.8
Net changes in price risk management assets and liabilities	(20.1)	15.3
Deferred income taxes and investment tax credits	129.0	135.9
Deferred revenue	(0.1)	(2.6)
Stock compensation expense and 401(k) profit sharing contribution	19.7	17.2
Loss (Gain) on sale of assets	(3.1)	0
Loss on impairment of assets	0	0.7
Income from unconsolidated affiliates	(14.9)	(4.4)
(Gain) Loss on disposition of discontinued operations-net of taxes	0	0
Loss from discontinued operations-net of taxes	1.2	0.2
Amortization of discount/premium on debt	4.7	4.2
AFUDC equity	(3.0)	(1.9)
Distribution Received from Equity Earnings	17.2	9.9
Changes in Assets and Liabilities:
Accounts receivable	305.2	434.6
Income tax receivable	0.2	97.8
Inventories	133.6	13.7
Accounts payable	(147.5)	(250.4)
Customer deposits and credits	(111.7)	(134.9)
Taxes accrued	(34.8)	(41.2)
Interest accrued	4.7	0
Over (Under) recovered gas and fuel costs	54.1	221.3
Exchange gas receivable/payable	(44.7)	(166.2)
Other accruals	(92.8)	(26.3)
Prepayments and other current assets	35.2	20.6
Regulatory assets/liabilities	7.3	23.4
Postretirement and postemployment benefits	(12.6)	(118.9)
Deferred credits	8.5	6.3
Deferred charges and other noncurrent assets	(18.3)	12.1
Other noncurrent liabilities	(1.1)	(4.8)
Net Operating Activities from Continuing Operations	772.8	780.1
Net Operating Activities used for Discontinued Operations	(1.0)	(44.1)
Net Cash Flows from Operating Activities	771.8	736.0
Investing Activities
Capital expenditures	(619.5)	(445.0)
Insurance recoveries	0	0
Proceeds from disposition of assets	2.2	9.4
Restricted cash deposits (withdrawals)	75.9	48.3
Contributions to equity investees	(7.6)	(0.1)
Distributions from equity investees	0	0
Other investing activities	(19.9)	(36.0)
Net Cash Provided by (Used in) Investing Activities, Total	(568.9)	(423.4)
Financing Activities
Issuance of long-term debt	991.4	395.3
Retirement of long-term debt	(7.8)	(13.0)
Premium and other costs to retire debt	(3.4)	(8.2)
Change in short-term debt, net	(1,031.4)	(512.2)
Issuance of common stock	30.0	7.9
Acquisition of treasury stock	(10.0)	(3.0)
Dividends paid - common stock	(130.4)	(128.7)
Net Cash Flows from (used for) Financing Activities	(161.6)	(261.9)
Change in cash and cash equivalents from continuing operations	42.3	94.8
Cash contributions to discontinued operations	(1.0)	(44.1)
Cash and cash equivalents at beginning of period	11.5	9.2
Cash and Cash Equivalents at End of Period	$ 52.8	$ 59.9

XML

Statements of Consolidated Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Comprehensive Income (Loss):
Net Income	$ 69.4		$ 40.2		$ 262.8		$ 249.7
Net Loss On Available For Sale Securities	0.3	[1]	1.1	[1]	(2.5)	[1]	0.9	[1]
Net Unrealized Gains on Cash Flow Hedges	0.9	[2]	0.6	[2]	1.9	[2]	1.7	[2]
Unrecognized pension benefit and OPEB costs	0.7	[3]	0.4	[3]	1.3	[3]	0.8	[3]
Total Other Comprehensive (Loss) Income	1.9		2.1		0.7		3.4
Total comprehensive income	$ 71.3		$ 42.3		$ 263.5		$ 253.1

[1] Net unrealized gains (losses) on available-for-sale securities, net of $0.2 million and $0.7 million tax expense in the second quarter of 2012 and 2011, respectively, and $1.8 million tax benefit and $0.5 million tax expense for the first six months of 2012 and 2011, respectively.

[2] Net unrealized gains on derivatives qualifying as cash flow hedges, net of $0.6 million and $0.4 million tax expense in the second quarter of 2012 and 2011, respectively, and $1.2 million and $1.1 million tax expense for the first six months of 2012 and 2011, respectively. Net unrealized gains on cash flow hedges includes gains of $0.2 million related to the unrealized gains and losses of interest rate swaps held by NiSource’s unconsolidated equity method investments for the second quarter of 2012 and 2011. Net unrealized gains on cash flow hedges include gains of $0.5 million and $0.4 million related to the unrealized gains and losses of interest swaps held by NiSource's unconsolidated equity method investments for the six months ended June 30, 2012 and 2011, respectively.

[3] Unrecognized pension benefit and OPEB costs, net of $0.3 million tax expense in the second quarter of 2012 and 2011, and $0.8 million and $0.7 million tax expense for the first six months of 2012 and 2011, respectively.

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Asset Retirement Obligations

6 Months Ended

Jun. 30, 2012

Asset Retirement Obligations [Abstract]

Asset Retirement Obligations

7.       Asset Retirement Obligations

Certain costs of removal that have been, and continue to be, included in depreciation rates and collected in the service rates of the rate-regulated subsidiaries are classified as “Regulatory liabilities and other removal costs” on the Condensed Consolidated Balance Sheets (unaudited).

Changes in NiSource's liability for asset retirement obligations for thesix months ended June 30, 2012 and 2011 are presented in the table below:

(in millions)		2012		2011
Balance as of January 1,		$	146.4	$	138.8
	Accretion expense		0.5		0.3
	Accretion recorded as a regulatory asset/liability		4.3		3.8
	Settlements		(1.5)		(1.1)
	Change in estimated cash flows		-		(2.9)
Balance as of June 30,		$	149.7	$	138.9

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Condensed Financial Information Of Registrant (Statement Of Cash Flows) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Net cash provided by operating activities	$ 771.8	$ 736.0
Proceeds (loss) from disposition of assets	2.2	9.4
Net cash (used in) provided by investing activities	(568.9)	(423.4)
Issuance of common shares	30.0	7.9
Cash dividends paid on common shares	(130.4)	(128.7)
Acquisition of treasury stock	(10.0)	(3.0)
Net cash used in financing activities	(161.6)	(261.9)
Cash and cash equivalents at beginning of period	11.5	9.2
Cash and Cash Equivalents at End of Period	$ 52.8	$ 59.9

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Other Commitments And Contingencies (Narrative) (Details) (USD $) In Millions, unless otherwise specified						12 Months Ended							6 Months Ended	12 Months Ended					6 Months Ended				0 Months Ended	6 Months Ended
	Jun. 30, 2012	Apr. 05, 2012	Dec. 31, 2011	Sep. 16, 2005	Aug. 20, 2010 National Emission Standard For Hazardous Air Pollutants [Member]	Dec. 31, 2011 MGP Sites	Jun. 30, 2012 MGP Sites	Jun. 30, 2012 NiSource Finance [Member]	Dec. 31, 2011 NiSource Finance [Member]	Jun. 30, 2012 Whiting Clean Energy [Member]	Jun. 30, 2008 Whiting Clean Energy [Member]	Jun. 30, 2012 Millennium Pipeline Company, L.L.C [Member]	Jun. 30, 2012 Columbia Transmission [Member]	Dec. 31, 2011 Columbia Transmission [Member]	Jun. 30, 2012 Guarantees Of Subsidiaries Debt [Member]	Jun. 30, 2012 Guarantees Supporting Energy Commodity Transactions Of Subsidiaries [Member]	Jun. 30, 2012 Letters Of Credit [Member]	Jun. 30, 2012 Other Guarantees [Member]	Jun. 30, 2012 Maximum [Member] Northern Indiana [Member]	Jun. 30, 2012 Minimum [Member] Northern Indiana [Member]	Jun. 30, 2012 Letters Of Credit [Member]	Dec. 31, 2011 Letters Of Credit [Member]	Mar. 03, 2015 Four-Year Revolving Credit Facility [Member]	Jun. 30, 2012 Four-Year Revolving Credit Facility [Member]	Dec. 31, 2011 Four-Year Revolving Credit Facility [Member]	Mar. 03, 2011 Four-Year Revolving Credit Facility [Member]
Other Commitments And Contingencies [Line Items]
Guarantees	$ 7,937.3											$ 16.2			$ 7,120.9	$ 140.9	$ 37.5	$ 310.4
Revolving credit facility, maximum																										1,500
Termination date of credit facility																							May 15, 2017	May 15, 2017
Credit facilities borrowings	0		725.0																		37.5	37.5		19.2	19.2
Commercial paper	134.4		402.7					134.4
Accounts receivable securitization agreements outstanding	193.2		231.7					193.2	231.7
Sale of Whiting Clean Energy to BPAE											216.7
Portion of working capital											16.1
Total executed purchase and sales agreement guarantees											220
Additional purchase and sales agreement guarantees										30.0
Face amount of notes		250.0		1,000.0
Percentage of interest in Millennium												47.50%
Fair value of guarantee obligations												1.5
Recorded reserves to cover environmental remediation at various sites	168.0		173.5
Payments for capital improvements																			1,050	925
Minimum estimates cost of compliance					20
Maximum estimates cost of compliance					25
Original number of facilities AOC covered under conduct characterization and remediation activities, approximately													245
Number of liquid removal points AOC covered under conduct characterization and remediation activities													13,000
Number of mercury measurement stations AOC covered under conduct characterization and remediation activities													2,200
Number of storage well locations AOC covered under conduct characterization and remediation activities													3,700
Proposed penalty of NOV asserts violations of Pennsylvania Clean Streams law and Pennsylvania Solid Waste Management act													1
Increased liability for estimated remediation costs						71.1							3.5	25.6
Liability for estimated remediation costs						139.5	136.1						28.4	30.0
Reasonably possible remediation costs variance from reserve							$ 25
Remaining number of facilities AOC covered under conduct characterization and remediation activities, approximately	50

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Share-Based Compensation (Schedule Of Transactions Of Stock Option) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	Jun. 30, 2012
Share-Based Compensation [Abstract]
Outstanding, Options at December 31, 2010	1.8
Outstanding, Weighted Average Option Price at December 31, 2010	$ 22.00
Outstanding, Options at December 31, 2011	1.8
Outstanding, Weighted Average Option Price at December 31, 2011	$ 22.00
Exercisable, Weighted Average Option Price at December 31, 2011	$ 22.00

XML

Document And Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 25, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Entity Registrant Name	NISOURCE INC/DE
Entity Central Index Key	0001111711
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		284,905,701

XML

Regulatory Matters

6 Months Ended

Jun. 30, 2012

Regulatory Matters [Abstract]

Regulatory Matters

8.       Regulatory Matters

Gas Distribution Operations Regulatory Matters

Significant Rate Developments. On June 27, 2011, Northern Indiana filed a settlement agreement with the IURC in which regulatory stakeholders agreed that Northern Indiana should adopt the WACOG accounting methodology instead of LIFO, Northern Indiana's historical method. On August 31, 2011, the IURC approved the settlement and Northern Indiana transitioned to WACOG accounting methodology beginning January 1, 2012.

On March 15, 2012, the IURC approved a settlement agreement with Northern Indiana and all participating parties to extend its product and services contained in its current gas ARP indefinitely.

On May 19, 2008 Columbia of Ohio filed an application with the PUCO to defer environmental remediation expenses. On September 24, 2008, the PUCO approved the application. Each year Columbia of Ohio must report on the amounts deferred during the previous year. On December 6, 2011, Columbia of Ohio filed its annual deferral report for the twelve months ended November 30, 2011. PUCO Staff filed its Comments on January 5, 2012, and objected to deferral of costs for a Toledo remediation project. Columbia of Ohio capitalized $2.4 million in costs associated with the Toledo project which will be proposed for recovery as a component of future rate base.

On March 19, 2012, Columbia of Massachusetts filed its Off-Peak RDAF with a proposed effective date of May 1, 2012. On April 23, 2012, the DPU issued an order, allowing the proposed RDAF to take effect subject to further investigation and reconciliation. An evidentiary hearing is set for August 28, 2012.

On April 13, 2012, Columbia of Massachusetts submitted a filing with the Massachusetts DPU requesting an annual revenue requirement increase of $29.2 million. Columbia of Massachusetts filed using a historic test year ending December 31, 2011. Additionally, Columbia of Massachusetts proposed rate-year, rate base treatment, as well as modification to the TIRF. The rate-year, rate base treatment has been proposed to reduce the impact of regulatory lag. An order is expected later this year, with new rates going into effect on November 1, 2012.

On February 14, 2012, Columbia of Ohio held its first standard choice offer auction which resulted in a retail price adjustment of $1.53 per Mcf. On February 14, 2012, the PUCO issued an entry that approved the results of the auction with the new retail price adjustment to become effective April 1, 2012. With the implementation of the standard choice offer, Columbia of Ohio will report lower gross revenues and lower cost of sales. There is no impact on net revenues.

On October 3, 2011, Columbia of Ohio filed an application with PUCO, requesting authority to defer incurred charges to a regulatory asset for debt-based post-in-service carrying charges, depreciation and property taxes associated with Columbia of Ohio's capital program. Interested parties filed comments on Columbia of Ohio's application by February 17, 2012. Columbia of Ohio filed Reply Comments on February 27, 2012.

On November 30, 2011 Columbia of Ohio filed a Notice of Intent to file an application to adjust rates associated with Rider IRP and Rider DSM. On February 28, 2012, Columbia of Ohio filed its application to adjust rates associated with IRP and DSM Riders. The DSM Rider tracks and recovers costs associated with Columbia of Ohio's energy efficiency and conservation programs. The application sought to increase the annual revenue from the riders by approximately $27.9 million. On April 10, 2012, Columbia of Ohio reached a settlement with parties allowing for an increase in annual revenue from the Riders of approximately $27 million. On April 25, 2012, the PUCO issued an Entry that provided for approval of the settlement with new rates effective April 29, 2012.

On December 9, 2011 Columbia of Ohio filed a Notice of Intent to file an application to extend its Infrastructure Replacement Program. On January 6, 2012, the OCC filed a Memorandum Contra, arguing that Columbia of Ohio's base rates should be reviewed as part of the IRP extension process. Columbia of Ohio filed a Reply Memorandum on January 11, 2012. Columbia of Ohio filed an amended Notice of Intent and an amended Motion for Waiver on March 5, 2012. On May 8, 2012, Columbia of Ohio filed its application and supporting exhibits and testimony. On June 14, 2012 the PUCO issued an Entry through which it established a procedural schedule that provided for the filing of comments by June 14, 2012 and the filing of reply comments by June 25, 2012. On June 8, 2012, the PUCO Staff filed a motion for an extension of time for filing of comments by all parties to August 31, 2012. By Entry dated June 12, 2012, the PUCO extended the deadline for filing comments to August 31, 2012 and the deadline for filing reply comments to September 11, 2012.

On March 30, 2012, Columbia of Ohio filed an application with the PUCO that requests authority to establish a regulatory asset for corporate OPEB expenses allocated to Columbia of Ohio. The amount that Columbia of Ohio sought authority to defer is $2.1 million. By Entry dated July 18, 2012, the PUCO approved the application.

On April 12, 2012, Columbia of Virginia filed an Application with the VSCC for approval to amend and extend its CARE Plan for an additional three year period beginning January 1, 2013. The Amended CARE Plan includes incentives for residential and small general service customers to actively pursue conservation and energy efficiency measures, a surcharge designed to recover the costs of such measures on a real-time basis, and a performance-based incentive for the delivery of conservation and energy efficiency benefits. The Amended CARE Plan also includes a rate decoupling mechanism designed to mitigate the impact of declining customer usage. On April 27, 2012, the VSCC issued a procedural order inviting comments from the VSCC Staff and interested persons. The VSCC Staff and Columbia of Virginia reached a comprehensive settlement of the issues in the case and filed a Joint Motion requesting VSCC approval of the settlement terms on July 13, 2012. A decision is anticipated by August 10, 2012.

On April 19, 2012, Columbia of Ohio filed an application that requests authority to increase its uncollectible expense rider rate in order to generate an additional $14.6 million in annual revenue in order to offset anticipated increases in uncollectible expenses. On May 30, 2012, the PUCO issued an Entry that provided for approval of Columbia of Ohio's April 19, 2012 application for adjustment of its uncollectible expense rider with the new rate effective May 30, 2012.

On April 30, 2012, Columbia of Ohio filed an application to adjust its Interim, Emergency and Temporary Percentage of Income Payment Plan Rider (“PIPP”) from $0.1274 per Mcf to $0.0294 per Mcf to provide for the passback of an overrecovery of approximately $10.9 million and the recovery of its annual change in PIPP arrears. The PUCO approved the application and the revised PIPP Rider wentinto effect for the first billing unit of July 2012.

Cost Recovery and Trackers. A significant portion of the distribution companies' revenue is related to the recovery of gas costs, the review and recovery of which occurs via standard regulatory proceedings. All states require periodic review of actual gas procurement activity to determine prudence and to permit the recovery of prudently incurred costs related to the supply of gas for customers. NiSource distribution companies have historically been found prudent in the procurement of gas supplies to serve customers.

Certain operating costs of the NiSource distribution companies are significant, recurring in nature, and generally outside the control of the distribution companies. Some states allow the recovery of such costs via cost tracking mechanisms. Such tracking mechanisms allow for abbreviated regulatory proceedings in order for the distribution companies to implement charges and recover appropriate costs. Tracking mechanisms allow for more timely recovery of such costs as compared with more traditional cost recovery mechanisms. Examples of such mechanisms include GCR adjustment mechanisms, tax riders, and bad debt recovery mechanisms.

Comparability of Gas Distribution Operations line item operating results is impacted by regulatory trackers that allow for the recovery in rates of certain costs such as bad debt expenses. Increases in the expenses that are the subject of trackers, result in a corresponding increase in net revenues and therefore have essentially no impact on total operating income results.

Certain of the NiSource distribution companies have completed rate proceedings involving infrastructure replacement or are embarking upon regulatory initiatives to replace significant portions of their operating systems that are nearing the end of their useful lives. Each LDC's approach to cost recovery may be unique, given the different laws, regulations and precedent that exist in each jurisdiction.

Gas Transmission and Storage Operations Regulatory Matters

Columbia Gulf Rate Case.On October 28, 2010, ColumbiaGulf filed a rate case with the FERC, proposing a rate increase and tariff changes. Among other things, the filing proposed a revenue increase of approximately $50 million to cover increases in the cost of services, which includes adjustments for operation and maintenance expenses, capital investments, adjustments to depreciation rates and expense, rate of return, and increased federal, state and local taxes. On November 30, 2010, the FERC issued an Order allowing new rates to become effective by May 2011, subject to refund. Columbia Gulf placed new rates into effect, subject to refund, on May 1, 2011. Columbia Gulf and the active parties to the case negotiated a settlement, which was filed with the FERC on September 9, 2011. On September 30, 2011, the Chief Judge severed the issues relating to a contesting party for separate hearing and decision. On October 4, 2011, the Presiding Administrative Law Judge certified the settlement agreement as uncontested to the FERC with severance of the contesting party from the settlement. On November 1, 2011, Columbia Gulf began billing interim rates to customers. On December 1, 2011, the FERC issued an order approving the settlement without change. The key elements of the settlement, which was a “black box agreement”, include: (1) increased base rate to $0.1520 per Dth and (2) establishing a postage stamp rate design. No protests to the order were filed and therefore, pursuant to the Settlement, the order became final on January 1, 2012 which made the settlement effective on February 1, 2012. On February 2, 2012, the Presiding Administrative Law Judge issued an initial decision granting a joint motion terminating the remaining litigation with the contesting party and allowing it to become a settling party.The FERC issued an order on March 15, 2012, affirming the initial decision, which terminated the remaining litigation with the contesting party. Refunds of approximately $16 million, accrued as of December 31, 2011, were disbursed to settling parties in March 2012.

Electric Operations Regulatory Matters

Significant Rate Developments. On July 18, 2011, Northern Indiana filed with the IURC a settlement in its 2010 Electric Rate Case with the OUCC, Northern Indiana Industrial Group, NLMK Indiana and Indiana Municipal Utilities Group. The settlement agreement limited the proposed base rate impact to the residential customer class to a 4.5% increase. The parties have also agreed to a rate of return of 6.98% based upon a 10.2% return on equity. The settlement also resolves all pending issues related to compliance with the August 25, 2010 Order in the 2008 Electric Rate Case. On December 21, 2011, the IURC issued an Order approving the Settlement Agreement as filed, and new electric base rates became effective on December 27, 2011. On January 20, 2012, the City of Hammond filed an appeal of the IURC's December 21, 2011 Order and subsequently, on June 4, 2012, filed a motion to dismiss the appeal. The motion was granted on June 27, 2012.

During 2002, Northern Indiana settled certain regulatory matters related to an electric rate review. On September 23, 2002, the IURC issued an Order adopting most aspects of the settlement. The Order approving the settlement provided that certain electric customers of Northern Indiana would receive bill credits of approximately $55.1 million each year. The credits continued at approximately the same annual level and per the same methodology, until the IURC approval and implementation of new customer rates, which occurred on December 27, 2011. A final reconciliation of the credits will occur in a future fuel cost filing according to the terms of the approved settlement in the 2010 Electric Rate Case. Credits amounting to $(1.0) million and $25.1 million were recognized for electric customers for the first six months of 2012 and 2011, respectively.

On December 9, 2009, the IURC issued an Order in its generic DSM investigation proceeding establishing an overall annual energy savings goal of 2% to be achieved by Indiana jurisdictional electric utilities in 10 years, with interim savings goals established in years one through nine. On May 25, 2011, the IURC issued an Order approving a tracker mechanism to recover the costs associated with these energy efficiency programs. On July 27, 2011, the IURC issued an Order approving the energy efficiency programs. On February 1, 2012, Northern Indiana submitted a petition to the IURC to recover lost margins. The evidentiary hearing was held on July 3, 2012. No party opposed Northern Indiana's request. An order is anticipated late in the third quarter of 2012.

Cost Recovery and Trackers. A significant portion of Northern Indiana's revenue is related to the recovery of fuel costs to generate power and the fuel costs related to purchased power. These costs are recovered through a FAC, a standard, quarterly, “summary” regulatory proceeding in Indiana.

As part of a multi-state effort to strengthen the electric transmission system serving the Midwest, Northern Indiana anticipates making an investment in a new, 100-mile, 345-kilovolt transmission project in northern Indiana. The project, a major new transmission system improvement reviewed and authorized by the MISO, is scheduled to be in service during the latter part of the decade. On March 16, 2012, Northern Indiana filed with the FERC for incentives for this transmission project, including all construction work in progress in rate base. Northern Indiana has also been identified by the MISO as one of two Transmission Owners to invest in another project. On February 8, 2012, Pioneer Transmission, LLC filed a complaint with the FERC, seeking to obtain 100 percent of the investment rights in this second project. The last Response was filed by Northern Indiana on March 27, 2012. On July 19, 2012, the FERC issued an order approving the incentives requested by Northern Indiana, including all construction work in progress in rate base, for the 100-mile, 345-kilovolt transmission project in northern Indiana. On this same day, the FERC also issued an order which denied the complaint filed by Pioneer Transmission, LLC and affirmed that Northern Indiana and Duke Energy are the appropriate parties to share equally in the development of a 66-mile 765kV transmission project extending between Reynolds, Indiana and Greentown, Indiana.

In the Order issued on August 25, 2010, the IURC approved an RTO tracker for recovery of MISO non-fuel costs and revenues and off-system sales sharing and ordered that purchased power costs and fuel-related MISO charge types be recovered in the FAC. The IURC also approved a purchase capacity tracker referred to as the RA Tracker. Similar treatment was requested in the 2010 Electric Rate Case filing and approved in the December 21, 2011 Order approving the Settlement Agreement. The implementation of such trackers coincides with the implementation of new customer rates. Northern Indiana made its first filings for recovery of costs under the RTO and RA mechanisms on February 2, 2012. The RTO filing also seeks authorization from the IURC to retain certain revenues under MISO Schedule 26-A to support investments in Northern Indiana's Multi-Value Projects under MISO's 2011 transmission expansion plan. On April 10, 2012, the IURC approved a procedural schedule to consider the retention of MISO Schedule 26-A revenues. The hearing was held on May 14, 2012. An order is anticipated in the third quarter of 2012.

As part of the August 25, 2010 Order, a new “purchase power benchmark” became effective. This purchase power benchmark superseded the one made effective by a settlement in October 2007. The benchmark is based upon the costs of power generated by a hypothetical natural gas fired unit using gas purchased and delivered to Northern Indiana. During the first six months of 2012 and 2011, no purchased power costs exceeded the benchmark.

On March 22, 2011, Northern Indiana filed a petition with the IURC for a certificate of public convenience and necessity and associated relief for the construction of additional environmental projects required to comply with the NOV consent decree lodged in the United States District Court for the Northern District of Indiana on January 13, 2011. Refer to Note 19-C, “Environmental Matters,” for additional information. This petition has since been trifurcated into three separate phases. On December 28, 2011, the IURC issued an order for the Phase I projects estimated to cost $500 million and granting the requested ratemaking and accounting relief associated with these Phase I projects. On February 15, 2012, the IURC issued an order for the Phase II projects. The proposed construction of a FGD unit on Michigan City Generating Station Unit 12 is the subject of Phase III of this proceeding. The evidentiary hearing for the Phase III projects was held on May 10, 2012. No party opposed Northern Indiana's request. An order is anticipated in the second half of 2012.

On February 7, 2012, Northern Indiana filed ECR-19 and EER-9, the filing implementing the ECT, which included $109.6 million of net capital expenditures and operation and maintenance and depreciation expenses of $32.6 million for the period ended December 31, 2011.

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Income Taxes (Schedule Of Principal Components Of Net Deferred Tax Liability) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Income Taxes [Abstract]
Non-Current Deferred Tax Liability	$ 2,730.5	$ 2,541.9

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Share-Based Compensation (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 years	Jun. 30, 2011	Mar. 11, 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock available for awards, shares					8,000,000
Common stock reserved for future awards, shares	7,396,657		7,396,657
Aggregate intrinsic value for the options outstanding and exercisable	$ 5.0		$ 5.0
Cash received from the exercise of options			21.8	0.3
Stock-based employee compensation expense	4.1	3.4	7.3	6.4
Related tax benefits	1.4	1.3	2.5	2.3
Unrecognized compensation cost related to nonvested awards	23.8		23.8
Weighted-average remaining requisite service period, years			2.1
401(k) match, profit sharing and non-elective expense	6.9	5.2	22.0
Units issued			1,800,000
Stock options outstanding, approximately	1,800,000		1,800,000
Weighted average strike price of stock options	$ 22.00		$ 22.00
Exercisable, Weighted Average Option Price at December 31, 2011	$ 22.00		$ 22.00
Restricted Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			180,816
Fair value of shares granted			4.0
Shares nonvested	554,028		554,028
Contingent Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			749,601
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares nonvested	1,996,841		1,996,841
Omnibus Plan [Member] | Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of shares granted			15.5
Omnibus Plan [Member] | Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units issued			132,537
Director Plan [Member] | Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units issued			240,180
401 (K) Match Profit Sharing And Company Contribution [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
401(k) match, profit sharing and non-elective expense			$ 12.7	$ 9.1

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Statements of Consolidated Comprehensive Income (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Statement of Income and Comprehensive Income [Abstract]
Unrealized (loss) gain on available-for-sale securities, tax	$ 0.2	$ 0.7	$ 1.8	$ 0.5
Unrealized (losses) gains on derivatives, net	0.6	0.4	1.2	1.1
Unrealized gain on cash flow hedging	0.2	0.2	0.5	0.4
Unrecognized pension benefit and OPEB costs, tax	$ 0.3	$ 0.3	$ 0.8	$ 0.7

XML

Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

2.       Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Comprehensive Income. In June 2011, the FASB issued Accounting Standards Update 2011-05, which revises the manner in which entities present comprehensive income in their financial statements. The new guidance removes the presentation options in ASC 220 and requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The update does not change the items that must be reported in other comprehensive income. In December 2011, the FASB issued Accounting Standards Update 2011-12, which indefinitely defers the requirement to present reclassification adjustments out of accumulated other comprehensive income by component in both the Condensed Statements of Consolidated Income (unaudited) and the Condensed Statements of Consolidated Comprehensive Income (unaudited), as required by Accounting Standards Update 2011-05. For public entities, these updates are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. NiSource adopted the guidance on January 1, 2012 by presenting the Condensed Statements of Consolidated Income (unaudited) and the Condensed Statements of Consolidated Comprehensive Income (unaudited) as two separate but consecutive statements.

Goodwill Impairment. In September 2011, the FASB issued Accounting Standards Update 2011-08, which gives entities testing goodwill for impairment the option of performing a qualitative assessment before calculating the fair value of a reporting unit for the goodwill impairment test. The amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. As NiSource performs its annual Goodwill impairment test during the second quarter of its fiscal year, NiSource considered the provisions of this new standard and determined not to elect the option for the second quarter of 2012. NiSource will continue to evaluate whether to elect the option going forward.

Recently Issued Accounting Pronouncements

Balance Sheet Disclosure. In December 2011, the FASB issued Accounting Standards Update 2011-11, which requires additional disclosures regarding the nature of an entity's rights to offset positions associated with its financial and derivative instruments. These new disclosures will provide additional information about the entity's gross and net financial exposure. The amendment is effective for fiscal years, and interim periods within those years, beginning after January 1, 2013 with retrospective application required. NiSource is currently reviewing the provisions of this new standard to determine the impact on its Condensed Consolidated Financial Statements (unaudited) and Notes to Condensed Consolidated Financial Statements (unaudited).

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Basis of Accounting Presentation

6 Months Ended

Jun. 30, 2012

Basis Of Accounting Presentation [Abstract]

Basis Of Accounting Presentation [TextBlock]

1.       Basis of Accounting Presentation

The accompanying unaudited condensed consolidated financial statements for NiSource (the “Company”) reflect all normal recurring adjustments that are necessary, in the opinion of management, to present fairly the results of operations in accordance with GAAP in the United States of America.

The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in NiSource's Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Income for interim periods may not be indicative of results for the calendar year due to weather variations and other factors.

The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although NiSource believes that the disclosures made are adequate to make the information not misleading.

Immaterial Restatement

As indicated in NiSource's Annual Report on Form 10-K for the fiscal year ended December 31, 2011, NiSource made correcting adjustments to its historical financial statements including for the three and six months ended June 30, 2011 relating to deferred revenue, environmental asset recovery, OPEB over-reimbursement, and OPEB regulatory assets. NiSource does not believe that these corrections, individually or in the aggregate, are material to its financial statements (unaudited) for the three and six months ended June 30, 2012. For additional information on these corrections, see Note 1, Nature of Operations and Summary of Significant Accounting Policies, and Note 26, Quarterly Financial Data (Unaudited), of the Consolidated Financial Statements of NiSource's Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

The following table sets forth the effects of the correcting adjustments to Net Income for the three and six months ended June 30, 2011:

		Three Months Ended		Six Months Ended
Increase/(Decrease) in Net Income (in millions)		June 30, 2011		June 30, 2011
Previously reported Net Income		$	38.9	$	244.1
	Deferred revenue		-		(0.6)
	Environmental asset recovery		-		8.0
	OPEB over-reimbursement		(0.2)		(0.4)
	OPEB regulatory asset		2.4		2.4
	Total corrections		2.2		9.4
	Income taxes		0.9		3.8
Corrected Net Income		$	40.2	$	249.7

The following table sets forth the effects of the correcting adjustments on affected line items within the Condensed Statement of Consolidated Income (unaudited) for the three and six months ended June 30, 2011:

Condensed Statements of Consolidated Income (unaudited)
		Three Months Ended				Six Months Ended
		June 30, 2011				June 30, 2011
		As Previously				As Previously
(in millions, except per share amounts)		Reported		As Corrected		Reported		As Corrected
Net Revenues
	Electric	$	349.2	$	349.2	$	696.3	$	695.7
Gross Revenues			1,228.3		1,228.3		3,460.5		3,459.9
Total Net Revenues			765.8		765.8		1,827.1		1,826.5
	Operation and maintenance		402.5		400.3		835.0		829.6
	Depreciation and amortization		134.5		134.5		273.4		268.8
Total Operating Expenses			604.8		602.6		1,269.9		1,259.9
Operating Income			163.3		165.5		562.5		571.9
Income from Continuing Operations before Income Taxes			69.5		71.7		382.2		391.6
Income Taxes			30.0		30.9		137.9		141.7
Income from Continuing Operations			39.5		40.8		244.3		249.9
Net Income		$	38.9	$	40.2	$	244.1	$	249.7
Basic Earnings Per Share ($)
	Continuing operations	$	0.14	$	0.14	$	0.87	$	0.89
Basic Earnings Per Share		$	0.14	$	0.14	$	0.87	$	0.89
Diluted Earnings Per Share ($)
	Continuing operations	$	0.14	$	0.14	$	0.85	$	0.87
Diluted Earnings Per Share		$	0.14	$	0.14	$	0.85	$	0.87

These corrections affected certain line items within net cash flows from operating activities on the Condensed Statement of Consolidated Cash Flows (unaudited) for the six months ended June 30, 2011, with no net effect on total net cash flows from operating activities.

Immaterial Restatement

As indicated in NiSource's Annual Report on Form 10-K for the fiscal year ended December 31, 2011, NiSource made correcting adjustments to its historical financial statements including for the three and six months ended June 30, 2011 relating to deferred revenue, environmental asset recovery, OPEB over-reimbursement, and OPEB regulatory assets. NiSource does not believe that these corrections, individually or in the aggregate, are material to its financial statements (unaudited) for the three and six months ended June 30, 2012. For additional information on these corrections, see Note 1, Nature of Operations and Summary of Significant Accounting Policies, and Note 26, Quarterly Financial Data (Unaudited), of the Consolidated Financial Statements of NiSource's Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

The following table sets forth the effects of the correcting adjustments to Net Income for the three and six months ended June 30, 2011:

		Three Months Ended		Six Months Ended
Increase/(Decrease) in Net Income (in millions)		June 30, 2011		June 30, 2011
Previously reported Net Income		$	38.9	$	244.1
	Deferred revenue		-		(0.6)
	Environmental asset recovery		-		8.0
	OPEB over-reimbursement		(0.2)		(0.4)
	OPEB regulatory asset		2.4		2.4
	Total corrections		2.2		9.4
	Income taxes		0.9		3.8
Corrected Net Income		$	40.2	$	249.7

The following table sets forth the effects of the correcting adjustments on affected line items within the Condensed Statement of Consolidated Income (unaudited) for the three and six months ended June 30, 2011:

Condensed Statements of Consolidated Income (unaudited)
		Three Months Ended				Six Months Ended
		June 30, 2011				June 30, 2011
		As Previously				As Previously
(in millions, except per share amounts)		Reported		As Corrected		Reported		As Corrected
Net Revenues
	Electric	$	349.2	$	349.2	$	696.3	$	695.7
Gross Revenues			1,228.3		1,228.3		3,460.5		3,459.9
Total Net Revenues			765.8		765.8		1,827.1		1,826.5
	Operation and maintenance		402.5		400.3		835.0		829.6
	Depreciation and amortization		134.5		134.5		273.4		268.8
Total Operating Expenses			604.8		602.6		1,269.9		1,259.9
Operating Income			163.3		165.5		562.5		571.9
Income from Continuing Operations before Income Taxes			69.5		71.7		382.2		391.6
Income Taxes			30.0		30.9		137.9		141.7
Income from Continuing Operations			39.5		40.8		244.3		249.9
Net Income		$	38.9	$	40.2	$	244.1	$	249.7
Basic Earnings Per Share ($)
	Continuing operations	$	0.14	$	0.14	$	0.87	$	0.89
Basic Earnings Per Share		$	0.14	$	0.14	$	0.87	$	0.89
Diluted Earnings Per Share ($)
	Continuing operations	$	0.14	$	0.14	$	0.85	$	0.87
Diluted Earnings Per Share		$	0.14	$	0.14	$	0.85	$	0.87

These corrections affected certain line items within net cash flows from operating activities on the Condensed Statement of Consolidated Cash Flows (unaudited) for the six months ended June 30, 2011, with no net effect on total net cash flows from operating activities.

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income Taxes

13.       Income Taxes

NiSource's interim effective tax rates reflect the estimated annual effective tax rates for 2012 and 2011, adjusted for tax expense associated with certain discrete items.The effective tax rates for the three months ended June 30, 2012 and 2011 were 34.8% and 43.1%, respectively. The effective tax rates for the six months ended June 30, 2012 and 2011 were 34.8% and 36.2%, respectively. These effective tax rates differ from the Federal tax rate of 35% primarily due to the effects of tax credits, state income taxes, utility rate-making, and other permanent book-to-tax differences.

The decrease in the three and six month effective tax rates of 8.3% and 1.4%, respectively, in 2012 versus 2011 is due primarily to the 2011 enactment of Indiana tax legislation.

On May 12, 2011, the governor of Indiana signed into law House Bill 1004, which among other things, lowers the corporate income tax rate from 8.5% to 6.5% over four years beginning on July 1, 2012. The reduction in the tax rate will impact deferred income taxes and tax related regulatory assets and liabilities recoverable in the rate making process. In addition, other deferred tax assets and liabilities, primarily deferred tax assets related to Indiana net operating loss carry forward, will be reduced to reflect the lower rate at which these temporary differences and tax benefits will be realized. In the second quarter 2011, NiSource recorded tax expense of $6.8 million to reflect the effect of this rate change.

On December 27, 2011, the United States Treasury Department and the IRS issued temporary and proposed regulations effective for years beginning on or after January 1, 2012 that, among other things, provided guidance on whether expenditures qualified as deductible repairs. In addition, on March 15, 2012, the IRS issued a directive to discontinue exam activity related to positions on this issue taken on original tax returns for years beginning before January 1, 2012. NiSource expects the IRS to issue guidance for the treatment of expenditures for gas transmission and distribution assets, and generation within the next twelve months. NiSource further expects that it will be more likely to adopt the procedures provided in this guidance rather than the more general rules set forth in the temporary and proposed regulations. Accordingly, NiSource management expects to adjust unrecognized tax benefits recorded in 2009 related to its change in tax accounting for repairs for gas transmission and distribution, assets and generation assets in the period specific guidance for these assets is issued. As noted above, NiSource management believes that the issuance of such guidance and intent to adopt the guidance by NiSource is reasonably possible to occur within the next twelve months. In that event, NiSource will adjust its unrecognized tax benefits for this issue in the amount of $80.9 million. NiSource believes these adjustments will not have a significant effect on the income statement.

On July 2, 2012, House Bill 761 was signed into law in Pennsylvania, which among other things, adopts a single-sales factor apportionment effective for tax years beginning on or after January 1, 2013. NiSource does not believe this adjustment will have a significant effect on net income.

There were no material changes recorded in the second quarter of 2012 to NiSource's uncertain tax positions as of December 31, 2011.

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Risk Management And Energy Marketing Activities

6 Months Ended

Jun. 30, 2012

Risk Management And Energy Marketing Activities [Abstract]

Risk Management And Energy Marketing Activities

9.       Risk ManagementActivities

NiSource is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are commodity price risk and interest rate risk. Derivative natural gas contracts are entered into to manage the price risk associated with natural gas price volatility and to secure forward natural gas prices. Interest rate swaps are entered into to manage interest rate risk associated with NiSource's fixed-rate borrowings. NiSource designates some of its commodity forward contracts as cash flow hedges of forecasted purchases of commodities and designates its interest rate swaps as fair value hedges of fixed-rate borrowings. Additionally, certain NiSource subsidiaries enter into forward physical contracts with various third parties to procure or sell natural gas or power. Certain forward physical contracts are derivatives which qualify for, and which NiSource may elect, the normal purchase and normal sales exception which do not require mark-to-market accounting.

Accounting Policy for Derivative Instruments. The ASC topic on accounting for derivatives and hedging requires an entity to recognize all derivatives as either assets or liabilities on the Consolidated Balance Sheets at fair value, unless such contracts are exempted such as a normal purchase and normal sale contract under the provisions of the ASC topic. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and resulting designation.

NiSource uses a variety of derivative instruments (exchange traded futures and options, physical forwards and options, basis contracts, financial commodity swaps, and interest rate swaps) to effectively manage its commodity price risk and interest rate risk exposure. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, or (b) a hedge of the exposure to variable cash flows of a forecasted transaction. In order for a derivative contract to be designated as a hedge, the relationship between the hedging instrument and the hedged item or transaction must be highly effective. The effectiveness test is performed at the inception of the hedge and each reporting period thereafter, throughout the period that the hedge is designated. Any amounts determined to be ineffective are recognized currently in earnings. For derivative contracts that qualify for the normal purchase and normal sales exception, a contract's fair value is not recognized in the Consolidated Financial Statements until the contract is settled.

Unrealized and realized gains and losses are recognized each period as components of AOCI, regulatory assets and liabilities or earnings depending on the designation of the derivative instrument. For subsidiaries that utilize derivatives for cash flow hedges, the effective portions of the gains and losses are recorded to AOCI and are recognized in earnings concurrent with the disposition of the hedged risks. If a forecasted transaction corresponding to a cash flow hedge is no longer probable to occur, the accumulated gains or losses on the derivative are recognized currently in earnings. For fair value hedges, the gains and losses are recorded in earnings each period together with the change in the fair value of the hedged item. As a result of the rate-making process, the rate-regulated subsidiaries generally record gains and losses as regulatory liabilities or assets and recognize such gains or losses in earnings when both the contracts settle and the physical commodity flows. These gains and losses recognized in earnings are then subsequently recovered or passed back to customers in revenues through rates. When gains and losses are recognized in earnings, they are recognized in revenues or cost of sales for derivatives that correspond to commodity risk activities and are recognized in interest expense for derivatives that correspond to interest-rate risk activities.

NiSource has elected not to net fair value amounts for its derivative instruments or the fair value amounts recognized for its right to receive cash collateral or obligation to pay cash collateral arising from those derivative instruments recognized at fair value, which are executed with the same counterparty under a master netting arrangement. NiSource discloses amounts recognized for the right to reclaim cash collateral within “Restricted cash” and amounts recognized for the right to return cash collateral within “Other accruals” on the Consolidated Balance Sheets.

Commodity Price Risk Programs. NiSource and NiSource's utility customers are exposed to variability in cash flows associated with natural gas purchases and volatility in natural gas prices. NiSource purchases natural gas for sale and delivery to its retail, commercial and industrial customers, and for most customers the variability in the market price of gas is passed through in their rates. Some of NiSource's utility subsidiaries offer programs where variability in the market price of gas is assumed by the respective utility. The objective of NiSource's commodity price risk programs is to mitigate this gas cost variability, for NiSource or on behalf of its customers, associated with natural gas purchases or sales by economically hedging the various gas cost components by using a combination of futures, options, forward physical contracts, basis swap contracts or other derivative contracts. Northern Indiana also uses derivative contracts to minimize risk associated with power price volatility. These commodity price risk programs and their respective accounting treatment are described below.

Northern Indiana, Columbia of Pennsylvania, Columbia of Kentucky, Columbia of Maryland and Columbia of Virginia use NYMEX futures and NYMEX options to minimize risk associated with gas price volatility. These derivative programs must be marked to fair value, but because these derivatives are used within the framework of the companies' GCR or FAC mechanism, regulatory assets or liabilities are recorded to offset the change in the fair value of these derivatives.

Northern Indiana and Columbia of Virginia offer a fixed price program as an alternative to the standard GCR mechanism. These services provide certain customers with the opportunity to either lock in their gas cost or place a cap on the gas costs that would be charged in future months. In order to hedge the anticipated physical purchases associated with these obligations, forward physical contracts, NYMEX futures and NYMEX options are used to secure forward gas prices. The accounting treatment elected for these contracts is varied in that certain of these contracts have been accounted for as cash flow hedges while some contracts are not. The accounting treatment is based on the election of the company. The normal purchase and normal sales exception is elected for forward physical contracts associated with these programs where delivery of the commodity is probable to occur.

Northern Indiana also offers a DependaBill program to its customers as an alternative to the standard tariff rate that is charged to residential customers. The program allows Northern Indiana customers to fix their total monthly bill in future months at a flat rate regardless of gas usage or commodity cost. In order to hedge the anticipated physical purchases associated with these obligations, forward physical contracts, NYMEX futures and NYMEX options have been used to secure forward gas prices. The normal purchase and normal sales exception is elected for forward physical contracts associated with these programs where delivery of the commodity is probable to occur.

Northern Indiana enters into gas purchase contracts at first of the month prices that give counterparties the daily option to either sell an additional package of gas at first of the month prices or recall the original volume to be delivered. Northern Indiana charges a fee for this option. The changes in the fair value of these options are primarily due to the changing expectations of the future intra-month volatility of gas prices. These written options are derivative instruments, must be marked to fair value and do not meet the requirement for hedge accounting treatment. However, Northern Indiana records the related gains and losses associated with these transactions as a regulatory asset or liability.

Columbia of Kentucky, Columbia of Ohio and Columbia of Pennsylvania enter into contracts that allow counterparties the option to sell gas to them at first of the month prices for a particular month of delivery. These Columbia LDCs charge the counterparties a fee for this option. The changes in the fair value of the options are primarily due to the changing expectations of the future intra-month volatility of gas prices. These Columbia LDCs defer a portion of the change in the fair value of the options as either a regulatory asset or liability based on the regulatory customer sharing mechanisms in place, with the remaining changes in fair value recognized currently in earnings.

As part of the MISO Day 2 initiative, Northern Indiana was allocated or has purchased FTRs. These FTRs help Northern Indiana offset congestion costs due to the MISO Day 2 activity. The FTRs are marked to fair value and are not accounted for as a hedge, but since congestion costs are recoverable through the fuel cost recovery mechanism, the related gains and losses associated with marking these derivatives to market are recorded as a regulatory asset or liability. In the second quarter of 2008, MISO changed its allocation procedures from an allocation of FTRs to an allocation of ARRs, whereby Northern Indiana was allocated ARRs based on its historical use of the MISO administered transmission system. ARRs entitle the holder to a stream of revenues or charges based on the price of the associated FTR in the FTR auction, so ARRs can be used to purchase FTRs in the FTR auction. ARRs are not derivatives.

NiSource is in the process of winding down its unregulated natural gas marketing business, where gas financial contracts are utilized to economically hedge expected future gas purchases associated with forward gas agreements. These financial contracts, as well as the associated forward physical sales contracts, are derivatives and are marked-to-market with all associated gains and losses recognized to income. NiSource established a reserve of $1.6 million and $25.6 million against certain derivatives as of June 30, 2012 and December 31, 2011, respectively. This amount represents reserves related to the creditworthiness of certain customers, fair value of future cash flows, and the cost of maintaining significant amounts of restricted cash. The physical sales contracts marked-to-market had a fair value of approximately $55.4 million at June30, 2012 and $136.8 million at December 31, 2011, while the financial derivative contracts marked-to-market had a fair value loss of $52.9 million at June 30, 2012, and $155.5 million at December 31, 2011. During the fourth quarter of 2011, NiSource recorded a reserve of $22.6 million on certain assets related to the wind down of the unregulated natural gas marketing business. During 2012, NiSource settled a majority of the contracts related to the reserve noted above and wrote off $43.8 million of price risk assets. Additionally, NiSource has a notes receivable balance related to the settlements of $21.3 million as of June 30, 2012.

On October 31, 2011, cash and derivatives broker-dealer MF Global filed for Chapter 11 bankruptcy protection. MF Global brokered NYMEX hedges of natural gas futures on behalf of NiSource affiliates. At the date of bankruptcy, NiSource affiliates had contracts open with MF Global with settlement dates ranging from November 2011 to February 2014. On November 3, 2011, these contracts were measured at a mark-to-market loss of approximately $46.4 million. NiSource affiliates had posted initial margin to open these accounts of $6.9 million and additional maintenance margin for mark-to-market losses, for a total cash balance of $53.3 million. Within the first week after the filing, at the direction of the Bankruptcy Court, a transfer of assets was initiated on behalf of NiSource affiliates to a court-designated replacement broker for future trade activity. The existing futures positions were closed and then rebooked with the replacement broker at the new closing prices as of November 3, 2011. Initial margin on deposit at MF Global of $5.7 million was transferred to the court-designated replacement broker. The maintenance margin was retained by MF Global to offset the loss positions of the open contracts on November 3, 2011. NiSource affiliates are monitoring the activity in the bankruptcy case and have filed a proof of claim at the Court's direction. As of June 30, 2012, NiSource affiliates maintained a reserve for the $1.2 million difference between the initial margin posted with MF Global and the cash transferred to the court-designated replacement broker as a loss contingency.

Commodity price risk program derivative contracted gross volumes are as follows:

		June 30, 2012	December 31, 2011
Commodity Price Risk Program:
	Gas price volatility program derivatives (MMDth)	31.5	26.1
	Price Protection Service program derivatives (MMDth)	0.4	1.0
	DependaBill program derivatives (MMDth)	0.3	0.3
	Regulatory incentive program derivatives (MMDth)	-	0.9
	Gas marketing program derivatives (MMDth)(1)	13.8	28.5
	Gas marketing forward physical derivatives (MMDth)(2)	13.8	27.1
	Electric energy program FTR derivatives (mw)(3)	17,686.2	8,578.5
(1)Basis contract volumes not included in the above table were 14.1 MMDth and 15.9 MMDth as of June 30, 2012 and December 31, 2011, respectively.
(2)Basis contract volumes not included in the above table were 14.5 MMDth and 29.9 MMDth as of June 30, 2012 and December 31, 2011, respectively.
(3)Megawatt hours reported in thousands

Interest Rate Risk Activities. NiSource recognizes that the prudent and selective use of derivatives may help it to lower its cost of debt capital and manage its interest rate exposure. NiSource Finance has entered into various "receive fixed" and "pay floating" interest rate swap agreements which modify the interest rate characteristics of a portion of its outstanding long-term debt from fixed to variable rate. These interest rate swaps also serve to hedge the fair market value of NiSource Finance's outstanding debt portfolio. As of June 30, 2012, NiSource had $7.3 billion of outstanding fixed rate debt, of which $500.0 million is subject to fluctuations in interest rates as a result of the fixed-to-variable interest rate swap transactions. These interest rate swaps are designated as fair value hedges. NiSource had no net gain or loss recognized in earnings due to hedging ineffectiveness for the six months ended June 30, 2012 and 2011.

On July 22, 2003, NiSource Finance entered into fixed-to-variable interest rate swap agreements in a notional amount of $500 million with four counterparties with an 11-year term. NiSource Finance receives payments based upon a fixed 5.40% interest rate and pays a floating interest amount based on U.S. 6-month BBA LIBOR plus an average of 0.78% per annum. There was no exchange of premium at the initial date of the swaps. In addition, each party has the right to cancel the swaps on July 15, 2013.

Contemporaneously with the issuance on September 16, 2005 of $1 billion of its 5.25% and 5.45% notes, maturing September 15, 2017 and 2020, respectively, NiSource Finance settled $900 million of forward starting interest rate swap agreements with six counterparties. NiSource paid an aggregate settlement payment of $35.5 million which is being amortized from AOCI to interest expense over the term of the underlying debt, resulting in an effective interest rate of 5.67% and 5.88%, respectively. As of June 30, 2012, AOCI includes $10.5million related to forward starting interest rate swap settlement, net of tax. These derivative contracts are accounted for as a cash flow hedge.

As of June 30, 2012, NiSource holds a 47.5% interest in Millennium. As NiSource reports Millennium as an equity method investment, NiSource is required to recognize a proportional share of Millennium's OCI. NiSource's proportionate share of the remaining unrealized loss associated with a settled interest rate swap is $19.2 million, net of tax, as of June 30, 2012. Millennium is amortizing the unrealized loss related to these terminated interest rate swaps into earnings using the effective interest method through interest expense as interest payments are made. NiSource records its proportionate share of the amortization as Equity Earnings in Unconsolidated Affiliates in the Condensed Statements of Consolidated Income (unaudited).

NiSource's location and fair value of derivative instruments on the Condensed Consolidated Balance Sheets (unaudited) were:

			June 30,		December 31,
Asset Derivatives (in millions)			2012		2011
		Balance Sheet Location	Fair Value		Fair Value (1)
Derivatives designated as hedging instruments
	Interest rate risk activities
		Price risk management assets (current)	$	-	$	-
		Price risk management assets (noncurrent)		48.5		56.7
Total derivatives designated as hedging instruments			$	48.5	$	56.7
Derivatives not designated as hedging instruments
	Commodity price risk programs
		Price risk management assets (current)	$	120.0	$	141.8
		Price risk management assets (noncurrent)		41.8		150.0
Total derivatives not designated as hedging instruments			$	161.8	$	291.8
Total Asset Derivatives			$	210.3	$	348.5
(1)During the fourth quarter of 2011, NiSource recorded reserves of $22.6 million ($4.6 million current and $18.0 million noncurrent) on certain commodity price risk assets related to the wind down of the unregulated natural gas marketing business. As of June 30, 2012, NiSource has fully reversed these reserves as all contracts have been settled. The non-designated price risk asset amounts above are shown gross and have not been adjusted for the reserves.
			June 30,		December 31,
Liability Derivatives (in millions)			2012		2011
		Balance Sheet Location	Fair Value		Fair Value
Derivatives designated as hedging instruments
	Commodity price risk programs
		Price risk management liabilities (current)	$	-	$	0.4
		Price risk management liabilities (noncurrent)		-		0.1
Total derivatives designated as hedging instruments			$	-	$	0.5
Derivatives not designated as hedging instruments
	Commodity price risk programs
		Price risk management liabilities (current)	$	132.7	$	167.4
		Price risk management liabilities (noncurrent)		45.6		138.8
Total derivatives not designated as hedging instruments			$	178.3	$	306.2
Total Liability Derivatives			$	178.3	$	306.7

The effect of derivative instruments on the Condensed Statements of Consolidated Income(unaudited) was:

Derivatives in Cash Flow Hedging Relationships

Three Months Ended, (in millions):
	Amount of Gain					Amount of (Loss) Gain
	Recognized in OCI on					Reclassified from AOCI
	Derivative (Effective				Location of Gain (Loss)	into Income (Effective
	Portion)				Reclassified from AOCI	Portion)
Derivatives in Cash Flow	June 30,		June 30,		into Income (Effective	June 30,		June 30,
Hedging Relationships	2012		2011		Portion)	2012		2011
Commodity price risk programs	$	0.3	$	-	Cost of Sales	$	(0.2)	$	0.2
Interest rate risk activities		0.4		0.4	Interest expense, net		(0.7)		(0.7)
Total	$	0.7	$	0.4		$	(0.9)	$	(0.5)

Six Months Ended (in millions):
	Amount of Gain					Amount of Gain (Loss)
	Recognized in OCI on					Reclassified from AOCI
	Derivative (Effective				Location of Gain (Loss)	into Income (Effective
	Portion)				Reclassified from AOCI	Portion)
Derivatives in Cash Flow	June 30,		June 30,		into Income (Effective	June 30,		June 30,
Hedging Relationships	2012		2011		Portion)	2012		2011
Commodity price risk programs	$	0.6	$	0.5	Cost of Sales	$	(0.8)	$	0.8
Interest rate risk activities		0.8		0.8	Interest expense, net		(1.3)		(1.3)
Total	$	1.4	$	1.3		$	(2.1)	$	(0.5)

Three Months Ended, (in millions):
		Amount of Gain (Loss) Recognized
		in Income on Derivative
	Location of Gain (Loss)	(Ineffective Portion and Amount
	Recognized in Income on	Excluded from Effectiveness
	Derivative (Ineffective Portion	Testing)
Derivatives in Cash Flow Hedging	and Amount Excluded from
Relationships	Effectiveness Testing)	June 30, 2012		June 30, 2011
Commodity price risk programs	Cost of Sales	$	-	$	-
Interest rate risk activities	Interest expense, net		-		-
Total		$	-	$	-

Six Months Ended, (in millions)
		Amount of Gain (Loss) Recognized
		in Income on Derivative
	Location of Gain (Loss)	(Ineffective Portion and Amount
	Recognized in Income on	Excluded from Effectiveness
	Derivative (Ineffective Portion	Testing)
Derivatives in Cash Flow Hedging	and Amount Excluded from
Relationships	Effectiveness Testing)	June 30, 2012		June 30, 2011
Commodity price risk programs	Cost of Sales	$	-	$	-
Interest rate risk activities	Interest expense, net		-		-
Total		$	-	$	-

It is anticipated that during the next twelve months the expiration and settlement of cash flow hedge contracts will result in income statement recognition of amounts currently classified in AOCI of approximately $0.2 million of loss, net of taxes.

Derivatives in Fair Value Hedging Relationships
Three Months Ended, (in millions)
		Amount of Gain Recognized
Derivatives in Fair Value Hedging	Location of Gain Recognized in	in Income on Derivatives
Relationships	Income on Derivatives	June 30, 2012		June 30, 2011
Interest rate risk activities	Interest expense, net	$	0.8	$	9.8
Total		$	0.8	$	9.8

Three Months Ended, (in millions)
		Amount of Loss Recognized
Hedged Item in Fair Value Hedge	Location of Loss Recognized in	in Income on Related Hedged Items
Relationships	Income on Related Hedged Item	June 30, 2012		June 30, 2011
Fixed-rate debt	Interest expense, net	$	(0.8)	$	(9.8)
Total		$	(0.8)	$	(9.8)

Six Months Ended, (in millions)
		Amount of Loss Recognized
Derivatives in Fair Value Hedging	Location of Loss Recognized in	in Income on Derivatives
Relationships	Income on Derivatives	June 30, 2012		June 30, 2011
Interest rate risk activities	Interest expense, net	$	(8.2)	$	(0.4)
Total		$	(8.2)	$	(0.4)

Six Months Ended, (in millions)
		Amount of Gain Recognized
Hedged Item in Fair Value Hedge	Location of Gain Recognized in	in Income on Related Hedged Items
Relationships	Income on Related Hedged Item	June 30, 2012		June 30, 2011
Fixed-rate debt	Interest expense, net	$	8.2	$	0.4
Total		$	8.2	$	0.4

Derivatives not designated as hedging instruments
Three Months Ended, (in millions)
		Amount of Realized/Unrealized Gain
		(Loss) Recognized in Income on
		Derivatives *
Derivatives Not Designated as Hedging	Location of Gain (Loss) Recognized in
Instruments	Income on Derivatives	June 30, 2012		June 30, 2011
Commodity price risk programs	Gas Distribution revenues	$	(0.1)	$	(0.1)
Commodity price risk programs	Other revenues		7.7		7.8
Commodity price risk programs	Cost of Sales		9.6		(4.5)
Total		$	17.2	$	3.2

* For the amounts of realized/unrealized gain (loss) recognized in income on derivatives disclosed in the table above, gainsof $4.7 million and $3.4 million for the three monthsof 2012 and 2011, respectively, were deferred as allowed by regulatory orders. These amounts will be amortized to income over future periods of up to twelve months as specified in a regulatory order.

Six Months Ended, (in millions)
		Amount of Realized/Unrealized Gain
		(Loss) Recognized in Income on
		Derivatives *
Derivatives Not Designated as Hedging	Location of Gain (Loss) Recognized in
Instruments	Income on Derivatives	June 30, 2012		June 30, 2011
Commodity price risk programs	Gas Distribution revenues	$	0.3	$	(21.8)
Commodity price risk programs	Other revenues		6.0		18.4
Commodity price risk programs	Cost of Sales		(11.5)		(7.8)
Total		$	(5.2)	$	(11.2)

* For the amounts of realized/unrealized gain (loss) recognized in income on derivatives disclosed in the table above, losses of $15.1 million and $19.3 million for the six months of 2012 and 2011, respectively, were deferred as allowed per regulatory orders. These amounts will be amortized to income over future periods of up to twelve months as specified in a regulatory order.

NiSource's derivative instruments measured at fair value as of June 30, 2012 and December 31, 2011 do not contain any credit-risk-related contingent features.

Certain NiSource affiliates have physical commodity purchase agreements that contain “ratings triggers” that require increases in collateral if the credit rating of NiSource or certain of its affiliates are rated below BBB- by Standard & Poor's or below Baa3 by Moody's. These agreements are primarily for the physical purchase or sale of natural gas and electricity. The collateral requirement from a downgrade below the ratings trigger levels would amount to approximately $1.9 million. In addition to agreements with ratings triggers, there are some agreements that contain “adequate assurance” or “material adverse change” provisions that could result in additional credit support such as letters of credit and cash collateral to transact business.

NiSource had $81.4 million and $158.2 million of cash on deposit with brokers for margin requirements associated with open derivative positions reflected within “Restricted cash” on the Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2012 and December 31, 2011, respectively.

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Pension And Other Postretirement Benefits (Schedule Of Changes In Plan Assets And Projected Benefit Obligations Recognized In Other Comprehensive Income) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Pension Plan [Member]
Less: amortization of prior service cost	$ (0.1)	$ (0.1)	$ (0.2)	$ (0.2)
Other Postretirement Benefits [Member]
Less: amortization of prior service cost	$ 0.1	$ 0.1	$ 0.2	$ 0.2

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Gas in Storage

6 Months Ended

Jun. 30, 2012

Gas in Storage [Abstract]

Gas in Storage

5.        Gas in Storage

Both the LIFO inventory methodology and the weighted average cost methodology are used to value natural gas in storage. Gas Distribution Operations price natural gas storage injections at the average of the costs of natural gas supply purchased during the year. For interim periods, the difference between current projected replacement cost and the LIFO cost for quantities of gas temporarily withdrawn from storage is recorded as a temporary LIFO liquidation credit or debit within the Condensed Consolidated Balance Sheets (unaudited). Due to seasonality requirements, NiSource expects interim variances in LIFO layers to be replenished by year-end. NiSource has a temporary LIFO liquidation debit of $8.9million recorded for thesix months ended June 30,2012 for certain gas distribution companies recorded within “Prepayments and other,” on the Condensed Consolidated Balance Sheets (unaudited).

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Asset Retirement Obligations (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Settlements	$ 1.5	$ 1.1
Reduction in the present value of estimated cash flows	$ 0	$ 2.9

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Quarterly Financial Data (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Quarterly Financial Data [Line Items]
Loss on early extinguishment of debt	$ 0	$ 0

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Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share

3.       Earnings Per Share

Basic EPS is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The weighted average shares outstanding for diluted EPS includes the incremental effects of the various long-term incentive compensation plans and the Forward Agreements(refer to Note 4 “Forward Equity Agreement” for additional information). The calculation of diluted earnings per share excludes out-of-the-money stock options which had an anti-dilutive effect. These options were 1.6million and 3.4million for the three months ended June 30,2012 and 2011, respectively, and 1.7million and 3.4million for the six months ended June 30, 2012 and 2011, respectively. The numerator in calculating both basic and diluted EPS for each period is reported net income. The computation of diluted average common shares follows:

			Three Months Ended		Six Months Ended
			June 30,		June 30,
(in thousands)			2012	2011	2012	2011
Denominator
	Basic average common shares outstanding		284,370	280,217	283,648	279,780
	Dilutive potential common shares
		Stock options	201	-	157	-
		Shares contingently issuable under employee stock plans	284	1,078	270	1,061
		Shares restricted under stock plans	620	342	607	326
		Forward Agreements	10,292	5,422	9,921	4,989
Diluted Average Common Shares			295,767	287,059	294,603	286,156

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Forward Equity Agreement

6 Months Ended

Jun. 30, 2012

Forward Equity Agreement [Abstract]

Forward Equity Agreement [Text Block]

4.       Forward Equity Agreement

On September 14, 2010, NiSource and Credit Suisse Securities (USA) LLC, as forward seller, closed an underwritten registered public offering of 24,265,000 shares of NiSource's common stock. All of the shares sold were borrowed and delivered to the underwriters by the forward seller. NiSource did not receive any of the proceeds from the sale of the borrowed shares, but NiSource will receive proceeds upon settlement of the Forward Agreements referred to below.

In connection with the public offering, NiSource entered into forward sale agreements (“Forward Agreements”) with an affiliate of the forward seller covering an aggregate of 24,265,000 shares of NiSource's common stock. Settlement of the Forward Agreements is expected to occur no later than September 10, 2012. Subject to certain exceptions, NiSource may elect cash or net share settlement for all or a portion of its obligations under the Forward Agreements. Upon any physical settlement of the Forward Agreements, NiSource will deliver shares of its common stock in exchange for cash proceeds at the forward sale price, which initially is $15.9638 and is subject to adjustment as provided in the Forward Agreements. If the equity forward had been settled by delivery of shares atJune 30, 2012, NiSource would have received approximately $345.3 million based on a forward price of $14.2288 for the 24,265,000 shares. NiSource currently anticipates settling the equity forward by delivering shares.

In accordance with ASC 815-40, NiSource has classified the Forward Agreementsas an equity transaction. As a result of this classification, no amounts have been recorded in the Condensed Consolidated Financial Statements (unaudited) as of the six months endedJune 30, 2012 and the year ended December 31, 2011 in connection with the Forward Agreements. The only impact to the Condensed Consolidated Financial Statements (unaudited) is the inclusion of incremental shares within the calculation of fully diluted EPS under the treasury stock method. Refer to Note 3, “Earnings Per Share,” for additional information.

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Discontinued Operations And Assets And Liabilities Held For Sale

6 Months Ended

Jun. 30, 2012

Discontinued Operations And Assets And Liabilities Held For Sale [Abstract]

Discontinued Operations And Assets And Liabilities Held For Sale

6.       Discontinued Operations and Assets and Liabilities Held for Sale

There were no significant assets or liabilities of discontinued operations and held for sale on the Condensed Consolidated Balance Sheets(unaudited) at June 30, 2012 and December 31, 2011.

Results from discontinued operations, which primarily arise fromchanges in estimate for certain liabilities for Columbia Propane and NiSource's former exploration and production subsidiary, CER, are provided in the following table:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2012		2011		2012		2011
Loss from discontinued operations	$	(1.7)	$	(0.8)	$	(1.9)	$	(0.2)
Income tax benefit		(0.6)		(0.2)		(0.7)		-
Loss from Discontinued Operations - net of taxes	$	(1.1)	$	(0.6)	$	(1.2)	$	(0.2)

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Regulatory Matters (Regulatory Liabilities) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Regulatory Liabilities [Line Items]
Less amounts included as Overrecovered gas and fuel cost	$ (84.1)	$ (48.9)

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Variable Interest Entities And Equity Investments (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Schedule of Equity Method Investments [Line Items]
Ownership percentage in housing real estate investment	99.00%
Variable interest entity, net investment	$ 0.2
Variable interest entity, net assets	6.6
Variable interest entity, current assets	0.3
Variable interest entity, non current assets	6.3
Variable interest entity, long term debt	5.5
Variable interest entity, assets restricted to settle the obligations of the entity	0.4
Variable interest entity, contract period (in years)	20
Contributions to equity investees	7.6	0.1
Payments made to Pure Air	$ 10.7	$ 10.1

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Risk Management And Energy Marketing Activities (Commodity Price Risk Program Derivative Contracted Gross Volumes) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2012		Dec. 31, 2011
Gas Price Volatility Program [Member]
Derivative [Line Items]
Commodity price risk program derivative contracted gross volumes, MMDth	$ 31.5		$ 26.1
Price Protection Service Program [Member]
Derivative [Line Items]
Commodity price risk program derivative contracted gross volumes, MMDth	0.4		1.0
DependaBill Program [Member]
Derivative [Line Items]
Commodity price risk program derivative contracted gross volumes, MMDth	0.3		0.3
Regulatory Incentive Program [Member]
Derivative [Line Items]
Commodity price risk program derivative contracted gross volumes, MMDth	0		0.9
Gas Marketing Program [Member]
Derivative [Line Items]
Commodity price risk program derivative contracted gross volumes, MMDth	13.8	[1]	28.5	[1]
Basis contract volumes, MMDth	14.1		15.9
Gas Marketing Forward Physical Derivatives [Member]
Derivative [Line Items]
Commodity price risk program derivative contracted gross volumes, MMDth	13.8	[2]	27.1	[2]
Basis contract volumes, MMDth	14.5		29.9
Electric Energy Program [Member]
Derivative [Line Items]
Commodity price risk program derivative contracted gross volumes, MMDth	$ 17,686.2	[3]	$ 8,578.5	[3]

[1] Basis contract volumes not included in the above table were 14.1 MMDth and 15.9 MMDth as of June 30, 2012 and December 31, 2011, respectively.

[2] Basis contract volumes not included in the above table were 14.5 MMDth and 29.9 MMDth as of June 30, 2012 and December 31, 2011, respectively.

[3] Megawatt hours reported in thousands

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Condensed Financial Information Of Registrant (Statement Of Income) (Details) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Equity in net earnings of consolidated subsidiaries	$ 8.5	$ 2.3	$ 16.2	$ 5.3
Interest expense	103.2	94.4	206.5	184.2
Other, net	2.8	0.6	3.1	3.9
Total Other income (deductions)	(100.4)	(93.8)	(203.4)	(180.3)
Income from continuing operations before income taxes	108.2	71.7	404.6	391.6
Income taxes	37.7	30.9	140.6	141.7
Income from continuing operations	70.5	40.8	264.0	249.9
Loss from Discontinued Operations - net of taxes	(1.1)	(0.6)	(1.2)	(0.2)
Gain (Loss) on Disposition of Discontinued Operations - net of taxes	0	0	0	0
NET INCOME	$ 69.4	$ 40.2	$ 262.8	$ 249.7
Average common shares outstanding	284,370	280,217	283,648	279,780
Diluted average common shares	295,767	287,059	294,603	286,156
Basic Earnings (Loss) Per Share, Continuing Operations	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Discontinued operations	$ 0	$ 0	$ 0	$ 0
Basic earnings per share	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Continuing operations	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Discontinued operations	$ 0	$ 0	$ 0	$ 0
Diluted earnings per share	$ 0.23	$ 0.14	$ 0.89	$ 0.87

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Regulatory Matters (Regulatory Assets) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Regulatory Assets [Line Items]
Less amounts included as Underrecovered gas and fuel cost	$ (1.9)	$ (20.7)

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Share-Based Compensation (Schedule Of Transactions Of Contingent Awards) (Details) (Contingent Stock Units [Member])	6 Months Ended
	Jun. 30, 2012
Contingent Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Other Than Options	749,601

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Basis Of Accounting Presentation (Tables)

6 Months Ended

Jun. 30, 2012

Basis Of Accounting Presentation [Abstract]

Correcting Adjustments To Net Income

		Three Months Ended		Six Months Ended
Increase/(Decrease) in Net Income (in millions)		June 30, 2011		June 30, 2011
Previously reported Net Income		$	38.9	$	244.1
	Deferred revenue		-		(0.6)
	Environmental asset recovery		-		8.0
	OPEB over-reimbursement		(0.2)		(0.4)
	OPEB regulatory asset		2.4		2.4
	Total corrections		2.2		9.4
	Income taxes		0.9		3.8
Corrected Net Income		$	40.2	$	249.7

Correcting Adjustments To Consolidated Income

Condensed Statements of Consolidated Income (unaudited)
		Three Months Ended				Six Months Ended
		June 30, 2011				June 30, 2011
		As Previously				As Previously
(in millions, except per share amounts)		Reported		As Corrected		Reported		As Corrected
Net Revenues
	Electric	$	349.2	$	349.2	$	696.3	$	695.7
Gross Revenues			1,228.3		1,228.3		3,460.5		3,459.9
Total Net Revenues			765.8		765.8		1,827.1		1,826.5
	Operation and maintenance		402.5		400.3		835.0		829.6
	Depreciation and amortization		134.5		134.5		273.4		268.8
Total Operating Expenses			604.8		602.6		1,269.9		1,259.9
Operating Income			163.3		165.5		562.5		571.9
Income from Continuing Operations before Income Taxes			69.5		71.7		382.2		391.6
Income Taxes			30.0		30.9		137.9		141.7
Income from Continuing Operations			39.5		40.8		244.3		249.9
Net Income		$	38.9	$	40.2	$	244.1	$	249.7
Basic Earnings Per Share ($)
	Continuing operations	$	0.14	$	0.14	$	0.87	$	0.89
Basic Earnings Per Share		$	0.14	$	0.14	$	0.87	$	0.89
Diluted Earnings Per Share ($)
	Continuing operations	$	0.14	$	0.14	$	0.85	$	0.87
Diluted Earnings Per Share		$	0.14	$	0.14	$	0.85	$	0.87

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Nature Of Operations And Summary Of Significant Accounting Policies (Correcting Adjustments To Cash Flows) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Basis Of Accounting Presentation [Line Items]
Net Income	$ 69.4	$ 40.2	$ 262.8	$ 249.7
Depreciation and amortization	148.0	134.5	294.1	268.8
Deferred income taxes and investment tax credits			129.0	135.9
(Under) Overrecovered gas and fuel costs			54.1	221.3
Other accruals			(92.8)	(26.3)
Regulatory assets/liabilities			7.3	23.4
Previously Reported [Member]
Basis Of Accounting Presentation [Line Items]
Net Income		38.9		244.1
Depreciation and amortization		134.5		273.4
Corrected [Member]
Basis Of Accounting Presentation [Line Items]
Net Income		40.2		249.7
Depreciation and amortization		$ 134.5		$ 268.8

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Transfers Of Financial Assets

6 Months Ended

Jun. 30, 2012

Transfers Of Financial Assets [Abstract]

Transfers Of Financial Assets

11.       Transfers of Financial Assets

Transfers of accounts receivable are accounted for as secured borrowings resulting in the recognition of short-term borrowings on the Condensed Consolidated Balance Sheets (unaudited). The maximum amount of debt that can be recognized related to NiSource's accounts receivable programs is $515 million.

All accounts receivable sold to the commercial paper conduits are valued at face value, which approximate fair value due to their short-term nature. The amount of the undivided percentage ownership interest in the accounts receivable sold is determined in part by required loss reserves under the agreements. Below is information about the accounts receivable securitization agreements entered into by NiSource's subsidiaries.

On October 23, 2009, Columbia of Ohio entered into an agreement to sell, without recourse, substantially all of its trade receivables, as they originate, to CGORC, a wholly-owned subsidiary of Columbia of Ohio. CGORC, in turn, is party to an agreement with BTMU and RBS, also dated October 23, 2009, under the terms of which it sells an undivided percentage ownership interest in its accounts receivable to commercial paper conduits sponsored by BTMU and RBS. On October 21, 2011, the agreement was renewed with an amendment increasing the maximum seasonal program limit from $200 million to $240 million. The amended agreement expires on October 19, 2012, and can be renewed if mutually agreed to by all parties. As of June 30, 2012, $77.1million of accounts receivable had been transferred by CGORC. CGORC is a separate corporate entity from NiSource and Columbia of Ohio, with its own separate obligations, and upon a liquidation of CGORC, CGORC's obligations must be satisfied out of CGORC's assets prior to any value becoming available to CGORC's stockholder.Under the agreement, an event of termination occurs if NiSource's debt rating is withdrawn by either Standard & Poor's or Moody's, or falls below BB- or Ba3 at either Standard & Poor's or Moody's, respectively.

On October 23, 2009, Northern Indiana entered into an agreement to sell, without recourse, substantially all of its trade receivables, as they originate, to NARC, a wholly-owned subsidiary of Northern Indiana. NARC, in turn, is party to an agreement with RBS, also dated October 23, 2009, under the terms of which it sells an undivided percentage ownership interest in its accounts receivable to a commercial paper conduit sponsored by RBS. The maximum seasonal program limit under the terms of the agreement is $200 million. On August 31, 2011, the agreement was renewed, having a new scheduled termination date of August 29, 2012, and can be further renewed if mutually agreed to by both parties.As of June 30, 2012, $106.1 million of accounts receivable had been transferred by NARC. NARC is a separate corporate entity from NiSource and Northern Indiana, with its own separate obligations, and upon a liquidation of NARC, NARC's obligations must be satisfied out of NARC's assets prior to any value becoming available to NARC's stockholder. Under the agreement, an event of termination occurs if Northern Indiana's debt rating is withdrawn by either Standard & Poor's or Moody's, or falls below BB or Ba2 at either Standard & Poor's or Moody's, respectively.

On March 15, 2010, Columbia of Pennsylvania entered into an agreement to sell, without recourse, substantially all of its trade receivables, as they originate, to CPRC, a wholly-owned subsidiary of Columbia of Pennsylvania. CPRC, in turn, is party to an agreement with BTMU, also dated March 15, 2010, under the terms of which it sells an undivided percentage ownership interest in its accounts receivable to a commercial paper conduit sponsored by BTMU. The maximum seasonal program limit under the terms of the agreement is $75 million. On March 13, 2012, the agreement was renewed, having a new scheduled termination date of March 12, 2013, and can be further renewed if mutually agreed to by both parties. As of June 30, 2012, $10.0million of accounts receivable had been transferred by CPRC. CPRC is a separate corporate entity from NiSource and Columbia of Pennsylvania, with its own separate obligations, and upon a liquidation of CPRC, CPRC's obligations must be satisfied out of CPRC's assets prior to any value becoming available to CPRC's stockholder. Under the agreement, an event of termination occurs if NiSource's debt rating is withdrawn by either Standard & Poor's or Moody's, or falls below BB- or Ba3 at either Standard & Poor's or Moody's, respectively.

The following table reflects the gross and net receivables transferred as well as short-term borrowings related to the securitization transactions as of June 30,2012 and December 31,2011 for Columbia of Ohio, Northern Indiana and Columbia of Pennsylvania:

(in millions)	June 30, 2012		December 31, 2011
Gross Receivables	$	335.6	$	510.5
Less: Receivables not transferred		142.4		278.8
Net receivables transferred	$	193.2	$	231.7
Short-term debt due to asset securitization	$	193.2	$	231.7

For the three months ended June 30, 2012 and 2011, $0.9million and $0.8million of fees associated with the securitization transactions were recorded as interest expense, respectively. For the six months ended June 30, 2012 and 2011, $2.0 million and $2.3 million of fees associated with the securitization transactions were recorded as interest expense, respectively. Columbia of Ohio, Northern Indiana and Columbia of Pennsylvania remain responsible for collecting on the receivables securitized and the receivables cannot be sold to another party.

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Long-Term Debt

6 Months Ended

Jun. 30, 2012

Long-Term Debt [Abstract]

Long-Term Debt

16.       Long-Term Debt

On June 14, 2012, NiSource Finance issued $250.0 million of 3.85% senior unsecured notes that mature on February 15, 2023 and $500.0 million of 5.25% senior unsecured notes that mature on February 15, 2043.

On April 5, 2012, NiSource Finance negotiated a $250.0 million three-year bank term loan with a syndicate of banks which matures on April 3, 2015. Borrowings under the term loan will have an effective cost of LIBOR plus 137 basis points.

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Accumulated Other Comprehensive Loss (Narrative) (Details) (USD $) In Millions, unless otherwise specified				3 Months Ended	12 Months Ended
	Apr. 05, 2012	Sep. 16, 2005	Jul. 22, 2003	Jun. 30, 2012 Millennium Pipeline Company, L.L.C [Member]	Dec. 31, 2011 Millennium Pipeline Company, L.L.C [Member]
Accumulated Other Comprehensive Loss [Line Items]
Notional amount of interest rate swap agreements		$ 900.0	$ 500.0
Refinancing of long-term debt	250.0	1,000.0
Debt instrument maturity date				Jun. 01, 2025
Unrealized loss, net of tax				$ 19.2	$ 19.7

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Basis of Accounting Presentation (Correcting Adjustments to Consolidated Income) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Basis Of Accounting Presentation [Line Items]
Electric	$ 377.1	$ 349.2	$ 729.7	$ 695.7
Gross Revenues	1,048.7	1,228.3	2,707.4	3,459.9
Total Net Revenues	807.6	765.8	1,836.0	1,826.5
Operation and maintenance	394.3	400.3	799.7	829.6
Depreciation and amortization	148.0	134.5	294.1	268.8
Total Operating Expenses	607.5	602.6	1,244.2	1,259.9
Operating Income	208.6	165.5	608.0	571.9
Income from continuing operations before income taxes	108.2	71.7	404.6	391.6
Income Taxes	37.7	30.9	140.6	141.7
Income from Continuing Operations	70.5	40.8	264.0	249.9
Net Income	69.4	40.2	262.8	249.7
Basic Earnings (Loss) Per Share, Continuing Operations	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Earnings Per Share, Basic	$ 0.25	$ 0.14	$ 0.93	$ 0.89
Continuing operations	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Earnings Per Share, Diluted	$ 0.23	$ 0.14	$ 0.89	$ 0.87
Previously Reported [Member]
Basis Of Accounting Presentation [Line Items]
Electric		349.2		696.3
Gross Revenues		1,228.3		3,460.5
Total Net Revenues		765.8		1,827.1
Operation and maintenance		402.5		835.0
Depreciation and amortization		134.5		273.4
Total Operating Expenses		604.8		1,269.9
Operating Income		163.3		562.5
Income from continuing operations before income taxes		69.5		382.2
Income Taxes		30.0		137.9
Income from Continuing Operations		39.5		244.3
Net Income		38.9		244.1
Basic Earnings (Loss) Per Share, Continuing Operations		$ 0.14		$ 0.87
Earnings Per Share, Basic		$ 0.14		$ 0.87
Continuing operations		$ 0.14		$ 0.85
Earnings Per Share, Diluted		$ 0.14		$ 0.85
Corrected [Member]
Basis Of Accounting Presentation [Line Items]
Electric		349.2		695.7
Gross Revenues		1,228.3		3,459.9
Total Net Revenues		765.8		1,826.5
Operation and maintenance		400.3		829.6
Depreciation and amortization		134.5		268.8
Total Operating Expenses		602.6		1,259.9
Operating Income		165.5		571.9
Income from continuing operations before income taxes		71.7		391.6
Income Taxes		30.9		141.7
Income from Continuing Operations		40.8		249.9
Net Income		$ 40.2		$ 249.7
Basic Earnings (Loss) Per Share, Continuing Operations		$ 0.14		$ 0.89
Earnings Per Share, Basic		$ 0.14		$ 0.89
Continuing operations		$ 0.14		$ 0.87
Earnings Per Share, Diluted		$ 0.14		$ 0.87

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Other, Net (Schedule Of Other Net) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Other, Net [Abstract]
Total Other, net	$ 2.8	$ 0.6	$ 3.1	$ 3.9

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Pension And Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2012

Pension And Other Postretirement Benefits [Abstract]

Components Of The Plans' Net Periodic Benefits Cost

		Pension Benefits				Other Postretirement Benefits
Three Months Ended June 30, (in millions)		2012		2011		2012		2011
Components of Net Periodic Benefit Cost
	Service cost	$	9.4	$	9.4	$	2.8	$	2.5
	Interest cost		28.2		29.9		9.3		9.6
	Expected return on assets		(41.1)		(41.8)		(6.7)		(6.7)
	Amortization of transition obligation		-		-		0.3		0.3
	Amortization of prior service cost		0.1		0.1		(0.1)		(0.1)
	Recognized actuarial loss		20.3		13.9		2.4		1.7
Total Net Periodic Benefit Costs		$	16.9	$	11.5	$	8.0	$	7.3

		Pension Benefits				Other Postretirement Benefits
Six Months Ended June 30, (in millions)		2012		2011		2012		2011
Components of Net Periodic Benefit Cost
	Service cost	$	18.8	$	18.8	$	5.6	$	5.0
	Interest cost		56.4		59.8		18.6		19.2
	Expected return on assets		(82.2)		(83.6)		(13.4)		(13.4)
	Amortization of transition obligation		-		-		0.6		0.6
	Amortization of prior service cost		0.2		0.2		(0.2)		(0.2)
	Recognized actuarial loss		40.6		27.8		4.8		3.4
Total Net Periodic Benefit Costs		$	33.8	$	23.0	$	16.0	$	14.6

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Interest Expense, Net (Schedule Of Interest Expense, Net) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Interest Expense, Net [Abstract]
Total Interest Expense, net	$ 103.2	$ 94.4	$ 206.5	$ 184.2

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Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Property, Plant and Equipment
Utility Plant	$ 20,888.6	$ 20,337.8
Accumulated depreciation and amortization	(8,882.8)	(8,670.2)
Net utility plant	12,005.8	11,667.6
Other property, at cost, less accumulated depreciation	143.2	132.5
Net Property, Plant and Equipment	12,149.0	11,800.1
Investments and Other Assets
Assets of discontinued operations and assets held for sale	0.2	0.2
Unconsolidated affiliates	211.5	204.7
Other investments	156.8	150.9
Total Investments and Other Assets	368.5	355.8
Current Assets
Cash and cash equivalents	52.8	11.5
Restricted cash	85.0	160.6
Accounts receivable (less reserve of $30.5 and $37.4, respectively)	553.3	854.8
Income tax receivable	0.7	0.9
Gas inventory	252.9	427.6
Underrecovered gas and fuel costs	1.9	20.7
Materials and supplies, at average cost	99.5	87.6
Electric production fuel, at average cost	75.7	50.9
Price risk management assets	120.0	137.2
Exchange gas receivable	42.7	64.9
Regulatory assets	192.9	169.7
Prepayments and other	274.2	261.8
Total Current Assets	1,751.6	2,248.2
Other Assets
Price risk management assets	90.3	188.7
Regulatory assets	1,899.2	1,978.2
Goodwill	3,677.3	3,677.3
Intangible assets	292.1	297.6
Postretirement and postemployment benefits assets	38.3	31.5
Deferred charges and other	143.1	130.9
Total Other Assets	6,140.3	6,304.2
Total Assets	20,409.4	20,708.3
Common Stockholders' Equity
Common stock - $0.01 par value, 400,000,000 shares authorized; 281,853,571 and 278,855,291 shares issued and outstanding, respectively	2.9	2.8
Additional paid-in capital	4,221.0	4,167.7
Retained earnings	980.9	917.0
Accumulated other comprehensive loss	(59.0)	(59.7)
Treasury stock	(40.5)	(30.5)
Total Common Stockholders' Equity	5,105.3	4,997.3
Long-term debt, excluding amounts due within one year	6,806.9	6,267.1
Total Capitalization	11,912.2	11,264.4
Current Liabilities
Current portion of long-term debt	766.9	327.3
Short-term borrowings	327.6	1,359.4
Accounts payable	292.1	434.8
Dividends payable	68.3	0
Customer deposits and credits	201.8	313.6
Taxes accrued	185.5	220.9
Interest accrued	116.6	111.9
Overrecovered gas and fuel costs	84.1	48.9
Price risk management liabilities	132.7	167.8
Exchange gas payable	101.4	168.2
Deferred revenue	10.0	10.1
Regulatory liabilities	93.3	112.0
Accrued liability for postretirement and postemployment benefits	26.6	26.6
Legal and environmental reserves	35.6	43.9
Other accruals	219.8	301.0
Total Current Liabilities	2,662.3	3,646.4
Other Liabilities and Deferred Credits
Price risk management liabilities	45.6	138.9
Deferred income taxes	2,730.5	2,541.9
Deferred investment tax credits	26.9	29.0
Deferred credits	85.0	78.9
Accrued liability for postretirement and postemployment benefits	939.4	953.8
Regulatory liabilities and other removal costs	1,615.7	1,663.9
Asset retirement obligations	149.7	146.4
Other noncurrent liabilities	242.1	244.7
Total Other Liabilities and Deferred Credits	5,834.9	5,797.5
Commitments and Contingencies (Refer to Note 20)	0	0
Total Capitalization and Liabilities	$ 20,409.4	$ 20,708.3

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Short-Term Borrowings (Narrative) (Details) (USD $) In Millions, unless otherwise specified					6 Months Ended	0 Months Ended	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2012 Letters Of Credit [Member]	Dec. 31, 2011 Letters Of Credit [Member]	Jun. 30, 2012 Unsecured Revolving Credit Facility [Member]	Mar. 03, 2015 Four-Year Revolving Credit Facility [Member]	Jun. 30, 2012 Four-Year Revolving Credit Facility [Member]	Dec. 31, 2011 Four-Year Revolving Credit Facility [Member]	Mar. 03, 2011 Four-Year Revolving Credit Facility [Member]	Jun. 30, 2011 Commercial Paper [Member]	Jun. 30, 2012 NiSource Finance [Member]	Dec. 31, 2011 NiSource Finance [Member]
Short-term Debt [Line Items]
Commercial paper outstanding	$ 134.4	$ 402.7									$ 134.4
Revolving credit facility									1,500	500
Letters of credit amount outstanding	0	725.0	37.5	37.5			19.2	19.2
Revolving credit facility, termination date					May 2017	May 15, 2017	May 15, 2017
Accounts receivable securitization facility borrowings	193.2	231.7									193.2	231.7
Total short-term borrowings	$ 327.6	$ 1,359.4

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Statements Of Consolidated Common Stockholders' Equity And Comprehensive Income (Loss) (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Statements Of Consolidated Common Stockholders' Equity And Comprehensive Income (Loss) [Abstract]
Unrealized (loss) gain on available-for-sale securities, tax	$ 0.2	$ 0.7	$ 1.8	$ 0.5
Unrealized (losses) gains on derivatives, net	0.6	0.4	1.2	1.1
Unrealized gain on cash flow hedging	0.2	0.2	0.5	0.4
Unrecognized pension benefit and OPEB costs, tax	$ 0.3	$ 0.3	$ 0.8	$ 0.7

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Discontinued Operations And Assets And Liabilities Held For Sale (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain (loss) on Disposition of discontinued operations-net of taxes	$ 0	$ 0	$ 0	$ 0
Loss from Discontinued Operations - net of taxes	$ (1.1)	$ (0.6)	$ (1.2)	$ (0.2)

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Pension And Other Postretirement Benefits (Schedule Of Reconciliation Of The Plans Funded Status And Amounts Reflected) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	$ 28.2	$ 29.9	$ 56.4	$ 59.8
Employer contributions			1.6
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	9.3	9.6	18.6	19.2
Employer contributions			$ 23.3

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Impairments, Restructuring And Other Charges (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Impairments Restructuring And Other Charges [Line Items]
Impairment charge	$ 0	$ 0.7

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Fair Value Disclosures (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended		12 Months Ended	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 Government [Member]	Jun. 30, 2011 Government [Member]	Jun. 30, 2012 Government [Member]	Jun. 30, 2011 Government [Member]	Jun. 30, 2012 Corporate/Other Bonds [Member]	Jun. 30, 2011 Corporate/Other Bonds [Member]	Jun. 30, 2012 Corporate/Other Bonds [Member]	Jun. 30, 2011 Corporate/Other Bonds [Member]	Dec. 31, 2012 Significant Unobservable Inputs (Level 3) [Member]
Fair Value Disclosure [Line Items]
Fair value reserve recorded on certain assets related to the wind down of the regulated natural gas marketing business	$ 0		$ 22.6									$ 22.6
Net realized gain on available for sale debt securities				0.2	0.2	0.2	0.3	0	0.5	0.1	1.0
Available-for-sale securities, maturities of less than a year				0		0		3.1		3.1
Impairment charge	$ 0	$ 0.7

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Short-Term Borrowings

6 Months Ended

Jun. 30, 2012

Short-Term Borrowings [Abstract]

Short-Term Borrowings

17.       Short-Term Borrowings

During June 2011, NiSource Finance implemented a new commercial paper program with a program limit of up to $500.0 million with a dealer group comprised of Barclays, Citigroup, Credit Suisse and Wells Fargo. Commercial paper issuances are supported by available capacity under NiSource's $1.5 billion unsecured revolving credit facility, which expires in May 2017. At June 30, 2012, NiSource had $134.4million of commercial paper outstanding.

During May 2012, NiSource Finance amended its existing $1.5 billion revolving credit facility with a syndicate of banks led by Barclays Capital extending the termination date toMay15, 2017also reducing the borrowing costs under the facility. The purpose of the facility is to fund ongoing working capital requirements including the provision of liquidity support for NiSource's commercial paper program, provide for issuance of letters of credit, and also for general corporate purposes. At June 30, 2012, NiSource had nooutstanding borrowings under this facility.

As of June 30, 2012and December 31,2011, NiSource had$37.5millionof stand-by letters of credit outstanding,of which $19.2 million were under the revolving credit facility.

Transfers of accounts receivable are accounted for as secured borrowings resulting in the recognition of short-term debt on the Condensed Consolidated Balance Sheet in the amount of $193.2million and $231.7million as ofJune 30, 2012and December 31, 2011, respectively. Refer to Note 11, “Transfers of Financial Assets,” for additional information.

	June 30,		December 31,
(in millions)	2012		2011
Commercial Paper weighted average interest rate of 1.16% and 1.01% at June 30, 2012 and December 31, 2011, respectively.	$	134.4	$	402.7
Credit facilities borrowings weighted average interest rate of 1.99% at December 31, 2011.		-		725.0
Accounts receivable securitization facility borrowings		193.2		231.7
Total short-term borrowings	$	327.6	$	1,359.4

Given their turnover is less than 90 days, cash flows related to the borrowings and repayments of the items listed above are presented net in the Condensed Statements of Consolidated Cash Flows (unaudited).

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Transfers Of Financial Assets (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended				6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 Columbia Gas Of Ohio Receivables Corporation [Member]	Jun. 30, 2012 Nipsco Accounts Receivable Corporation [Member]	Jun. 30, 2012 Columbia Gas Of Pennsylvania Receivables Corporation [Member]	Jun. 30, 2012 Maximum [Member] Accounts Receivable Program [Member]	Oct. 21, 2011 Maximum [Member] Columbia Gas Of Ohio Receivables Corporation [Member]	Oct. 23, 2009 Maximum [Member] Columbia Gas Of Ohio Receivables Corporation [Member]	Oct. 23, 2009 Maximum [Member] Nipsco Accounts Receivable Corporation [Member]	Mar. 15, 2010 Maximum [Member] Columbia Gas Of Pennsylvania Receivables Corporation [Member]
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Carrying amount of trade receivables transferred							$ 106.1	$ 10.0
Accounts receivable securitization facility borrowings	193.2		193.2		231.7				515.0
Trade receivables, seasonal program maximum						77.1				240.0	200.0	200.0	75.0
Net receivables transferred	193.2		193.2		231.7
Securitization transaction fees	0.9	0.8	2.0	2.3
Commercial paper	$ 134.4		$ 134.4		$ 402.7

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Risk Management And Energy Marketing Activities (Tables)

6 Months Ended

Jun. 30, 2012

Risk Management And Energy Marketing Activities [Abstract]

Commodity Price Risk Program Derivative Contracted Gross Volumes

		June 30, 2012	December 31, 2011
Commodity Price Risk Program:
	Gas price volatility program derivatives (MMDth)	31.5	26.1
	Price Protection Service program derivatives (MMDth)	0.4	1.0
	DependaBill program derivatives (MMDth)	0.3	0.3
	Regulatory incentive program derivatives (MMDth)	-	0.9
	Gas marketing program derivatives (MMDth)(1)	13.8	28.5
	Gas marketing forward physical derivatives (MMDth)(2)	13.8	27.1
	Electric energy program FTR derivatives (mw)(3)	17,686.2	8,578.5
(1)Basis contract volumes not included in the above table were 14.1 MMDth and 15.9 MMDth as of June 30, 2012 and December 31, 2011, respectively.
(2)Basis contract volumes not included in the above table were 14.5 MMDth and 29.9 MMDth as of June 30, 2012 and December 31, 2011, respectively.
(3)Megawatt hours reported in thousands

Location And Fair Value Of Derivative Instruments On Consolidated Balance Sheets

			June 30,		December 31,
Asset Derivatives (in millions)			2012		2011
		Balance Sheet Location	Fair Value		Fair Value (1)
Derivatives designated as hedging instruments
	Interest rate risk activities
		Price risk management assets (current)	$	-	$	-
		Price risk management assets (noncurrent)		48.5		56.7
Total derivatives designated as hedging instruments			$	48.5	$	56.7
Derivatives not designated as hedging instruments
	Commodity price risk programs
		Price risk management assets (current)	$	120.0	$	141.8
		Price risk management assets (noncurrent)		41.8		150.0
Total derivatives not designated as hedging instruments			$	161.8	$	291.8
Total Asset Derivatives			$	210.3	$	348.5
(1)During the fourth quarter of 2011, NiSource recorded reserves of $22.6 million ($4.6 million current and $18.0 million noncurrent) on certain commodity price risk assets related to the wind down of the unregulated natural gas marketing business. As of June 30, 2012, NiSource has fully reversed these reserves as all contracts have been settled. The non-designated price risk asset amounts above are shown gross and have not been adjusted for the reserves.
			June 30,		December 31,
Liability Derivatives (in millions)			2012		2011
		Balance Sheet Location	Fair Value		Fair Value
Derivatives designated as hedging instruments
	Commodity price risk programs
		Price risk management liabilities (current)	$	-	$	0.4
		Price risk management liabilities (noncurrent)		-		0.1
Total derivatives designated as hedging instruments			$	-	$	0.5
Derivatives not designated as hedging instruments
	Commodity price risk programs
		Price risk management liabilities (current)	$	132.7	$	167.4
		Price risk management liabilities (noncurrent)		45.6		138.8
Total derivatives not designated as hedging instruments			$	178.3	$	306.2
Total Liability Derivatives			$	178.3	$	306.7

The Effect Of Derivative Instruments On The Statements Of Consolidated Income

Three Months Ended, (in millions):
	Amount of Gain					Amount of (Loss) Gain
	Recognized in OCI on					Reclassified from AOCI
	Derivative (Effective				Location of Gain (Loss)	into Income (Effective
	Portion)				Reclassified from AOCI	Portion)
Derivatives in Cash Flow	June 30,		June 30,		into Income (Effective	June 30,		June 30,
Hedging Relationships	2012		2011		Portion)	2012		2011
Commodity price risk programs	$	0.3	$	-	Cost of Sales	$	(0.2)	$	0.2
Interest rate risk activities		0.4		0.4	Interest expense, net		(0.7)		(0.7)
Total	$	0.7	$	0.4		$	(0.9)	$	(0.5)

Six Months Ended (in millions):
	Amount of Gain					Amount of Gain (Loss)
	Recognized in OCI on					Reclassified from AOCI
	Derivative (Effective				Location of Gain (Loss)	into Income (Effective
	Portion)				Reclassified from AOCI	Portion)
Derivatives in Cash Flow	June 30,		June 30,		into Income (Effective	June 30,		June 30,
Hedging Relationships	2012		2011		Portion)	2012		2011
Commodity price risk programs	$	0.6	$	0.5	Cost of Sales	$	(0.8)	$	0.8
Interest rate risk activities		0.8		0.8	Interest expense, net		(1.3)		(1.3)
Total	$	1.4	$	1.3		$	(2.1)	$	(0.5)

The Effect Of Derivative Instruments Reclassified To Statements Of Consolidated Income

Three Months Ended, (in millions):
		Amount of Gain (Loss) Recognized
		in Income on Derivative
	Location of Gain (Loss)	(Ineffective Portion and Amount
	Recognized in Income on	Excluded from Effectiveness
	Derivative (Ineffective Portion	Testing)
Derivatives in Cash Flow Hedging	and Amount Excluded from
Relationships	Effectiveness Testing)	June 30, 2012		June 30, 2011
Commodity price risk programs	Cost of Sales	$	-	$	-
Interest rate risk activities	Interest expense, net		-		-
Total		$	-	$	-

Six Months Ended, (in millions)
		Amount of Gain (Loss) Recognized
		in Income on Derivative
	Location of Gain (Loss)	(Ineffective Portion and Amount
	Recognized in Income on	Excluded from Effectiveness
	Derivative (Ineffective Portion	Testing)
Derivatives in Cash Flow Hedging	and Amount Excluded from
Relationships	Effectiveness Testing)	June 30, 2012		June 30, 2011
Commodity price risk programs	Cost of Sales	$	-	$	-
Interest rate risk activities	Interest expense, net		-		-
Total		$	-	$	-

Derivatives in Fair Value Hedging Relationships
Three Months Ended, (in millions)
		Amount of Gain Recognized
Derivatives in Fair Value Hedging	Location of Gain Recognized in	in Income on Derivatives
Relationships	Income on Derivatives	June 30, 2012		June 30, 2011
Interest rate risk activities	Interest expense, net	$	0.8	$	9.8
Total		$	0.8	$	9.8

Three Months Ended, (in millions)
		Amount of Loss Recognized
Hedged Item in Fair Value Hedge	Location of Loss Recognized in	in Income on Related Hedged Items
Relationships	Income on Related Hedged Item	June 30, 2012		June 30, 2011
Fixed-rate debt	Interest expense, net	$	(0.8)	$	(9.8)
Total		$	(0.8)	$	(9.8)

Six Months Ended, (in millions)
		Amount of Loss Recognized
Derivatives in Fair Value Hedging	Location of Loss Recognized in	in Income on Derivatives
Relationships	Income on Derivatives	June 30, 2012		June 30, 2011
Interest rate risk activities	Interest expense, net	$	(8.2)	$	(0.4)
Total		$	(8.2)	$	(0.4)

Six Months Ended, (in millions)
		Amount of Gain Recognized
Hedged Item in Fair Value Hedge	Location of Gain Recognized in	in Income on Related Hedged Items
Relationships	Income on Related Hedged Item	June 30, 2012		June 30, 2011
Fixed-rate debt	Interest expense, net	$	8.2	$	0.4
Total		$	8.2	$	0.4

Derivatives not designated as hedging instruments
Three Months Ended, (in millions)
		Amount of Realized/Unrealized Gain
		(Loss) Recognized in Income on
		Derivatives *
Derivatives Not Designated as Hedging	Location of Gain (Loss) Recognized in
Instruments	Income on Derivatives	June 30, 2012		June 30, 2011
Commodity price risk programs	Gas Distribution revenues	$	(0.1)	$	(0.1)
Commodity price risk programs	Other revenues		7.7		7.8
Commodity price risk programs	Cost of Sales		9.6		(4.5)
Total		$	17.2	$	3.2

Six Months Ended, (in millions)
		Amount of Realized/Unrealized Gain
		(Loss) Recognized in Income on
		Derivatives *
Derivatives Not Designated as Hedging	Location of Gain (Loss) Recognized in
Instruments	Income on Derivatives	June 30, 2012		June 30, 2011
Commodity price risk programs	Gas Distribution revenues	$	0.3	$	(21.8)
Commodity price risk programs	Other revenues		6.0		18.4
Commodity price risk programs	Cost of Sales		(11.5)		(7.8)
Total		$	(5.2)	$	(11.2)

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Fair Value Disclosures

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures

10.       Fair Value Disclosures

• Fair Value Measurements.

Recurring Fair Value Measurements.The following tables present financial assets and liabilities measured and recorded at fair value on NiSource's Condensed Consolidated Balance Sheets(unaudited) on a recurring basis and their level within the fair value hierarchy as of June 30, 2012 and December 31, 2011:

		Quoted Prices in		Significant
		Active Markets		Other		Significant
		for Identical		Observable		Unobservable
Recurring Fair Value Measurements		Assets		Inputs		Inputs		Balance as of
June 30, 2012 (in millions)		(Level 1)		(Level 2)		(Level 3)		June 30, 2012
Assets
Commodity Price risk management assets:
	Physical price risk programs	$	-	$	55.9	$	-	$	55.9
	Financial price risk programs		104.4		1.5		-		105.9
Interest rate risk activities			-		48.5		-		48.5
Available-for-sale securities			30.7		69.3		-		100.0
Total		$	135.1	$	175.2	$	-	$	310.3
Liabilities
Commodity Price risk management liabilities:
	Physical price risk programs	$	-	$	0.5	$	-	$	0.5
	Financial price risk programs		176.5		1.0		0.3		177.8
	Total	$	176.5	$	1.5	$	0.3	$	178.3

		Quoted Prices in		Significant
		Active Markets		Other		Significant
		for Identical		Observable		Unobservable
Recurring Fair Value Measurements		Assets		Inputs		Inputs		Balance as of
December 31, 2011 (in millions)		(Level 1)		(Level 2)		(Level 3)		December 31, 2011
Assets
Commodity Price risk management assets:
	Physical price risk programs	$	-	$	140.7	$	-	$	140.7
	Financial price risk programs (1)		148.3		2.5		0.3		151.1
Interest rate risk activities			-		56.7		-		56.7
Available-for-sale securities			32.9		63.1		-		96.0
	Total	$	181.2	$	263.0	$	0.3	$	444.5
Liabilities
Commodity Price risk management liabilities:
	Physical price risk programs	$	-	$	3.9	$	-	$	3.9
	Financial price risk programs		301.1		1.7		-		302.8
	Total	$	301.1	$	5.6	$	-	$	306.7
(1)During the fourth quarter of 2011, NiSource recorded a reserve of $22.6 million on certain assets related to the wind down of the unregulated natural gas marketing business. The financial price risk program amount above is shown gross and has not been adjusted for the reserve.

Price risk management assets and liabilities include commodity exchange-traded and non-exchange-based derivative contracts. Exchange-traded derivative contracts are generally based on unadjusted quoted prices in active markets and are classified within Level 1. These financial assets and liabilities are secured with cash on deposit with the exchange; therefore nonperformance risk has not been incorporated into these valuations. Certain non-exchange-traded derivatives are valued using broker or over-the-counter, on-line exchanges. In such cases, these non-exchange-traded derivatives are classified within Level 2. Non-exchange-based derivative instruments include swaps, forwards, and options. In certain instances, these instruments may utilize models to measure fair value. NiSource uses a similar model to value similar instruments. Valuation models utilize various inputs that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, other observable inputs for the asset or liability, and market-corroborated inputs, i.e., inputs derived principally from or corroborated by observable market data by correlation or other means. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. Certain derivatives trade in less active markets with a lower availability of pricing information and models may be utilized in the valuation. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized in Level 3. Credit risk is considered in the fair value calculation of derivative instruments that are not exchange-traded. Credit exposures are adjusted to reflect collateral agreements which reduce exposures. As of June 30, 2012 and 2011, there were no material transfers between fair value hierarchies. Additionally there were no changes in the method or significant assumptions used to estimate the fair value of NiSource's financial instruments.

To determine the fair value of derivatives associated with NiSource's unregulated natural gas marketing business, certain reserves were calculated. These reserves were primarily determined by evaluating the credit worthiness of certain customers, fair value of future cash flows, and the cost of maintaining restricted cash. Refer to Note 9, “Risk Management Activities” for additional information on price risk assets.

Price risk management assets also include fixed-to-floating interest-rate swaps, which are designated as fair value hedges, as a means to achieve NiSource's targeted level of variable-rate debt as a percent of total debt. NiSource uses a calculation of future cash inflows and estimated future outflows related to the swap agreements, which are discounted and netted to determine the current fair value. Additional inputs to the present value calculation include the contract terms, as well as market parameters such as current and projected interest rates and volatility. As they are based on observable data and valuations of similar instruments, the interest-rate swaps are categorized in Level 2 in the fair value hierarchy. Credit risk is considered in the fair value calculation of the interest rate swap.

Available-for-sale securities are investments pledged as collateral for trust accounts related to NiSource's wholly-owned insurance company. Available-for-sale securities are included within “Other investments” in the Condensed Consolidated Balance Sheets (unaudited). Securities classified within Level 1 include U.S. Treasury debt securities which are highly liquid and are actively traded in over-the-counter markets. NiSource values corporate and mortgage-backed debt securities using a matrix pricing model that incorporates market-based information. These securities trade less frequently and are classified within Level 2. Total gains and losses from available-for-sale securities are included in other comprehensive income (loss). The amortized cost, gross unrealized gains and losses, and fair value of available-for-sale debt securities at June 30, 2012 and December 31, 2011 were:

		Amortized		Total		Total		Fair
(in millions)		Cost		Gains		Losses		Value
Available-for-sale debt securities, June 30, 2012
	U.S. Treasury	$	34.2	$	1.7	$	-	$	35.9
	Corporate/Other		62.1		2.1		(0.1)		64.1
Total Available-for-sale debt securities		$	96.3	$	3.8	$	(0.1)	$	100.0
		Amortized		Total		Total		Fair
(in millions)		Cost		Gains		Losses		Value
Available-for-sale debt securities, December 31, 2011
	U.S. Treasury	$	36.7	$	1.7	$	-	$	38.4
	Corporate/Other		56.3		1.6		(0.3)		57.6
Total Available-for-sale debt securities		$	93.0	$	3.3	$	(0.3)	$	96.0

For the three months ended June 30, 2012 and 2011, the net realized gain on the sale of available-for-sale U.S. Treasury debt securities was $0.2 million. For the three months ended June 30, 2012 and 2011, the net realized gain on sale of available-for-sale Corporate/Other bond debt securities was zero and $0.5 million, respectively.

For the six months ended June 30, 2012 and 2011, the net realized gain on the sale of available-for-sale U.S. Treasury debt securities was $0.2 million and $0.3 million, respectively. For the six months ended June 30, 2012 and 2011, the net realized gain on sale of available-for-sale Corporate/Other bond debt securities was $0.1 million

and $1.0 million, respectively.

The cost of maturities sold is based upon specific identification. At June 30, 2012, all of theU.S. Treasury debt securities have maturities of greater than one year. At June 30, 2012, approximately $3.1million of Corporate/Other bonds have maturities of less than a year while the remaining securities have maturities of greater than one year.

The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for thesix months ended June 30, 2012 and 2011:

		Other
Three Months Ended June 30, 2012 (in millions)		Derivatives
Balance as of April 1, 2012		$	0.1
Total gains or (losses) (unrealized/realized)
	Included in regulatory assets/liabilities		(0.4)
Balance as of June 30, 2012		$	(0.3)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2012		$	-
		Other
Three Months Ended June 30, 2011 (in millions)		Derivatives
Balance as of April 1, 2011		$	(0.1)
Total gains or losses (unrealized/realized)
	Included in regulatory assets/liabilities		(0.6)
Purchases			(0.5)
Settlements			0.4
Balance as of June 30, 2011		$	(0.8)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2011		$	(1.5)

		Other
Six Months Ended, June 30, 2012 (in millions)		Derivatives
Balance as of January 1, 2012		$	0.3
Total gains or (losses) (unrealized/realized)
	Included in regulatory assets/liabilities		(0.6)
Balance as of June 30, 2012		$	(0.3)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2012		$	-
		Other
Six Months Ended, June 30, 2011 (in millions)		Derivatives
Balance as of January 1, 2011		$	0.2
Total gains or losses (unrealized/realized)
	Included in regulatory assets/liabilities		(1.0)
Purchases			(1.0)
Settlements			1.0
Balance as of June 30, 2011		$	(0.8)
Change in unrealized gains/(losses) relating to instruments still held as of June 30, 2011		$	(1.5)

Non-recurring Fair Value Measurements.There were no significant non-recurring fair value measurements recorded during the six months ended June 30,2012 and 2011.

B.       Other Fair Value Disclosures for Financial Instruments. NiSource has certain financial instruments that are not measured at fair value on a recurring basis but nevertheless are recorded at amounts that approximate fair value due to their liquid or short-term nature, including cash and cash equivalents, restricted cash, accounts receivable, notes receivable, accounts payable, customer deposits and short-term borrowings. NiSource's long-term borrowings are recorded at historical amounts unless designated as a hedged item in a fair value hedge.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate fair value.

Long-term Debt. The fair values of these securities are estimated based on the quoted market prices for the same or similar issues or on the rates offered for securities of the same remaining maturities. Certain premium costs associated with the early settlement of long-term debt are not taken into consideration in determining fair value. These fair value measurements are classified as Level 2 within the fair value hierarchy. For the quarters ending June 30, 2012 and 2011, there were no changes in the method or significant assumptions used to estimate the fair value of the financial instruments.

The carrying amount and estimated fair values of financial instruments were as follows:

	Carrying		Estimated Fair		Carrying		Estimated Fair
	Amount as of		Value as of		Amount as of		Value as of
(in millions)	June 30, 2012		June 30, 2012		Dec. 31, 2011		Dec. 31, 2011
Long-term debt (including current portion)	$	7,573.8	$	8,491.0	$	6,594.4	$	7,369.4

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Condensed Financial Information Of Registrant (Balance Sheet) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Investments in subsidiary companies	$ 211.5	$ 204.7
Total Investments and Other Assets	368.5	355.8
Other current assets	274.2	261.8
Total Current Assets	1,751.6	2,248.2
Other non-current assets	6,140.3	6,304.2
Total Assets	20,409.4	20,708.3
Common stock equity	5,105.3	4,997.3
Total Capitalization	11,912.2	11,264.4
Current liabilities	2,662.3	3,646.4
Other non-current liabilities	242.1	244.7
TOTAL CAPITALIZATION AND LIABILITIES	$ 20,409.4	$ 20,708.3