þ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2010 |
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OR | ||||
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from_____ to ______ |
Delaware | 35-2108964 | |||||
(State or other jurisdiction of | (I.R.S. Employer | |||||
incorporation or organization) | Identification No.) | |||||
801 East 86th Avenue | ||||||
Merrillville, Indiana | 46410 | |||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |||
Common Stock | New York |
Large accelerated filer
þ
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Accelerated filer o | |
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Non-accelerated filer
o
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Smaller reporting company o | |
(Do not check if a smaller reporting company)
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Page | ||||||||
No. | ||||||||
Defined Terms | 3 | |||||||
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Part I
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Item 1. | Business | 6 | |||||
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Item 1A. | Risk Factors | 9 | |||||
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Item 1B. | Unresolved Staff Comments | 14 | |||||
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Item 2. | Properties | 15 | |||||
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Item 3. | Legal Proceedings | 17 | |||||
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Item 4. | Removed and Reserved | 19 | |||||
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Supplemental Item. Executive Officers of the Registrant | 20 | |||||||
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Part II
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Item 5. |
Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities |
21 | |||||
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Item 6. | Selected Financial Data | 22 | |||||
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Item 7. |
Managements Discussion and Analysis of Financial Condition and
Results of Operations |
24 | |||||
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Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 62 | |||||
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Item 8. | Financial Statements and Supplementary Data | 63 | |||||
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Item 9. |
Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure |
161 | |||||
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Item 9A. | Controls and Procedures | 161 | |||||
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Part III
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Item 10. | Directors, Executive Officers and Corporate Governance | 162 | |||||
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Item 11. | Executive Compensation | 162 | |||||
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Item 12. |
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters |
162 | |||||
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Item 13. | Certain Relationships and Related Transactions, and Director Independence | 162 | |||||
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Item 14. | Principal Accounting Fees and Services | 162 | |||||
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Part IV
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Item 15. | Exhibits, Financial Statement Schedules | 163 | |||||
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Signatures | 164 | |||||||
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Exhibit Index | 165 |
2
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 Corporation | |
Northern Indiana
|
Northern Indiana Public Service Company | |
Northern Indiana Fuel and Light
|
Northern Indiana Fuel and Light Company Inc. | |
Northern Utilities
|
Northern Utilities, Inc. | |
NSR
|
New Source Review | |
PEI
|
PEI Holdings, Inc. | |
Whiting Clean Energy
|
Whiting Clean Energy, Inc. | |
|
||
Abbreviations
|
||
2010 Health Care Act
|
The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 signed into law by the President on March 23, 2010 and March 30, 2010, respectively | |
ACES
|
American Clean Energy and Security Act of 2009 | |
AFUDC
|
Allowance for funds used during construction | |
AICPA
|
American Institute of Certified Public Accountants | |
Ameren
|
Ameren Services Company | |
AMRP
|
Accelerated Main Replacement Program | |
AOC
|
Administrative Order by Consent | |
AOCI
|
Accumulated other comprehensive income | |
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 |
3
CAMR
|
Clean Air Mercury Rule | |
CARE
|
Conservation and Ratemaking Efficiency | |
CCGT
|
Combined Cycle Gas Turbine | |
CERCLA
|
Comprehensive Environmental Response Compensation and Liability Act (also known as Superfund) | |
Chesapeake
|
Chesapeake Appalachia, L.L.C. | |
CO2
|
Carbon Dioxide | |
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 | |
DOT
|
United States Department of Transportation | |
DPU
|
Department of Public Utilities | |
DSM
|
Demand Side Management | |
Dth
|
Dekatherm | |
ECR
|
Environmental Cost Recovery | |
ECRM
|
Environmental Cost Recovery Mechanism | |
ECT
|
Environmental cost tracker | |
EERM
|
Environmental Expense Recovery Mechanism | |
EPA
|
United States Environmental Protection Agency | |
EPS
|
Earnings per share | |
ERISA
|
Employee Retirement Income Security Act of 1974 | |
FAC
|
Fuel adjustment clause | |
FASB
|
Financial Accounting Standards Board | |
FERC
|
Federal Energy Regulatory Commission | |
FTRs
|
Financial Transmission Rights | |
GAAP
|
Generally Accepted Accounting Principles | |
GCR
|
Gas cost recovery | |
GHG
|
Greenhouse gases | |
gwh
|
Gigawatt hours | |
hp
|
Horsepower | |
IBM
|
International Business Machines Corp. | |
IBM Agreement
|
The Agreement for Business Process & Support Services | |
IDEM
|
Indiana Department of Environmental Management | |
IFRS
|
International Financial Reporting Standards | |
IRP
|
Infrastructure Replacement Program | |
IRS
|
Internal Revenue Service | |
IURC
|
Indiana Utility Regulatory Commission | |
LDCs
|
Local distribution companies | |
LIBOR
|
London InterBank Offered Rate | |
LIFO
|
Last-in, first-out | |
LNG
|
Liquefied Natural Gas | |
Mcf
|
Million cubic feet | |
MGP
|
Manufactured Gas Plant | |
MISO
|
Midwest Independent Transmission System Operator | |
Mitchell Station
|
Dean H. Mitchell Coal Fired Generating Station | |
MMDth
|
Million dekatherms | |
mw
|
Megawatts | |
mwh
|
Megawatts hours | |
NAAQS
|
National Ambient Air Quality Standards | |
NOV
|
Notice of Violation | |
NO
2
|
Nitrogen dioxide | |
NOx
|
Nitrogen oxides | |
NYMEX
|
New York Mercantile Exchange | |
OCI
|
Other Comprehensive Income (Loss) | |
OPEB
|
Other Postretirement and Postemployment Benefits |
4
OUCC
|
Indiana Office of Utility Consumer Counselor | |
PADEP
|
Pennsylvania Department of Environmental Protection | |
PCB
|
Polychlorinated biphenyls | |
Piedmont
|
Piedmont Natural Gas Company, Inc. | |
PIPP
|
Percentage of Income Plan | |
PJM
|
PJM Interconnection is 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 | |
RBS
|
Royal Bank of Scotland LC | |
RCRA
|
Resource Conservation and Recovery Act | |
RSG
|
Revenue Sufficiency Guarantee | |
SEC
|
Securities and Exchange Commission | |
SIP
|
State Implementation Plan | |
SO2
|
Sulfur dioxide | |
Sugar Creek
|
Sugar Creek electric generating plant | |
VaR
|
Value-at-risk and instrument sensitivity to market factors | |
VIE
|
Variable Interest Entity | |
VSCC
|
Virginia State Corporation Commission |
5
6
7
8
9
10
11
12
13
14
15
16
17
18
20
NiSources natural gas distribution operations serve more than 3.3 million customers in seven
states and operate approximately 59 thousand miles of pipeline. Through its wholly-owned
subsidiary, Columbia, NiSource owns five distribution subsidiaries that provide natural gas to
approximately 2.2 million residential, commercial and industrial customers in Ohio, Pennsylvania,
Virginia, Kentucky, and Maryland. NiSource also distributes natural gas to approximately 795
thousand customers in northern Indiana through three subsidiaries: Northern Indiana, Kokomo Gas
and Northern Indiana Fuel and Light. Additionally, NiSources subsidiary, Columbia Gas of
Massachusetts, distributes natural gas to approximately 296 thousand customers in Massachusetts.
NiSources Gas Transmission and Storage Operations subsidiaries own and operate nearly 15,000 miles
of jurisdictional and non-jurisdictional pipelines and operate one of the nations largest
underground natural gas storage systems capable of storing approximately 639 Bcf of natural gas.
Through its subsidiaries, Columbia Transmission, Columbia Gulf and Crossroads Pipeline, NiSource
owns and operates an interstate pipeline network extending from the Gulf of Mexico to New York and
the eastern seaboard. Together, these companies serve customers in 16 northeastern, mid-Atlantic,
midwestern and southern states and the District of Columbia.
NiSource generates, transmits and distributes electricity through its subsidiary Northern Indiana
to approximately 458 thousand customers in 20 counties in the northern part of Indiana and engages
in wholesale and transmission transactions. Northern Indiana operates three coal-fired electric
generating stations. The three operating facilities have a net capability of 2,574 mw. Northern
Indiana also owns and operates Sugar Creek, a CCGT plant with a 535
During the first quarter of 2010, NiSource made the decision to wind down the unregulated natural
gas marketing activities as a part of the Companys long-term strategy of focusing on its core
regulated business.
In recent years, NiSource sold certain businesses judged to be non-core to NiSources strategy.
NiSource sold Whiting Clean Energy to BPAE in April 2008 for $216.7 million which included $16.1
million in working capital. In December 2008, NiSource sold Northern Utilities and Granite State
Gas for $209.1 million which included $49.1 million in working capital. Columbia Gulf sold a
portion of Columbia Gulfs offshore assets to Tennessee Gas Pipeline in June 2008. Lake Erie Land,
a wholly-owned subsidiary of NiSource, sold its Sand Creek Golf Club assets in June 2006, to a
private real estate developer. Lake Erie Land is pursuing the sale of certain other real estate
assets it owns. NiSource Corporate Services is continuing to work with potential buyers to sell
its Marble Cliff facility. In the fourth quarter of 2010, NiSource Corporate Services executed a
purchase and sale agreement of the Marble Cliff facility with the closing date planned in the first
quarter 2011. NDC Douglas Properties, a subsidiary of NiSource Development Company, is in the
process of exiting some of its low income housing investments.
NiSource focuses its business strategy on its core, rate-regulated asset-based businesses with
virtually 100% of its operating income generated from the rate-regulated businesses. With the
nations fourth largest natural gas pipeline, the largest natural gas distribution network east of
the Rocky Mountains and one of the nations largest natural gas storage networks, NiSource operates
throughout the energy-intensive corridor that extends from the supply areas in the Gulf Coast
through the consumption centers in the Midwest, Mid-Atlantic, New England and Northeast. This
corridor includes over 40% of the nations population and close to 50% of its natural gas
consumption. NiSource continues to position its assets to meet the corridors growing energy
needs.
The regulatory frameworks applicable to NiSources operations, at both the state and federal
levels, continue to evolve. These changes have had and will continue to have an impact on
NiSources operations, structure and profitability. Management continually seeks new ways to be
more competitive and profitable in this changing environment, including providing gas customers
with increased choices for products and services.
NiSource Finance is a wholly-owned, consolidated finance subsidiary of NiSource that engages in
financing activities to raise funds for the business operations of NiSource and its subsidiaries.
NiSource Finance was incorporated in February 2000 under the laws of the state of Indiana.
NiSource Finances obligations are fully and unconditionally guaranteed by NiSource.
NiSources customer base is broadly diversified, with no single customer accounting for a
significant portion of revenues.
Existing environmental laws and regulations may be revised and new laws and regulations seeking to
protect the environment may be adopted or become applicable to NiSources subsidiaries. Revised or
additional laws and regulations could result in significant additional expense and operating
restrictions on NiSources facilities or increased compliance costs, which may not be fully
recoverable from customers and would, therefore, reduce net income. Moreover, such costs could
materially affect the continued economic viability of one or more of NiSources facilities.
Name
Age
Office(s) Held in Past 5 Years
56
Chief Executive Officer of NiSource since July 2005.
President of NiSource since October 2004.
56
Executive Vice President and Group Chief Executive Officer
since January 2008.
Pipeline Group President of NiSource from April 2005 to
December 2007.
53
Executive Vice President and Chief Legal Officer of
NiSource since December 2007.
President, AT&T Illinois from April 2001 through October
2006.
49
Executive Vice President and Chief Financial Officer of
NiSource since August 2008.
Executive Vice President of NiSource from June 2008 to
August 2008.
Senior Vice President of Shared Services for American
Electric Power Company from January 2008 to May 2008.
Senior Vice President and Treasurer, American Electric
Power
Company from January 2004 to December 2007.
50
Executive Vice President and Group Chief Executive Officer
since March 2008.
Senior Vice President, Gas Delivery, Dominion Resources,
Inc. from January 2006 to 2008.
51
Senior Vice President, Human Resources, of NiSource since
May 2006.
Senior Vice President, Human Resources, NiSource
Corporate Services since September 2005.
56
Senior Vice President, Corporate Affairs, since March 2006.
46
Vice President, Controller & Chief Accounting Officer
since February 2010.
Vice President at NiSource Corporate Services Company from
October 2009 to February 2010.
Vice President, Controller & Chief Accounting Officer,
Exelon Generation LLC from January 2004 to September 2009.
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
2010
2009
High
Low
High
Low
16.03
14.24
11.40
7.79
16.80
14.13
11.82
9.64
17.91
14.19
14.03
11.41
17.96
16.65
15.82
12.83
Year Ended December 31,
(in millions except per share data)
2010
2009
2008
2007
2006
$
3,094.0
$
3,296.2
$
5,171.3
$
4,332.5
$
4,083.7
1,261.4
1,239.5
1,132.4
1,089.6
1,027.0
1,386.7
1,213.2
1,357.0
1,358.6
1,300.0
679.9
901.7
1,219.5
1,082.0
1,008.8
6,422.0
6,650.6
8,880.2
7,862.7
7,419.5
depreciation and amortization)
3,447.9
3,332.6
3,246.9
3,187.4
3,082.9
921.3
801.0
919.0
916.4
915.4
294.6
230.5
370.6
303.0
333.7
(2.6
)
(12.8
)
(291.6
)
18.4
(51.9
)
-
-
-
-
0.4
292.0
217.7
79.0
321.4
282.2
19,938.8
19,271.7
20,032.2
18,009.9
18,169.1
4,923.2
4,854.1
4,728.8
5,076.6
5,013.6
5,936.1
5,969.1
5,945.7
5,596.3
5,148.1
$
10,859.3
$
10,823.2
$
10,674.5
$
10,672.9
$
10,161.7
1.06
0.84
1.35
1.10
1.23
(0.01
)
(0.05
)
(1.06
)
0.07
(0.19
)
1.05
0.79
0.29
1.17
1.04
1.05
0.84
1.35
1.10
1.22
(0.01
)
(0.05
)
(1.06
)
0.07
(0.19
)
1.04
0.79
0.29
1.17
1.03
0.92
0.92
0.92
0.92
0.92
278,855
276,638
274,262
274,177
273,654
32,313
34,299
36,194
38,091
40,401
803.8
777.2
1,299.9
786.5
627.1
7,604
7,616
7,981
7,607
7,439
Index
Page
24
24
29
33
38
38
41
46
47
52
58
NiSources four key initiatives to build a platform for long-term, sustainable growth continue to
comprise commercial and regulatory initiatives; commercial growth and expansion of the gas
transmission and storage business; financial management of the balance sheet; and process and
expense management.
NiSource remains committed to maintaining its liquidity position through management of capital
spending, working capital and operational requirements, and its financing needs. NiSource has
executed on its plan by taking the following actions:
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. NiSources senior management takes
an active role in the development of this Form 10-K and the monitoring of the companys internal
control structure and performance. In addition, NiSource will continue its mandatory ethics
training program in which employees at every level throughout the organization participate.
For the twelve months ended December 31, 2010, NiSource reported income from continuing operations
of $294.6 million, or $1.06 per basic share, compared to $230.5 million, or $0.84 per basic share
in 2009. Income from continuing operations for the twelve months ended December 31, 2008 was
$370.6 million, or $1.35 per basic share.
NiSource analyzes the operating results using net revenues. Net revenues are calculated as revenues
less the associated cost of sales (excluding depreciation and amortization). NiSource believes net
revenues is a better measure to analyze profitability than gross operating revenues since the
majority of the cost of sales are tracked
Operating expenses were $2,541.6 million in 2010, a decrease of $6.0 million from the comparable
2009 period. This decrease was primarily due to decreased restructuring charges of $27.2 million,
lower impairment charges of $21.3 million, lower uncollectible costs of $12.8 million, decreased
legal reserves of $12.0 million, and decreased trackers of $7.5 million, offset in net revenues.
The decreases above were partially offset by an increase of $36.1 million in payroll and benefits
expense, an increase of $20.0 million in maintenance costs, including integrity management pipeline
costs, and an increase of $7.0 million in depreciation costs due to the increased capital
expenditures.
Equity Earnings in Unconsolidated Affiliates were $15.0 million in 2010, a decrease of $1.0 million
compared with 2009. 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 decreased primarily resulting from lower earnings from Columbia
Transmissions investment in Millennium, driven by higher interest costs and hedge loss
amortization related to Millenniums August 2010 debt refinancing.
Other Income (Deductions) in 2010 reduced income $485.2 million compared to a reduction of $405.2
million in 2009. The decrease in other income was primarily due to a $96.7 million loss on the
early extinguishment of long-term debt, partially offset by a decrease in interest expense of $7.0
million. Interest expense decreased primarily due to the $681.8 million November 2010 long-term
debt maturity, the $385.0 million December 2009 term loan repayment, the maturity of the companys
$417.6 million November 2009 floating rate note, and lower short-term interest rates. The interest
expense benefits were partially offset by incremental interest expense associated with the issuance
of $250.0 million of long-term debt in December 2010, the issuance of the $500.0 million December
2009 long-term debt and the effect of the adoption of new accounting requirements related to the
companys accounts receivable facilities. Additionally, other, net increased from an expense of
$1.4 million in 2009 to income of $3.8 million in 2010 related to the classification of interest
expense as a result of the adoption of the new accounting requirements noted above.
The effective income tax rates were 32.4%, 41.8%, and 33.4% in 2010, 2009 and 2008, respectively.
The 9.4% decrease in the overall effective tax rate in 2010 versus 2009 was primarily due to the
2010 rate settlements resulting in the flow through of certain tax benefits in rates. In 2009, the
company recorded in its tax provision the impact of certain nondeductible expenses, which increased
tax expense $5.3 million, additional deferred income tax expense of $9.7 million related primarily
to state income tax apportionment changes, and a reduction in AFUDC-Equity that increased tax
expense by $3.2 million. In 2008, the effective tax rate was reduced by $14.9 million for the
change in Massachusetts state taxes discussed below.
Discontinued operations reflected a loss of $2.6 million, or $0.01 loss per basic share, in 2010, a
loss of $12.8 million, or $0.05 loss per basic share, in 2009, and a loss of $291.6 million, or
$1.06 loss per basic share, in 2008.
Net cash from operating activities for the twelve months ended December 31, 2010 was $725.4
million, a decrease of $940.8 million from a year ago. During 2010, the refunding of the 2009
over-recovered gas costs resulted in a $250.4 million use of working capital. During 2009, gas
price decreases and the collection of the 2008 under-recovered gas cost resulted in a $324.4
million source of working capital. Although there have been no changes in the operation of the
accounts receivable securitization programs, the application of new accounting guidance, ASC 860,
attributed to substantially all of the $243.9 million use of working capital associated with
accounts receivable in 2010. Furthermore, higher gas prices and volumes attributed to the higher
than normal accounts receivable at December 31, 2008 creating a $258.9 million source of working
capital when collected in 2009. This same pricing and volume scenario contributed to higher than
normal accounts payable at December 31, 2008, resulting in a $191.5 million use of working capital
when paid in 2009.
(in millions)
2011E
2010
2009
2008
$
491.1
$
409.7
$
343.2
$
369.7
327.5
302.0
287.4
383.8
258.4
190.3
162.6
552.4
23.0
9.6
5.4
0.7
$
1,100.0
$
911.6
$
798.6
$
1,306.6
(in millions)
Total
2011
2012
2013
2014
2015
After
$
5,951.8
$
27.7
$
315.9
$
613.9
$
561.9
$
230.0
$
4,202.4
51.9
9.2
9.0
7.5
7.5
6.4
12.3
2,943.0
369.4
367.2
321.9
301.6
285.5
1,297.4
194.6
39.5
33.1
26.1
22.3
14.2
59.4
640.1
258.3
124.2
101.7
76.8
79.1
-
1,662.5
257.4
253.9
197.6
162.9
147.9
642.8
399.9
94.4
90.4
89.2
86.4
39.5
-
53.7
12.1
12.0
11.9
11.8
5.9
-
202.8
143.4
53.6
5.8
-
-
-
158.0
158.0
-
-
-
-
-
$
12,258.3
$
1,369.4
$
1,259.3
$
1,375.6
$
1,231.2
$
808.5
$
6,214.3
NiSource is exposed to commodity price risk as a result of its subsidiaries operations involving
natural gas and power. To manage this market risk, NiSources subsidiaries use derivatives,
including commodity futures contracts, swaps and options. NiSource is not involved in speculative
energy trading activity.
NiSource is exposed to interest rate risk as a result of changes in interest rates on borrowings
under revolving credit agreements 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 $14.7 million and $19.2
million for the years 2010 and 2009, respectively.
Due to the nature of the industry, credit risk is embedded in many of NiSources business
activities. NiSources 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 forward commodity 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 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. NiSources financial assets and liabilities include price risk assets and
liabilities, available-for-sale securities and a deferred compensation plan obligation.
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 gas marketing group that utilizes a variance/covariance methodology. The
daily market exposure for the gas marketing portfolio on an average, high and low basis was $0.1
million, $0.3 million and zero during 2010, respectively. Prospectively, management has set the
VaR limit at $0.8 million for gas marketing. Exceeding this limit would result in management
actions to reduce portfolio risk.
NiSource applies certain accounting policies based on the accounting requirements discussed below
that have had, and may continue to have, significant impacts on NiSources results of operations
and Consolidated Balance Sheets.
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
October 2010, the SEC staff issued its first public progress report on the work plan and reported,
among other things, that many large jurisdictions using IFRS have adopted IFRS by either converging
their local standards to IFRS (convergence approach) or by endorsing individual standards over time
(endorsement approach). The SEC is expected to vote in the second half of 2011 on whether to
require the use of IFRS and by what method. Additionally, in December 2010 the SEC chairman
publicly stated that companies would be allowed a minimum of four years to adjust if the use of
IFRS is mandated.
NiSource is subject to regulation by various federal, state and local authorities in the areas of
air quality, water quality, control of toxic substances and hazardous and solid wastes, and other
environmental matters. NiSource believes that it is in substantial compliance with those
environmental regulations currently applicable to NiSources business and operations. Refer to
Note 20-D, Environmental Matters, in the Notes to Consolidated Financial Statements for
additional information regarding environmental matters.
As of December 31, 2010, NiSource had 7,604 employees of whom 3,278 were subject to collective bargaining agreements. These agreements expire at various times
beginning in September 2011 through June 2015.
The 2010 Health Care Act includes a provision eliminating, effective January 1, 2013, the tax
deductibility of retiree health care costs to the extent of federal subsidies received under the
Retiree Drug Subsidy program. When the Retiree Drug Subsidy was created by the Medicare
Prescription Drug, Improvement and Modernization Act of 2003, NiSource recorded a deferred tax
asset reflecting the exclusion of the expected future Retiree Drug Subsidy from taxable income. At
the same time, an offsetting regulatory liability was established to reflect NiSources obligation
to reduce income taxes collected in future rates. ASC Topic 740,
Income Taxes,
requires the
impact of a change in tax law to be immediately recognized in continuing operations in the income
statement for the period that includes the enactment date. In the first quarter of 2010, NiSource
reversed its deferred tax asset of $6.2 million related to previously excludable Retiree Drug
Subsidy payments expected to be received after January 1, 2013, which was completely offset by the
reversal of the related regulatory liability. There was no impact on income tax expense recorded
in the Statements of Consolidated Income for the period ended December 31, 2010.
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 derivative
market, requiring certain OTC transactions to be cleared through a clearing house and requiring
cash margins to be posted for those transactions. Many regulations will be issued to implement the
Act over the next twelve to twenty four months. NiSource is currently reviewing the Act and is
unable to determine the final impact that the Act will have on its operations until these
regulations have been issued.
Operating segments are components of an enterprise for which separate financial information is
available that is evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. The NiSource Chief Executive Officer is the chief
operating decision maker.
Year Ended December 31,
(in millions)
2010
2009
2008
$
3,668.1
$
3,902.4
$
5,740.6
2,065.6
2,293.0
4,197.9
1,602.5
1,609.4
1,542.7
870.8
871.0
798.3
239.3
248.1
228.8
-
(1.5
)
(2.3
)
159.7
164.0
181.8
1,269.8
1,281.6
1,206.6
$
332.7
$
327.8
$
336.1
$
2,134.8
$
2,508.2
$
3,228.8
707.7
864.6
1,125.4
215.4
239.7
311.9
295.4
253.5
915.5
314.8
36.4
159.0
$
3,668.1
$
3,902.4
$
5,740.6
258.0
265.2
278.0
166.8
169.4
174.2
385.9
335.9
373.2
71.9
59.7
96.8
1.0
0.8
1.0
883.6
831.0
923.2
5,547
5,624
5,771
5,633
5,633
5,664
(2%
)
0%
2%
3,039,874
3,032,597
3,037,504
281,473
279,144
280,195
7,668
7,895
8,003
65
79
76
3,329,080
3,319,715
3,325,778
Gas Distribution Operations (continued)
Gas Distribution Operations competes with investor-owned, municipal, and cooperative electric
utilities throughout its service area, and to a lesser extent with other regulated natural gas
utilities and propane and fuel oil suppliers. Gas Distribution Operations continues to be a strong
competitor in the energy market as a result of strong customer preference for natural gas.
Competition with providers of electricity is generally strongest in the residential and commercial
markets of Kentucky, southern Ohio, central Pennsylvania and western Virginia where electric rates
are primarily driven by low-cost, coal-fired generation. In Ohio and Pennsylvania, similar gas
provider competition is also common. Gas competes with fuel oil and propane in the Massachusetts
market mainly due to the installed base of fuel oil and propane-based heating which, over time, has
comprised a declining percentage of the overall market.
During 2010, Gas Distribution Operations gross revenues decreased due to lower natural gas
commodity prices experienced throughout the year. Spot prices for the winter of 2010-2011 have
primarily been in the $3.36 - $4.91/Dth range compared to prices in
the $3.00 - $6.50/Dth range
experienced during the winter of 2009-2010. Year over year demand reflected moderate recovery from
the 2009-2010 lows, but the combination of strong supplies and storage levels remaining at high
levels kept gas prices in a narrow range.
The table below reflects actual capital expenditures and other investing activities by category for
2008, 2009 and 2010 and estimates for 2011.
(in millions)
2011E
2010
2009
2008
$
75.5
$
94.1
$
86.1
$
75.8
415.6
315.6
257.1
293.9
$
491.1
$
409.7
$
343.2
$
369.7
Gas Distribution Operations (continued)
In August 2008, Columbia of Virginia entered into an agreement with Dominion Virginia Power to
install facilities to serve a 580 mw combined cycle generating station in Buckingham County, VA,
known as the Bear Garden station. The project required approximately 13.3 miles of 24-inch steel
pipeline and associated facilities to serve the station. In March 2009, the VSCC approved Dominion
Virginia Power Companys planned Bear Garden station. Columbia of Virginias facilities constructed
to serve the Bear Garden station were placed into service in July 2010.
Refer to Note 8, Regulatory Matters, in the Notes to Consolidated Financial Statements for
information on significant rate developments and cost recovery and trackers for the Gas
Distribution Operations segment.
Currently, various environmental matters impact the Gas Distribution Operations segment. As of
December 31, 2010, reserves have been recorded to cover probable environmental response actions.
Refer to Note 20-D, Environmental Matters, in the Notes to Consolidated Financial Statements for
additional information regarding environmental matters for the Gas Distribution Operations segment.
Refer to Note 3, Impairments, Restructuring and Other Charges, in the Notes to Consolidated
Financial Statements for information regarding restructuring initiatives.
On December 1, 2008, NiSource completed its sale of Northern Utilities and Granite State Gas to
Unitil Corporation. The final sale amount was $209.1 million, which included $49.1 million in
working capital. Northern Utilities is a local gas distribution company serving 52 thousand
customers in 44 communities in Maine and New Hampshire. In the first quarter of 2008, NiSource
began accounting for the operations of Northern Utilities as discontinued operations. As such, a
net loss of $0.5 million and net income of $6.2 million for Northern Utilities, which affected the
Gas Distribution Operations segment, was classified as net income from discontinued operations for
the years ended December 31, 2009 and 2008, respectively. There was no impact in 2010. Refer to
Note 4, Discontinued Operations and Assets and Liabilities Held for Sale, in the Notes to
Consolidated Financial Statements for additional information.
Gas Distribution Operations (continued)
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.
Total volumes sold and transported for the year ended December 31, 2010 were 883.6 MMDth, compared
to 831.0 MMDth for 2009. This increase reflected higher sales to industrial customers attributable
mainly to the improved economy and higher off-system sales.
Net revenues for 2010 were $1,602.5 million, a decrease of $6.9 million from 2009. This decrease
in net revenues was primarily due to decreased regulatory and tax trackers of $20.4 million, offset
in expense, and decreased residential and commercial margins of $20.1 million. Additionally, there
was an accrual related to a prior period contract established at Columbia of Massachusetts of $5.7
million, additional customer credits of $5.6 million issued as the result of a rate case, a
decrease in forfeited discounts and late payments of $5.0 million, and the impact of warmer weather
of approximately $3 million. These decreases were partially offset by an increase in regulatory and
service programs of $51.7 million. This includes impacts from rate cases at various utilities, the
implementation of new rates under Columbia of Ohios approved infrastructure replacement program,
and for the revenue normalization program at Columbia of Virginia.
Gas Distribution Operations (continued)
Year Ended December 31,
(in millions)
2010
2009
2008
$
728.4
$
724.6
$
682.5
198.7
190.8
178.9
22.1
15.3
3.9
949.2
930.7
865.3
399.1
382.2
326.5
130.7
121.5
117.6
(0.1
)
(1.4
)
7.3
57.4
55.9
56.5
587.1
558.2
507.9
15.0
16.0
12.3
$
377.1
$
388.5
$
369.7
1,092.4
1,029.8
1,000.0
848.4
894.1
990.2
25.4
33.9
36.3
(568.7
)
(566.4
)
(538.0
)
1,397.5
1,391.4
1,488.5
Gas Transmission and Storage Operations (continued)
Gas Transmission and Storage Operations (continued)
(in millions)
2011E
2010
2009
2008
$
152.9
$
152.4
$
171.2
$
253.4
174.6
149.6
116.2
130.4
$
327.5
$
302.0
$
287.4
$
383.8
Gas Transmission and Storage Operations (continued)
Gas Transmission and Storage Operations (continued)
Gas Transmission and Storage Operations (continued)
Year Ended December 31,
(in millions)
2010
2009
2008
$
1,394.7
$
1,221.4
$
1,362.7
508.3
456.5
556.8
886.4
764.9
805.9
381.3
391.5
320.7
211.0
205.6
209.6
-
0.3
(0.3
)
58.6
50.8
56.7
650.9
648.2
586.7
$
235.5
$
116.7
$
219.2
$
393.2
$
360.2
$
367.6
372.7
369.3
364.7
508.9
452.8
525.8
30.4
19.3
57.1
89.5
19.8
47.5
$
1,394.7
$
1,221.4
$
1,362.7
3,625.6
3,241.4
3,345.9
3,919.9
3,833.9
3,915.8
8,459.0
7,690.9
9,305.4
817.1
600.6
737.2
186.4
158.9
138.2
17,008.0
15,525.7
17,442.5
977
515
705
808
808
808
21%
(36%
)
(13%
)
400,522
400,016
400,640
53,877
53,617
53,438
2,432
2,441
2,484
15
15
9
740
746
754
457,586
456,835
457,325
Electric Operations (continued)
(in millions)
2011E
2010
2009
2008
$
85.9
$
25.8
$
32.7
$
376.1
172.5
164.5
129.9
176.3
$
258.4
$
190.3
$
162.6
$
552.4
Electric Operations (continued)
Electric Operations (continued)
Index
Page
64
67
69
70
72
73
75
77
156
160
NiSource Subsidiaries and Affiliates
NiSource Capital Markets, Inc.
Columbia Energy Resources, Inc.
Columbia Gas of Ohio Receivables Corporation
Columbia Natural Resources, Inc.
Columbia Energy Group
Columbia Gulf Transmission Company
Columbia Gas of Kentucky, Inc.
Columbia Gas of Maryland, Inc.
Bay State Gas Company
Columbia Gas of Ohio, Inc.
Columbia Gas of Pennsylvania, Inc.
Columbia Gas of Virginia, Inc.
Columbia Gas Transmission L.L.C.
Columbia Gas of Pennsylvania Receivables Corporation
Crossroads Pipeline Company
Granite State Gas Transmission, Inc.
Hardy Storage Company, L.L.C.
Kokomo Gas and Fuel Company
Millennium Pipeline Company, L.L.C.
NIPSCO Accounts Receivable Corporation
NDC Douglas Properties, Inc.
NiSource Inc.
NiSource Corporate Services Company
NiSource Development Company, Inc.
NiSource Finance Corporation
Northern Indiana Public Service Company
Northern Indiana Fuel and Light Company Inc.
Northern Utilities, Inc.
New Source Review
PEI Holdings, Inc.
Whiting Clean Energy, Inc.
The Patient Protection and Affordable Care Act and the Health Care and Education
Reconciliation Act of 2010 signed into law by the President on March 23, 2010 and March
30, 2010, respectively
American Clean Energy and Security Act of 2009
Allowance for funds used during construction
American Institute of Certified Public Accountants
Ameren Services Company
Accelerated Main Replacement Program
Administrative Order by Consent
Accumulated other comprehensive income
Auction Revenue Rights
Accounting Standards Codification
British Banker Association
Billion cubic feet
Board of Directors
BP Alternative Energy North America Inc
The Bank of Tokyo-Mitsubishi UFJ, LTD.
British Thermal Unit
Clean Air Act
Clean Air Interstate Rule
Clean Air Mercury Rule
Conservation and Ratemaking Efficiency
Combined Cycle Gas Turbine
Comprehensive Environmental Response Compensation and Liability Act (also known as
Superfund)
Chesapeake Appalachia, L.L.C.
Carbon Dioxide
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
United States Department of Transportation
Department of Public Utilities
Demand Side Management
Dekatherm
Environmental Cost Recovery
Environmental Cost Recovery Mechanism
Environmental cost tracker
Environmental Expense Recovery Mechanism
United States Environmental Protection Agency
Earnings per share
Employee Retirement Income Security Act of 1974
Fuel adjustment clause
Financial Accounting Standards Board
Federal Energy Regulatory Commission
Financial Transmission Rights
Generally Accepted Accounting Principles
Gas cost recovery
Greenhouse gases
Gigawatt hours
Horsepower
International Business Machines Corp.
The Agreement for Business Process & Support Services
Indiana Department of Environmental Management
International Financial Reporting Standards
Infrastructure Replacement Program
Internal Revenue Service
Indiana Utility Regulatory Commission
Local distribution companies
London InterBank Offered Rate
Last-in, first-out
Liquefied Natural Gas
Million cubic feet
Manufactured Gas Plant
Midwest Independent Transmission System Operator
Dean H. Mitchell Coal Fired Generating Station
Million dekatherms
Megawatts
Megawatts hours
National Ambient Air Quality Standards
Notice of Violation
Nitrogen dioxide
Nitrogen oxides
New York Mercantile Exchange
Other Comprehensive Income (Loss)
Other Postretirement and Postemployment Benefits
Indiana Office of Utility Consumer Counselor
Pennsylvania Department of Environmental Protection
Polychlorinated biphenyls
Piedmont Natural Gas Company, Inc.
Percentage of Income Plan
PJM Interconnection is a regional transmission organization (RTO) that coordinates the
movement of wholesale electricity in all or parts of 13 states and the District of
Columbia.
particulate matter
Public Service Commission
Public Utility Commission
Public Utilities Commission of Ohio
Royal Bank of Scotland LC
Resource Conservation and Recovery Act
Revenue Sufficiency Guarantee
Securities and Exchange Commission
State Implementation Plan
Sulfur dioxide
Sugar Creek electric generating plant
Value-at-risk and instrument sensitivity to market factors
Variable Interest Entity
Virginia State Corporation Commission
February 28, 2011
Year Ended December 31,
(in millions, except per share amounts)
2010
2009
2008
$
3,094.0
$
3,296.2
$
5,171.3
1,261.4
1,239.5
1,132.4
1,386.7
1,213.2
1,357.0
679.9
901.7
1,219.5
6,422.0
6,650.6
8,880.2
2,974.1
3,318.0
5,633.3
3,447.9
3,332.6
3,246.9
1,655.9
1,654.7
1,458.1
596.3
589.3
567.0
2.0
19.7
7.6
287.4
283.9
307.5
2,541.6
2,547.6
2,340.2
15.0
16.0
12.3
921.3
801.0
919.0
(392.3
)
(399.3
)
(380.0
)
3.8
(1.4
)
17.6
(96.7
)
(4.5
)
-
(485.2
)
(405.2
)
(362.4
)
436.1
395.8
556.6
141.5
165.3
186.0
294.6
230.5
370.6
(2.7
)
(10.3
)
(183.4
)
0.1
(2.5
)
(108.2
)
$
292.0
$
217.7
$
79.0
$
1.06
$
0.84
$
1.35
(0.01
)
(0.05
)
(1.06
)
$
1.05
$
0.79
$
0.29
$
1.05
$
0.84
$
1.35
(0.01
)
(0.05
)
(1.06
)
$
1.04
$
0.79
$
0.29
$
0.92
$
0.92
$
0.92
277.8
275.1
274.0
280.1
275.8
275.4
December 31,
December 31,
(in millions)
2010
2009
$
19,494.9
$
19,041.1
(8,492.6
)
(8,387.1
)
11,002.3
10,654.0
94.7
34.0
11,097.0
10,688.0
7.9
14.6
200.9
165.8
139.7
129.2
348.5
309.6
9.2
16.4
202.9
174.7
1,079.3
808.6
99.0
24.9
298.2
384.8
135.7
40.2
83.8
102.3
46.0
59.9
159.5
173.3
62.7
72.5
151.8
238.3
-
1.4
120.8
126.3
2,448.9
2,223.6
240.3
237.6
1,650.4
1,644.1
3,677.3
3,677.3
308.6
319.6
35.1
19.8
132.7
152.1
6,044.4
6,050.5
$
19,938.8
$
19,271.7
CONSOLIDATED BALANCE SHEETS (continued)
December 31,
December 31,
(in millions, except share amounts)
2010
2009
$
2.8
$
2.8
4,103.9
4,057.6
901.8
865.5
(57.9
)
(45.9
)
(27.4
)
(25.9
)
4,923.2
4,854.1
5,936.1
5,969.1
10,859.3
10,823.2
34.2
719.7
1,382.5
103.0
581.8
502.3
0.1
0.2
318.1
301.2
221.1
212.9
114.4
125.4
11.8
220.4
173.9
190.1
266.1
222.2
6.8
27.3
92.9
43.8
23.3
23.6
-
0.6
86.0
146.1
336.4
310.8
3,649.4
3,149.6
181.6
170.2
2,209.7
2,018.2
33.7
39.6
68.6
72.4
0.3
8.5
1,039.6
1,134.2
-
6.2
1,595.8
1,558.8
138.8
138.2
162.0
152.6
5,430.1
5,298.9
-
-
$
19,938.8
$
19,271.7
Year Ended December 31,
(in millions)
2010
2009
2008
$
292.0
$
217.7
$
79.0
96.7
4.5
-
596.3
589.3
567.0
(5.5
)
(9.1
)
25.7
200.1
378.2
137.8
(20.4
)
4.3
(24.0
)
30.9
9.6
9.5
(0.1
)
(3.6
)
4.3
2.1
23.3
3.4
(14.8
)
(15.1
)
(25.3
)
(0.1
)
2.5
108.2
2.7
10.3
183.4
10.3
13.0
7.7
(6.1
)
(5.4
)
(5.4
)
12.9
-
-
(243.9
)
258.9
(202.4
)
51.5
(24.9
)
-
103.3
128.7
(82.4
)
37.7
(191.4
)
(30.0
)
(25.0
)
25.3
42.3
(117.0
)
116.2
(89.7
)
(10.7
)
5.3
20.8
(250.4
)
324.4
3.6
(14.2
)
(10.0
)
(71.9
)
56.4
(7.7
)
14.5
(11.5
)
23.9
(27.5
)
163.9
105.2
(91.8
)
(146.6
)
(49.1
)
(9.2
)
(2.6
)
6.2
36.3
7.9
(21.9
)
38.7
(13.2
)
12.1
(34.8
)
782.6
1,920.7
587.8
(57.2
)
(254.5
)
(2.5
)
725.4
1,666.2
585.3
(803.8
)
(777.2
)
(1,299.9
)
5.0
62.7
46.7
0.5
5.7
47.8
(28.2
)
111.9
(228.8
)
(87.9
)
(26.4
)
(39.2
)
23.8
2.9
-
(53.1
)
(42.0
)
(38.1
)
(943.7
)
(662.4
)
(1,511.5
)
0.4
7.6
397.2
(943.3
)
(654.8
)
(1,114.3
)
244.6
1,460.0
959.3
(977.7
)
(1,169.8
)
(40.6
)
-
-
(254.0
)
(93.0
)
-
-
1,279.5
(1,060.5
)
102.5
14.4
10.6
1.3
(1.5
)
(2.6
)
-
(255.6
)
(253.3
)
(252.4
)
210.7
(1,015.6
)
516.1
49.6
242.7
(407.6
)
(56.8
)
(246.9
)
393.6
16.4
20.6
34.6
$
9.2
$
16.4
$
20.6
As of December 31,
(in millions)
2010
2009
rate of 6.30% and maturities between December 15, 2025 and February 15, 2028
40.0
48.5
40.0
48.5
0.5
0.9
0.5
0.9
3.0
3.0
average interest rate of 7.92% and various maturities between
March 27, 2017 and May 5, 2027 (a)
106.0
106.0
109.0
109.0
2.3
-
30.1
32.1
0.8
0.9
0.8
0.2
34.0
33.2
interest rate of 7.21% and various maturities between May 1, 2013
and July 1, 2041 (a)
10.7
10.3
10.7
10.3
STATEMENTS OF CONSOLIDATED LONG-TERM DEBT (continued)
As of December 31,
(in millions)
2010
2009
315.0
315.0
545.0
545.0
500.0
500.0
230.0
230.0
326.9
600.0
90.0
90.0
450.0
450.0
800.0
800.0
500.0
500.0
550.0
550.0
500.0
500.0
265.0
265.0
250.0
-
61.1
47.4
(32.5
)
(36.1
)
5,350.5
5,356.3
average interest rate of 5.64% and various maturities between
June 1, 2013 and April 1, 2019
(a)
244.0
244.0
average interest rate of 7.45% and various maturities between
July 8, 2013 and August 4, 2027
(a)
145.5
164.2
July 1, 2014 and October 28, 2014
2.6
3.5
(0.7
)
(0.8
)
391.4
410.9
$
5,936.1
$
5,969.1
Accumulated
Additional
Other
Common
Treasury
Paid-In
Retained
Comprehensive
Comprehensive
(in millions)
Stock
Stock
Capital
Earnings
Income/(Loss)
Total
Income
$
2.7
$
(23.3
)
$
4,011.0
$
1,074.5
$
11.7
$
5,076.6
-
-
-
79.0
-
79.0
$
79.0
-
-
-
-
(4.0
)
(4.0
)
(4.0
)
-
-
-
-
(147.4
)
(147.4
)
(147.4
)
and Other Postretirement Benefit
Costs
(d)
-
-
-
-
(32.3
)
(32.3
)
(32.3
)
$
(104.7
)
-
-
-
(252.4
)
-
(252.4
)
-
-
0.9
-
-
0.9
-
-
7.4
-
-
7.4
-
-
1.0
-
-
1.0
$
2.7
$
(23.3
)
$
4,020.3
$
901.1
$
(172.0
)
$
4,728.8
-
-
-
217.7
-
217.7
$
217.7
Unrealized
(a)
-
-
-
-
2.3
2.3
2.3
qualifying as cash flow hedges
(b)
-
-
-
-
118.8
118.8
118.8
and Other Postretirement Benefit
Costs
(d)
-
-
-
-
5.0
5.0
5.0
$
343.8
-
-
-
(253.3
)
-
(253.3
)
-
(2.6
)
-
-
-
(2.6
)
0.1
-
-
-
-
0.1
-
-
0.9
-
-
0.9
-
-
11.1
-
-
11.1
-
-
18.1
-
-
18.1
-
-
6.8
-
-
6.8
-
-
0.4
-
-
0.4
$
2.8
$
(25.9
)
$
4,057.6
$
865.5
$
(45.9
)
$
4,854.1
STATEMENTS OF CONSOLIDATED COMMON STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME (LOSS) (continued)
Accumulated
Additional
Other
Common
Treasury
Paid-In
Retained
Comprehensive
Comprehensive
(in millions)
Stock
Stock
Capital
Earnings
Income/(Loss)
Total
Income (Loss)
$
2.8
$
(25.9
)
$
4,057.6
$
865.5
$
(45.9
)
$
4,854.1
-
-
-
292.0
-
292.0
$
292.0
-
-
-
-
1.1
1.1
1.1
qualifying as cash flow hedges
(b), (c)
-
-
-
-
(13.8
)
(13.8
)
(13.8
)
and Other Postretirement Benefit Costs
(d)
-
-
-
-
0.7
0.7
0.7
$
280.0
-
-
-
(255.7
)
-
(255.7
)
-
(1.5
)
-
-
-
(1.5
)
-
-
1.1
-
-
1.1
-
-
12.1
-
-
12.1
-
-
24.2
-
-
24.2
-
-
8.9
-
-
8.9
$
2.8
$
(27.4
)
$
4,103.9
$
901.8
$
(57.9
)
$
4,923.2
Common
Treasury
Outstanding
Shares
(in thousands)
Shares
Shares
Shares
275,290
(1,113
)
274,177
(4
)
(4
)
49
-
49
40
-
40
275,379
(1,117
)
274,262
(192
)
(192
)
80
-
80
480
-
480
546
-
546
1,462
-
1,462
277,947
(1,309
)
276,638
(97
)
(97
)
62
-
62
191
-
191
563
-
563
1,498
-
1,498
280,261
(1,406
)
278,855
Notes to Consolidated Financial Statements
2010
2009
2008
3.5
%
3.4
%
3.7
%
2.8
%
2.9
%
2.8
%
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Diluted Average Common Shares Computation
2010
2009
2008
277,797
275,061
273,974
910
330
1,279
697
424
196
684
-
-
280,088
275,815
275,449
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Balance at
Balance at
(in millions)
December 31, 2009
Additions
Benefits Paid
Adjustments
December 31, 2010
$
1.5
$
-
$
(1.4
)
$
-
$
0.1
1.1
1.1
(2.2
)
-
-
$
2.6
$
1.1
$
(3.6
)
$
-
$
0.1
Balance at
Balance at
(in millions)
December 31, 2008
Additions
Benefits Paid
Adjustments
December 31, 2009
$
-
$
21.8
$
(18.4
)
$
(1.9
)
$
1.5
-
5.5
(4.3
)
(0.1
)
1.1
$
-
$
27.3
$
(22.7
)
$
(2.0
)
$
2.6
Notes to Consolidated Financial Statements
(in millions)
Property, plant
and
Other
Assets of discontinued operations and held for sale:
equipment, net
Assets
Total
$
6.2
$
-
$
6.2
5.8
1.4
7.2
2.6
-
2.6
$
14.6
$
1.4
$
16.0
Accounts
Other
Liabilities of discontinued operations and held for sale:
Debt
payable
liabilities
Total
$
6.6
$
0.2
$
-
$
6.8
$
6.6
$
0.2
$
-
$
6.8
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
At December 31,
(in millions)
2010
2009
$
7,251.0
$
6,947.5
5,865.0
5,703.5
6,005.6
5,999.2
107.8
95.0
265.5
295.9
138.6
71.7
$
19,633.5
$
19,112.8
$
(2,725.7
)
$
(2,661.4
)
(2,784.9
)
(2,693.1
)
(2,939.4
)
(2,999.2
)
(42.6
)
(33.4
)
(43.9
)
(37.7
)
$
(8,536.5
)
$
(8,424.8
)
$
11,097.0
$
10,688.0
(1)
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
(in millions)
2010
2009
$
138.2
$
126.0
0.7
0.7
7.5
7.1
4.5
11.2
(8.1
)
(6.8
)
(4.0
)
-
$
138.8
$
138.2
Notes to Consolidated Financial Statements
At December 31,
(in millions)
2010
2009
$
13.3
$
15.8
11.8
15.9
962.7
980.7
94.6
101.8
32.5
33.3
254.1
253.2
135.7
40.2
118.5
121.6
8.5
26.8
-
54.1
16.2
39.9
33.2
28.8
46.4
49.4
42.5
37.2
36.6
26.4
57.7
30.0
73.6
67.5
$
1,937.9
$
1,922.6
(135.7
)
(40.2
)
$
1,802.2
$
1,882.4
Notes to Consolidated Financial Statements
At December 31,
(in millions)
2010
2009
$
11.8
$
220.4
138.4
137.9
1,442.5
1,385.8
112.1
137.8
1.9
1.4
9.9
-
42.9
13.2
19.8
19.6
0.3
2.1
59.3
42.7
$
1,838.9
$
1,960.9
(11.8
)
(220.4
)
(138.4
)
(137.9
)
$
1,688.7
$
1,602.6
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
December 31, 2010
December 31, 2009
28.4
26.4
1.6
1.6
0.4
0.6
2.0
0.9
48.2
74.7
48.0
79.6
8,279.1
1,343.7
Notes to Consolidated Financial Statements
Asset Derivatives
(in millions)
December 31, 2010
December 31, 2009
Fair Value
Fair Value
$
-
$
-
61.1
68.2
$
61.1
$
68.2
$
159.5
$
173.3
179.2
169.4
$
338.7
$
342.7
$
399.8
$
410.9
Liability Derivatives
(in millions)
December 31, 2010
December 31, 2009
Fair Value
Fair Value
$
1.0
$
1.0
0.2
0.5
$
1.2
$
1.5
$
172.9
$
189.1
181.4
169.7
$
354.3
$
358.8
$
355.5
$
360.3
Notes to Consolidated Financial Statements
Amount of Gain
Recognized in OCI on
Derivative (Effective Portion)
Derivatives in Cash Flow
Hedging Relationships
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
$
0.1
$
117.3
$
(148.9
)
1.5
1.5
1.5
$
1.6
$
118.8
$
(147.4
)
Amount of Gain (Loss)
Reclassified from AOCI into
Location of Gain (Loss)
Income (Effective Portion)
Reclassified from AOCI
into Income (Effective Portion)
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
$
1.2
$
(89.4
)
$
16.7
(2.6
)
-
-
$
(1.4
)
$
(89.4
)
$
16.7
Twelve Months Ended,
(in millions)
Amount of Gain (Loss)
Recognized in Income
Location of Gain (Loss)
of Derivative (Ineffective
Recognized in Income
Portion and Amount Excluded
on Derivative (Ineffective
from Effectiveness Testing)
Derivatives in Cash Flow
Portion and Amount Excluded
Dec. 31,
Dec. 31,
Dec. 31,
Hedging Relationships
from Effectiveness Testing)
2010
2009
2008
Cost of Sales
$
-
$
-
$
-
Interest expense, net
-
-
(0.3
)
$
-
$
-
$
(0.3
)
Twelve Months Ended, (in millions)
Location of Gain (Loss)
Amount of Gain (Loss) Recognized
Derivatives in Fair Value
Recognized in Income
in Income on Derivatives
Hedging Relationships
on Derivatives
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
Interest expense, net
$
(8.7
)
$
(29.5
)
$
80.5
$
(8.7
)
$
(29.5
)
$
80.5
Twelve Months Ended, (in millions)
Location of Gain (Loss)
Amount of Gain (Loss) Recognized in Income on
Hedged Item in Fair Value
Recognized in Income on
Related Hedged Items
Hedge Relationships
Related Hedged Item
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
Interest expense, net
$
8.7
$
29.5
$
(80.5
)
$
8.7
$
29.5
$
(80.5
)
Twelve Months Ended, (in millions)
Amount of Realized/Unrealized
Gain (Loss) Recognized in
Location of Gain (Loss)
Income on Derivatives *
Derivatives Not Designated as
Recognized in Income
Dec. 31,
Dec. 31,
Dec. 31,
Hedging Instruments
on Derivatives
2010
2009
2008
Gas Distribution revenues
$
(55.6
)
$
(61.7
)
$
(32.0
)
Other revenues
115.3
172.0
-
Cost of Sales
(95.4
)
70.5
0.3
$
(35.7
)
$
180.8
$
(31.7
)
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
% of Voting Power
Investee
or Interest Held
General Partnership
50.0
LLC Membership
50.0
LLC Membership
47.5
Limited Partnership
7.9
Limited Partnership
4.3
Limited Partnership
4.2
Limited Partnership
4.2
Limited Partnership
1.8
Notes to Consolidated Financial Statements
Year Ended December 31,
(in millions)
2010
2009
2008
$
103.9
$
99.4
$
3.1
55.9
50.1
2.0
22.1
25.5
16.9
1,060.6
1,096.1
1,043.0
725.5
867.9
971.5
335.1
228.2
71.5
$
23.9
$
23.3
$
23.6
16.2
15.2
15.4
9.0
7.9
8.6
184.8
206.7
213.4
124.1
129.2
146.0
60.7
77.5
67.4
Notes to Consolidated Financial Statements
Year Ended December 31,
(in millions)
2010
2009
2008
$
(61.8
)
$
(197.0
)
$
31.5
3.2
(15.9
)
16.6
(58.6
)
(212.9
)
48.1
188.6
332.5
167.8
17.4
52.2
(22.7
)
206.0
384.7
145.1
(5.9
)
(6.5
)
(7.3
)
-
-
(0.1
)
-
-
0.2
$
141.5
$
165.3
$
186.0
Year Ended December 31, (in millions)
2010
2009
2008
$
436.1
$
395.8
$
556.6
152.6
35.0%
138.6
35.0%
194.8
35.0%
13.3
3.0
23.6
6.0
(4.0
)
(0.7
)
(16.2
)
(3.7
)
5.6
1.4
6.9
1.2
(5.9
)
(1.4
)
(6.5
)
(1.6
)
(7.3
)
(1.3
)
1.8
0.4
7.2
1.8
1.9
0.3
(2.9
)
(0.7
)
(2.2
)
(0.6
)
(2.0
)
(0.4
)
(1.9
)
(0.4
)
(1.9
)
(0.5
)
(5.1
)
(0.9
)
-
-
(1.2
)
(0.3
)
(1.8
)
(0.3
)
0.7
0.2
2.1
0.6
2.6
0.5
$
141.5
32.4%
$
165.3
41.8%
$
186.0
33.4%
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
At December 31,
(in millions)
2010
2009
$
2,671.0
$
2,494.5
59.5
10.5
939.3
762.5
14.2
15.1
3,684.0
3,282.6
(123.1
)
(132.3
)
(503.3
)
(528.6
)
(535.2
)
(465.9
)
(24.4
)
(28.0
)
(121.6
)
(22.7
)
(80.5
)
(97.1
)
(49.1
)
(6.7
)
(1,437.2
)
(1,281.3
)
2,246.8
2,001.3
37.1
(16.9
)
$
2,209.7
$
2,018.2
(in millions)
2010
2009
$
2,001.3
$
1,435.0
206.0
384.7
27.1
0.1
(7.0
)
83.1
19.4
98.4
$
2,246.8
$
2,001.3
Notes to Consolidated Financial Statements
Reconciliation of Unrecognized Tax Benefits
(in millions)
2010
2009
2008
$
117.7
$
3.5
$
3.7
1.2
-
-
(8.2
)
(0.2
)
(0.2
)
18.5
114.4
-
-
-
-
-
-
-
$
129.2
$
117.7
$
3.5
(114.2
)
(105.4
)
-
(17.2
)
(15.6
)
-
$
(2.2
)
$
(3.3
)
$
3.5
Notes to Consolidated Financial Statements
Defined Benefit Pension Plan
Postretirement Welfare Plan
Asset Category
Minimum
Maximum
Minimum
Maximum
25%
45%
35%
55%
15%
25%
15%
25%
15%
45%
20%
50%
5%
20%
0%
0%
0%
10%
0%
10%
Notes to Consolidated Financial Statements
Postretirement
Defined Benefit
Welfare Plan
(in millions)
Pension Assets
12/31/2010
Assets
12/31/2010
Asset
% of Total
Asset
% of Total
Asset Class
Value
Assets
Value
Assets
$
730.5
38.5
%
$
148.8
45.5
%
416.3
21.9
%
66.1
20.2
%
543.1
28.6
%
110.0
33.7
%
200.0
10.5
%
-
-
10.1
0.5
%
1.9
0.6
%
$
1,900.0
100.0
%
$
326.8
100.0
%
Postretirement
Defined Benefit
Welfare Plan
(in millions)
Pension Assets
12/31/2009
Assets
12/31/2009
Asset
% of Total
Asset
% of Total
Value
Assets
Value
Assets
$
653.6
38.9
%
$
155.1
54.1
%
326.6
19.4
%
41.0
14.3
%
510.7
30.4
%
88.4
30.9
%
169.8
10.1
%
-
-
20.8
1.2
%
2.0
0.7
%
$
1,681.5
100.0
%
$
286.5
100.0
%
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Quoted Prices in Active
Significant Other
Significant
December 31,
Markets for Identical
Observable
Unobservable
(in millions)
2010
Assets (Level 1)
Inputs (Level 2)
Inputs (Level 3)
$
9.2
$
9.2
$
-
$
-
627.0
626.9
-
0.1
141.3
140.6
0.7
-
85.3
46.5
38.2
0.6
132.2
-
131.8
0.4
111.4
-
110.9
0.5
4.1
0.2
3.4
0.5
50.5
-
50.5
-
65.1
-
65.1
-
261.4
-
261.4
-
228.8
117.4
111.4
49.0
-
-
49.0
31.5
-
-
31.5
58.8
-
-
58.8
36.2
-
-
36.2
9.3
-
-
9.3
15.8
-
-
15.8
1,916.9
823.4
779.4
314.1
1.9
-
1.9
-
22.2
-
22.2
-
126.7
126.7
-
-
66.1
66.1
-
-
109.9
109.9
-
-
326.8
302.7
24.1
-
(20.2
)
4.0
(0.7
)
$
2,226.8
$
1,126.1
$
803.5
$
314.1
Notes to Consolidated Financial Statements
Total gains or
Transfers
Balance at
losses (unrealized
into/(out of)
Balance at
January 1, 2010
/ realized)
Purchases
(Sales)
level 3
December 31, 2010
$
-
$
0.2
$
-
$
-
$
(0.1
)
$
0.1
1.2
-
-
(0.6
)
-
0.6
2.7
0.5
-
(1.0
)
(1.8
)
0.4
1.2
(0.6
)
0.5
(0.3
)
(0.3
)
0.5
1.6
0.1
0.8
(2.0
)
-
0.5
111.8
10.6
-
(11.0
)
-
111.4
34.9
4.1
10.0
-
-
49.0
33.3
(1.8
)
-
-
-
31.5
56.5
(0.7
)
13.3
(10.3
)
-
58.8
27.3
3.2
6.4
(0.7
)
-
36.2
8.3
(0.9
)
4.0
(2.1
)
-
9.3
8.9
0.4
7.7
(1.2
)
-
15.8
$
287.7
$
15.1
$
42.7
$
(29.2
)
$
(2.2
)
$
314.1
Notes to Consolidated Financial Statements
Quoted Prices in Active
Significant Other
Significant
December 31,
Markets for Identical
Observable
Unobservable
(in millions)
2009
Assets (Level 1)
Inputs (Level 2)
Inputs (Level 3)
$
10.6
$
10.6
$
-
$
-
624.3
623.8
0.5
-
109.8
109.4
0.4
-
62.6
-
61.4
1.2
139.1
-
136.4
2.7
91.4
-
90.2
1.2
6.5
(0.1
)
5.0
1.6
58.0
-
58.0
-
214.3
-
214.3
-
195.8
-
83.9
111.9
34.9
-
-
34.9
33.3
-
-
33.3
56.4
-
-
56.4
27.3
-
-
27.3
8.3
-
-
8.3
8.9
-
-
8.9
1,681.5
743.7
650.1
287.7
2.1
-
2.1
-
24.6
-
24.6
-
133.5
133.5
-
-
40.4
40.4
-
-
85.9
85.9
-
-
286.5
259.8
26.7
-
$
1,968.0
$
1,003.5
$
676.8
$
287.7
Notes to Consolidated Financial Statements
Total gains or
Transfers
Balance at
losses (unrealized
into/(out of)
Balance at
January 1, 2009
/ realized)
Purchases
(Sales)
level 3
December 31, 2009
$
-
$
(0.1
)
$
-
$
-
$
0.1
$
-
1.0
0.1
0.4
(0.1
)
(0.2
)
1.2
6.2
(2.2
)
2.2
(2.7
)
(0.8
)
2.7
5.1
0.4
0.3
(5.2
)
0.6
1.2
0.8
0.9
0.6
(0.7
)
-
1.6
106.0
30.8
-
(24.9
)
-
111.9
29.0
5.9
-
-
-
34.9
35.6
(2.2
)
-
(0.1
)
-
33.3
55.0
(4.9
)
8.7
(2.4
)
-
56.4
26.7
(3.5
)
4.4
(0.3
)
-
27.3
10.4
(1.8
)
-
(0.3
)
-
8.3
6.9
(0.5
)
2.5
-
-
8.9
$
282.7
$
22.9
$
19.1
$
(36.7
)
$
(0.3
)
$
287.7
Pension Benefits
Other Postretirement Benefits
(in millions)
2010
2009
2010
2009
$
2,356.0
$
2,153.0
$
731.2
$
713.6
39.1
36.0
9.8
8.8
125.7
143.1
41.4
47.7
-
-
6.3
5.6
0.5
1.9
1.4
(33.3
)
144.5
227.8
20.1
33.7
(187.4
)
(205.8
)
(55.1
)
(50.7
)
-
-
0.9
5.8
$
2,478.4
$
2,356.0
$
756.0
$
731.2
$
1,681.5
$
1,440.5
$
286.5
$
210.8
244.1
343.9
39.1
60.0
161.8
102.9
50.0
60.8
-
-
6.3
5.6
(187.4
)
(205.8
)
(55.1
)
(50.7
)
$
1,900.0
$
1,681.5
$
326.8
$
286.5
$
(578.4
)
$
(674.5
)
$
(429.2
)
$
(444.7
)
$
-
$
-
$
32.9
$
17.4
(3.3
)
(5.5
)
(17.8
)
(16.0
)
(575.1
)
(669.0
)
(444.3
)
(446.1
)
$
(578.4
)
$
(674.5
)
$
(429.2
)
$
(444.7
)
$
-
$
-
$
2.9
$
4.2
(6.0
)
(4.3
)
(4.4
)
(4.6
)
871.4
886.3
140.2
142.0
$
865.4
$
882.0
$
138.7
$
141.6
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Pension Benefits
Other Postretirement Benefits
2010
2009
2010
2009
5.00%
5.54%
5.29%
5.86%
4.00%
4.00%
-
-
-
-
8.00%
7.50%
-
-
5.00%
5.00%
-
-
2017
2015
1% point
1% point
(in millions)
increase
decrease
$
4.1
$
(3.6
)
56.2
(51.4
)
Other
Federal
Pension
Postretirement
Subsidy
(in millions)
Benefits
Benefits
Receipts
$
176.4
$
55.9
$
1.3
189.7
56.6
1.6
187.3
56.9
1.8
193.8
57.4
2.1
197.3
57.7
2.2
1,115.9
293.5
10.7
Notes to Consolidated Financial Statements
Other Postretirement
Pension Benefits
Benefits
(in millions)
2010
2009
2008
2010
2009
2008
$
39.2
$
36.0
$
37.4
$
9.8
$
8.8
$
9.4
125.7
143.1
132.4
41.4
47.7
47.6
(143.7
)
(121.8
)
(194.0
)
(23.8
)
(16.9
)
(25.1
)
-
-
-
1.3
8.0
8.0
2.0
3.9
4.3
1.1
1.0
0.7
57.8
65.8
1.2
6.7
7.8
4.0
81.0
127.0
(18.7
)
36.5
56.4
44.6
-
-
-
-
-
0.3
-
-
0.4
-
-
-
1.3
-
-
-
-
-
$
82.3
$
127.0
$
(18.3
)
$
36.5
$
56.4
$
44.9
Pension Benefits
Postretirement Benefits
2010
2009
2008
2010
2009
2008
5.54
%
6.92
%
6.40
%
5.86
%
6.92
%
6.40
%
8.75
%
8.75
%
9.00
%
8.75
%
8.75
%
8.75
%
4.00
%
4.00
%
4.00
%
-
-
-
Notes to Consolidated Financial Statements
Other Postretirement
Pension Benefits
Benefits
(in millions)
2010
2009
2010
2009
(1.3
)
-
-
-
0.4
1.9
1.4
(33.3
)
44.1
5.8
4.9
(9.4
)
-
-
(1.3
)
(8.0
)
(2.0
)
(3.9
)
(1.1
)
(1.0
)
(57.8
)
(65.8
)
(6.8
)
(7.8
)
$
(16.6
)
$
(62.0
)
$
(2.9
)
$
(59.5
)
$
65.7
$
65.0
$
33.6
$
(3.1
)
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Weighted Average
Options
Option Price ($)
4,332,835
22.50
-
-
-
-
(235,200
)
22.37
4,097,635
22.51
4,097,635
22.51
Notes to Consolidated Financial Statements
Restricted Stock
Weighted Average
Units
Grant Date Fair Value ($)
551,503
10.53
265,134
13.03
(23,434
)
10.96
(30,662
)
13.56
762,541
11.26
Time-accelerated
Weighted Average
awards
Grant Date Fair Value ($)
265,137
21.82
-
-
-
-
(265,137
)
21.82
-
-
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Contingent
Weighted Average
Awards
Grant Date Fair Value ($)
1,350,514
9.79
662,969
13.05
(35,855
)
10.44
-
-
1,977,628
10.86
Notes to Consolidated Financial Statements
Year Ending December 31,
(in millions)
$
34.2
322.5
619.4
567.8
235.3
4,224.3
$
6,003.5
(1)
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
At December 31,
(in millions)
2010
2009
$
1,107.5
$
103.0
275.0
-
$
1,382.5
$
103.0
Quoted Prices
Significant
in Active Markets
Significant Other
Unobservable
Recurring Fair Value Measurements
for Identical Assets
Observable Inputs
Inputs
Balance as of
December 31, 2010
(in millions)
(Level 1)
(Level 2)
(Level 3)
December 31, 2010
$
-
$
161.4
$
-
$
161.4
173.8
3.2
0.3
177.3
-
61.1
-
61.1
43.5
37.9
-
81.4
$
217.3
$
263.6
$
0.3
$
481.2
$
-
$
3.6
$
-
$
3.6
348.5
3.3
0.1
351.9
$
348.5
$
6.9
$
0.1
$
355.5
Notes to Consolidated Financial Statements
Quoted Prices
Significant
in Active Markets
Significant Other
Unobservable
Recurring Fair Value Measurements
for Identical Assets
Observable Inputs
Inputs
Balance as of
December 31, 2009
(in millions)
(Level 1)
(Level 2)
(Level 3)
December 31, 2009
$
-
$
141.7
$
-
$
141.7
187.5
11.4
-
198.9
-
-
2.1
2.1
-
68.2
-
68.2
34.5
37.4
-
71.9
$
222.0
$
258.7
$
2.1
$
482.8
$
-
$
9.6
$
-
$
9.6
343.8
6.9
-
350.7
$
343.8
$
16.5
$
-
$
360.3
Notes to Consolidated Financial Statements
Gross
Gross
Amortized
Unrealized
Unrealized
(in millions)
Cost
Gains
Losses
Fair Value
$
43.4
$
0.6
$
(0.5
)
$
43.5
36.1
2.0
(0.2
)
37.9
$
79.5
$
2.6
$
(0.7
)
$
81.4
Gross
Gross
Amortized
Unrealized
Unrealized
(in millions)
Cost
Gains
Losses
Fair Value
$
34.6
$
0.2
$
(0.3
)
$
34.5
35.2
2.2
-
37.4
$
69.8
$
2.4
$
(0.3
)
$
71.9
Financial
Period Ended December 31, 2010
(in millions)
Transmission Rights
Other Derivatives
Total
$
1.9
$
0.2
$
2.1
(16.3)
-
(16.3)
14.4
-
14.4
$
-
$
0.2
$
0.2
$
-
$
-
$
-
Notes to Consolidated Financial Statements
Financial
Period Ended December 31, 2009
(in millions)
Transmission Rights
Other Derivatives
Total
$
2.6
$
1.6
$
4.2
(1.9)
-
(1.9)
1.2
(1.4)
(0.2)
$
1.9
$
0.2
$
2.1
$
(1.9)
$
-
$
(1.9)
Notes to Consolidated Financial Statements
Quoted Prices in
Active Markets
Significant Other
Significant
for Identical
Observable
Unobservable
Non-Recurring Fair Value Measurements
Balance as of
Assets
Inputs
Inputs
Total Gains
(in millions)
Dec. 31, 2009
(Level 1)
(Level 2)
(Level 3)
(Losses)
$
7.0
$
-
$
-
$
7.0
$
(5.1)
27.0
-
-
27.0
(16.6)
10.0
-
-
10.0
(4.5)
$
44.0
$
-
$
-
$
44.0
$
(26.2)
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
(in millions)
Total
2011
2012
2013
2014
2015
After
$
5,430.9
$
-
$
315.0
$
545.0
$
500.0
$
230.0
$
3,840.9
194.5
112.5
0.1
-
-
-
81.9
275.0
275.0
-
-
-
-
-
1,107.5
1,107.5
-
-
-
-
-
32.5
14.2
16.4
-
1.9
-
-
323.4
2.0
13.2
223.5
32.2
-
52.5
$
7,363.8
$
1,511.2
$
344.7
$
768.5
$
534.1
$
230.0
$
3,975.3
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
The actions listed below could require further reductions in emissions from various emission
sources. NiSource will continue to closely monitor developments in these matters.
Notes to Consolidated Financial Statements
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 up to 84 such sites and initial
investigations have been conducted at 56 sites. Follow-up investigation activities have been
completed or are in progress at 50 sites and remedial measures have been implemented or completed
at 37 sites. Remedial actions at many of these sites are being overseen by state or federal
environmental agencies through consent agreements or voluntary remediation agreements. The final
costs of cleanup have not yet been determined. As site investigations and cleanups proceed
reserves are adjusted to reflect new information.
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.
Notes to Consolidated Financial Statements
Northern Indiana expects to become subject to a number of new air-quality mandates in the next several
years. These mandates would arise from new environmental regulations and from a Federal consent
decree and would require Northern Indiana to make capital improvements to its electric generating
stations. The cost of these improvements is estimated to be $560 to $800 million. Northern Indiana
expects that some or all of these costs will likely be recoverable from ratepayers.
Notes to Consolidated Financial Statements
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. As a result
of a December 3, 2010 settlement, the EPA is obligated to finalize a rule in 2012. The Bailly Generating Station is the only
Northern Indiana generating station that does not utilize closed cycle cooling. Northern Indiana
will continue to closely monitor this activity and cannot estimate the costs associated with the
ultimate outcome at this time.
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. The final costs of cleanup could change
based on EPA review.
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.
Notes to Consolidated Financial Statements
Operating
Capital
(in millions)
Leases
Leases (a)
$ 39.5
$ 9.2
33.1
9.0
26.1
7.5
22.3
7.5
14.2
6.4
59.4
12.3
$ 194.6
$ 51.9
Notes to Consolidated Financial Statements
Vertex
Energy
Pipeline
IBM
Outsourcing
Other
Commodity
Service
Service
LLC Service
Service
(in millions)
Agreements
Agreements
Agreement
Agreement
Agreements
Total
$
258.3
$
257.4
$
94.4
$
12.1
$
143.4
$
765.6
124.2
253.9
90.4
12.0
53.6
534.1
101.7
197.6
89.2
11.9
5.8
406.2
76.8
162.9
86.4
11.8
-
337.9
79.1
147.9
39.5
5.9
-
272.4
-
642.8
-
-
-
642.8
$
640.1
$
1,662.5
$
399.9
$
53.7
$
202.8
$
2,959.0
Notes to Consolidated Financial Statements
Year Ended December 31,
(in millions)
2010
2009
$
6.1
$
4.2
(2.4
)
(1.6
)
(56.4
)
(35.0
)
21.6
14.0
(43.3
)
(44.4
)
16.5
16.9
$
(57.9
)
$
(45.9
)
Year Ended December 31,
(in millions)
2010
2009
2008
$
6.3
$
6.8
$
15.4
-
(8.4
)
(14.6
)
(2.5
)
0.2
16.8
$
3.8
$
(1.4
)
$
17.6
Notes to Consolidated Financial Statements
Year Ended December 31,
(in millions)
2010
2009
2008
$
390.7
$
386.7
$
358.7
1.9
2.3
28.6
8.5
13.0
7.7
6.3
-
-
(2.7
)
(1.9
)
(9.8
)
(12.4
)
(0.8
)
(5.2
)
$
392.3
$
399.3
$
380.0
Notes to Consolidated Financial Statements
Year Ended December 31,
(in millions)
2010
2009
2008
$
3,657.4
$
3,885.3
$
5,722.2
10.7
17.1
18.4
3,668.1
3,902.4
5,740.6
780.3
719.1
652.5
168.9
211.6
212.8
949.2
930.7
865.3
1,394.0
1,220.6
1,361.9
0.7
0.8
0.8
1,394.7
1,221.4
1,362.7
590.3
825.6
1,143.6
435.9
422.1
408.9
1,026.2
1,247.7
1,552.5
(616.2
)
(651.6
)
(640.9
)
$
6,422.0
$
6,650.6
$
8,880.2
Notes to Consolidated Financial Statements
Year Ended December 31,
(in millions)
2010
2009
2008
$
332.7
$
327.8
$
336.1
377.1
388.5
369.7
235.5
116.7
219.2
(24.0
)
(32.0
)
(6.0
)
$
921.3
$
801.0
$
919.0
$
239.3
$
248.1
$
228.8
130.7
121.5
117.6
211.0
205.6
209.6
15.3
14.1
11.0
$
596.3
$
589.3
$
567.0
$
7,356.5
$
7,000.5
$
7,436.0
3,996.5
3,834.5
4,033.3
4,177.2
4,183.7
4,198.3
4,408.6
4,253.0
4,364.6
$
19,938.8
$
19,271.7
$
20,032.2
$
401.9
$
349.2
$
373.1
235.4
256.1
359.8
158.7
165.2
549.5
7.8
6.7
17.5
$
803.8
$
777.2
$
1,299.9
Notes to Consolidated Financial Statements
First
Second
Third
Fourth
(in millions, except per share data)
Quarter
Quarter
Quarter
Quarter
$
2,358.7
$
1,171.1
$
1,138.1
$
1,754.1
403.4
139.2
123.3
255.4
197.4
28.0
33.4
35.8
(0.1
)
0.1
(0.2
)
(2.4
)
197.3
28.1
33.2
33.4
0.71
0.10
0.12
0.13
-
-
-
(0.01
)
$
0.71
$
0.10
$
0.12
$
0.12
0.71
0.10
0.12
0.12
-
-
-
(0.01
)
$
0.71
$
0.10
$
0.12
$
0.11
$
2,722.0
$
1,268.6
$
974.9
$
1,685.1
348.2
111.7
93.6
247.5
159.2
(4.0
)
(13.2
)
88.5
(10.8
)
(0.8
)
(2.2
)
1.0
148.4
(4.8
)
(15.4
)
89.5
0.58
(0.01
)
(0.05
)
0.32
(0.04
)
-
(0.01
)
-
$
0.54
$
(0.01
)
$
(0.06
)
$
0.32
0.58
(0.01
)
(0.05
)
0.32
(0.04
)
-
(0.01
)
-
$
0.54
$
(0.01
)
$
(0.06
)
$
0.32
Notes to Consolidated Financial Statements
Year Ended December 31,
(in millions)
2010
2009
2008
$
62.1
$
2.6
$
70.2
(24.1
)
38.8
(48.1
)
19.7
15.3
-
$
393.0
$
380.7
$
352.3
68.9
33.9
60.6
As of December 31,
(in millions)
2010
2009
$
9,241.0
$
8,955.8
9,241.0
8,955.8
244.8
169.3
244.8
169.3
56.6
84.9
9,542.5
9,210.0
4,923.2
4,854.1
4,923.2
4,854.1
644.2
361.3
3,932.4
3,934.0
42.7
60.6
$
9,542.5
$
9,210.0
Condensed Financial Information of Registrant
Year Ended December 31,
(in
millions, except per share amounts)
2010
2009
2008
$
440.6
$
363.1
$
496.3
(11.4
)
(12.6
)
(14.0
)
0.7
0.5
2.5
(230.3
)
(207.6
)
(215.2
)
(4.0
)
(4.0
)
(2.7
)
(245.0
)
(223.7
)
(229.4
)
195.6
139.4
266.9
(99.0
)
(91.1
)
(103.7
)
294.6
230.5
370.6
(2.7
)
(10.3
)
(183.4
)
0.1
(2.5
)
(108.2
)
$
292.0
$
217.7
$
79.0
277.8
275.1
274.0
280.1
275.8
275.4
$
1.06
$
0.84
$
1.35
(0.01
)
(0.05
)
(1.06
)
$
1.05
$
0.79
$
0.29
$
1.05
$
0.84
$
1.35
(0.01
)
(0.05
)
(1.06
)
$
1.04
$
0.79
$
0.29
Condensed Financial Information of Registrant
Year Ended December 31,
(in millions)
2010
2009
2008
$
212.9
$
217.2
$
43.0
-
(0.4
)
14.3
-
-
82.0
31.4
39.1
(2.7
)
31.4
38.7
93.6
14.4
10.6
1.3
(1.6
)
(10.8
)
114.3
(255.6
)
(253.3
)
(252.4
)
(1.5
)
(2.6
)
-
(244.3
)
(256.1
)
(136.8
)
-
(0.2
)
(0.2
)
-
0.2
0.4
$
-
$
-
$
0.2
Condensed Financial Information of Registrant
At December 31,
(in millions)
2010
2009
$
167.2
$
169.2
582.3
352.5
3,932.4
3,934.0
Additions
Deductions for
Charged to
Charged
Purposes for
Balance
Costs and
to Other
which Reserves
Balance
($ in millions)
Jan. 1, 2010
Expenses
Account *
Sale of Assets
were Created
Dec. 31, 2010
39.6
17.6
72.5
-
92.3
37.4
3.0
-
-
-
-
3.0
5.7
(2.9
)
-
-
0.1
2.7
Additions
Deductions for
Charged to
Charged
Purposes for
Balance
Costs and
to Other
which Reserves
Balance
($ in millions)
Jan. 1, 2009
Expenses
Account *
Sale of Assets
were Created
Dec. 31, 2009
45.3
68.9
75.7
-
150.3
39.6
3.0
-
-
-
-
3.0
5.7
-
-
-
-
5.7
Additions
Deductions for
Charged to
Charged
Purposes for
Balance
Costs and
to Other
which Reserves
Balance
($ in millions)
Jan. 1, 2008
Expenses
Account *
Sale of Assets
were Created
Dec. 31, 2008
37.0
79.2
56.6
(0.2
)
127.3
45.3
3.0
-
-
-
-
3.0
5.7
-
-
-
-
5.7
*
Charged to Other Accounts reflects the deferral of bad debt expense to a regulatory asset.
NiSources chief executive officer and its principal financial officer, after evaluating the
effectiveness of NiSources 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,
NiSources disclosure controls and procedures were effective to provide reasonable assurance that
financial information was processed, recorded and reported accurately.
NiSource management, including NiSources principal executive officer and principal financial
officer, are responsible for establishing and maintaining NiSources internal control over
financial reporting, as such term is defined under Rule 13a-15(f) promulgated under the Securities
Exchange Act of 1934, as amended. However, management would note that a control system can provide
only reasonable, not absolute, assurance that the objectives of the control system are met.
NiSources management has adopted the framework set forth in the Committee of Sponsoring
Organizations of the Treadway Commission report, Internal Control - Integrated Framework, the most
commonly used and understood framework for evaluating internal control over financial reporting, as
its framework for evaluating the reliability and effectiveness of internal control over financial
reporting. During 2010, NiSource conducted an evaluation of its internal control over financial
reporting. Based on this evaluation, NiSource management concluded that NiSources internal
control over financial reporting was effective as of the end of the period covered by this annual
report.
There have been no changes in NiSources internal control over financial reporting during the
fiscal year covered by this report that has materially affected, or is reasonably likely to affect,
NiSources internal control over financial reporting.
162
163
All of the financial statements and financial statement schedules filed as a part of the Annual
Report on Form 10-K are included in Item 8.
The exhibits filed herewith as a part of this report on Form 10-K are listed on the Exhibit Index
immediately following the signature page. Each management contract or compensatory plan or
arrangement of NiSource, listed on the Exhibit Index, is separately identified by an asterisk.
164
Date
February 28, 2011
By:
/s/
Robert C. Skaggs, Jr.
Robert C. Skaggs, Jr.
President, Chief Executive Officer and Director
(Principal Executive Officer)
President, Chief
Executive Officer and Director
(Principal Executive Officer)
February 28, 2011
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
February 28, 2011
Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
February 28, 2011
Chairman and Director
February 28, 2011
Director
February 28, 2011
Director
February 28, 2011
Director
February 28, 2011
Director
February 28, 2011
Director
February 28, 2011
Director
February 28, 2011
Director
February 28, 2011
Director
February 28, 2011
Director
February 28, 2011
165
166
167
EXHIBIT
DESCRIPTION OF ITEM
NUMBER
Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to the NiSource Inc. Form 10-Q filed on
August 4, 2008).
Bylaws of NiSource Inc., as amended and restated through May 11,
2010 (incorporated by reference to Exhibit 3.1 to the NiSource
Inc. Form 8-K filed on May 14, 2010).
Indenture dated as of March 1, 1988, between Northern Indiana and
Manufacturers Hanover Trust Company, as Trustee (incorporated by
reference to Exhibit 4 to the Northern Indiana Registration
Statement (Registration No. 33-44193)).
First Supplemental Indenture dated as of December 1, 1991, between
Northern Indiana and Manufacturers Hanover Trust Company, as
Trustee (incorporated by reference to Exhibit 4.1 to the Northern
Indiana Registration Statement (Registration No. 33-63870)).
Indenture Agreement between NIPSCO Industries, Inc., NIPSCO
Capital Markets, Inc. and Chase Manhattan Bank as trustee dated
February 14, 1997 (incorporated by reference to Exhibit 4.1 to the
NIPSCO Industries, Inc. Registration Statement (Registration No.
333-22347)).
Second Supplemental Indenture, dated as of November 1, 2000 among
NiSource Capital Markets, Inc., NiSource Inc., New NiSource Inc.,
and The Chase Manhattan Bank, as trustee (incorporated by
reference to Exhibit 4.45 to the NiSource Inc. Form 10-K for the
period ended December 31, 2000).
Indenture, dated November 14, 2000, among NiSource Finance Corp.,
NiSource Inc., as guarantor, and The Chase Manhattan Bank, as
Trustee (incorporated by reference to Exhibit 4.1 to the NiSource
Inc. Form S-3, dated November 17, 2000 (Registration No.
333-49330)).
2010 Omnibus Incentive Plan (incorporated by reference to Exhibit
B to NiSource Inc. Definitive Proxy Statement to Shareholders
held on May 11, 2010, filed on April 2, 2010).*
NiSource Inc. Nonemployee Director Stock Incentive Plan as amended
and restated effective May 13, 2008 (incorporated by reference to
Exhibit 10.1 to the NiSource Inc. Form 10-K filed on February 27,
2009).*
NiSource Inc. Nonemployee Director Retirement Plan, as amended and
restated effective May 13, 2008. (incorporated by reference to
Exhibit 10.2 to the NiSource Inc. Form 10-K filed on February 27,
2009).*
Amended and Restated NiSource Inc. Directors Charitable Gift
Program effective May 13, 2008. (incorporated by reference to
Exhibit 10.3 to the NiSource Inc. Form 10-K filed on February 27,
2009).*
Supplemental Life Insurance Plan effective January 1, 1991, as
amended, (incorporated by reference to Exhibit 2 to the NIPSCO
Industries, Inc. Form 8-K filed on March 25, 1992). *
NiSource Inc. Executive Deferred Compensation Plan, as amended and
restated, effective January 1, 2008 (incorporated by reference to
Exhibit 10.3 to the NiSource Inc. Form 10-Q filed on November 4,
2008). *
Form of Change in Control and Termination Agreement (applicable to
each named executive officer)(incorporated by reference to Exhibit
10.7 to the NiSource Inc. Form 10-Q filed on November 4, 2008). *
Form of Agreement between NiSource Inc. and certain officers of
Columbia Energy Group and schedule of parties to such Agreements
(incorporated by reference to Exhibit 10.33 to the NiSource Inc.
Form 10-K for the period ended December 31, 2002). *
NiSource Inc. 1994 Long-Term Incentive Plan, as amended and
restated effective January 1, 2005 (incorporated by reference to
Exhibit 10.4 to the NiSource Inc. Form 8-K filed on December 2,
2005). *
1st Amendment to NiSource Inc. 1994 Long Term Incentive Plan, effective January
22, 2009. (incorporated by reference to Exhibit 10.10 to the NiSource Inc. Form
10-K filed on February 27, 2009). *
Form of Nonqualified Stock Option Agreement under the NiSource Inc. 1994 Long-Term
Incentive Plan (incorporated by reference to Exhibit 10.2 to the NiSource Inc.
Form 8-K filed on January 3, 2005). *
Form of 2008 Contingent Stock Agreement under NiSource Inc. 1994 Long-Term
Incentive Plan. (incorporated by reference to Exhibit 10.12 to the NiSource Inc.
Form 10-K for the period ended December 31, 2008). *
Form of 2009 Contingent Stock Agreement under the NiSource Inc 1994 Long-Term
Incentive Plan. (incorporated by reference to Exhibit 10.2 to the NiSource Inc.
from 10-Q filed on May 1, 2009) *
Form of 2010 Contingent Agreement under the NiSource Inc. 1994 Long-Term Incentive
Plan (incorporated by reference to Exhibit 10.1 to NiSource Inc. Form 10-Q filed
on May 4, 2010).*
Form of 2010 Contingent Stock Agreement under the 2010 Omnibus Incentive Plan. * **
Form of 2010 Restricted Stock Unit Award Agreement for Nonemployee Directors under
the 2010 Omnibus Incentive Plan. * **
Form of Restricted Stock Unit Agreement under the NiSource Inc. 1994 Long-Term
Incentive Plan. * **
Form of 2010 Restricted Stock Agreement under the 2010 Omnibus Incentive Plan. * **
Form of Restricted Stock Unit Award Agreement for Non-employee directors under the
Non-employee Director Stock Incentive Plan.* **
NiSource Inc. Supplemental Executive Retirement Plan as Amended and Restated
effective January 1, 2010. **
NiSource Inc. Executive Severance Policy, as amended and restated, effective
January 1, 2010 (incorporated by reference to Exhibit 10.3 to the NiSource Inc.
Form 10-Q filed on May 4, 2010).
Pension Restoration Plan for NiSource Inc. and Affiliates as amended and restated
effective January 1, 2010. **
Savings Restoration Plan for NiSource Inc. and Affiliates as amended and restated
effective January 1, 2010. **
Letter Agreement between NiSource Corporate Services Company and Christopher A.
Helms dated March 15, 2005 (incorporated by reference to Exhibit 10.2 to the
NiSource Inc. Quarterly Report on Form 10-Q for the period ended June 30, 2005). *
Letter Agreement between NiSource Corporate Services Company and Jimmy Staton
dated December 13, 2007. (incorporated by reference to Exhibit 10.23 to the
NiSource Inc. Form 10-K filed on February 27, 2009).*
Letter Agreement between NiSource Corporate Services Company and Stephen P. Smith
dated May 14, 2008. (incorporated by reference to Exhibit 10.24 to the NiSource
Inc. Form 10-K filed on February 27, 2009).*
Amended and Restated Revolving Credit Agreement among NiSource Finance Corp., as
Borrower, NiSource Inc., as Guarantor, the lender parties thereto as Lenders,
Credit Suisse as Syndication Agent, JPMorgan Chase Bank, N.A., The Bank Of
Tokyo-Mitsubishi UFJ, Ltd., Chicago Branch and Citicorp USA, Inc., as
Co-Documentation Agents and Barclays Bank PLC, as Administrative Agent and LC Bank
dated July 7, 2006 (incorporated by reference to Exhibit 10.2 to the NiSource Inc.
Form 10-Q for the period ended June 30, 2006).
Amendment No. 1, dated as of September 19, 2008, to the Amended
and Restated Revolving Credit Agreement among NiSource Finance
Corp, as Borrower, NiSource Inc., as Guarantor, the lender parties
thereto as Lenders, and Barclays Bank PLC as Administrative Agent
and LC Bank. (incorporated by reference to Exhibit 10.28 to the
NiSource Inc. Form 10-K filed on February 27, 2009).
Note Purchase Agreement, dated August 23, 2005, by and among
NiSource Finance Corp., as issuer, NiSource Inc., as guarantor,
and the purchasers named therein (incorporated by reference to
Exhibit 10.1 to the NiSource Inc. Current Report on Form 8-K filed
on August 26, 2005).
Amendment No. 1, dated as of November 10, 2008, to the Note
Purchase Agreement by and among NiSource Finance Corp., as issuer,
NiSource Inc., as guarantor, and the purchasers whose names appear
on the signature page thereto. (incorporated by reference to
Exhibit 10.30 to the NiSource Inc. Form 10-K filed on February 27,
2009).
Guaranty of NiSource Inc. in favor of JPMorgan Chase Bank, N.A.,
as administrative agent (incorporated by reference to Exhibit 10.1
to the NiSource Inc. Form 8-K filed on August 30, 2007).
Agreement for Business Process and Support Services between
NiSource Corporate Services Company and IBM, effective June 20,
2005 (incorporated by reference to Exhibit 10.1 to the NiSource
Inc. Form 10-Q for the period ended June 30, 2005).
Amendment #4 to Agreement for Business Process and Support
Services between NiSource Corporate Services Company and IBM,
effective December 1, 2007 (incorporated by reference to Exhibit
10.30 to the NiSource Inc. Form 10-K for the period ended December
31, 2007).*
Letter agreement, dated September 8, 2010 between NiSource Inc.
and Credit Suisse International (incorporated by reference to
Exhibit 1.2 to the NiSource Inc. Current Report on Form 8-K filed
on September 14, 2010).
Letter agreement, dated September 9, 2010 between NiSource Inc.
and Credit Suisse International (incorporated by reference to
Exhibit 1.3 to the NiSource Inc. Current Report on Form 8-K filed
on September 14, 2010).
Ratio of Earnings to Fixed Charges. **
List of Subsidiaries. **
Consent of Deloitte & Touche LLP. **
Certification of Robert C. Skaggs, Jr., Chief Executive Officer,
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. **
Certification of Stephen P. Smith, Chief Financial Officer,
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. **
Certification of Robert C. Skaggs, Jr., Chief Executive Officer,
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(furnished herewith). **
Certification of Stephen P. Smith, Chief Financial Officer,
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(furnished herewith). **
*
Management contract or compensatory plan or arrangement of NiSource Inc.
**
Exhibit filed herewith.
(a) | Performance Restrictions . The Performance Restrictions shall lapse on the date the Committee certifies the following: |
(i) | The Performance Restrictions of one-half of the Award shall lapse based on achievement of cumulative net operating earnings per Share for the Performance Period in accordance with the following schedule: |
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(ii) | The Performance Restrictions of one-quarter of the Award shall lapse based on cumulative funds from operations for the Performance Period in accordance with the following schedule: |
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(iii) | The Performance Restrictions of one-quarter of the Award shall lapse based on the Companys total debt as of the last day of the Performance Period in accordance with the following schedule: |
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(b) | Committee Certification . As soon as practicable after the end of the Performance Period, the Committee will certify in writing whether the Performance Restrictions have been met for the Performance Period and determine the number of Shares, if any, that will be payable to the Grantee; provided, however, that if the Committee certifies that the Performance Restrictions have been met, the Committee may, in its sole discretion, adjust the number of Shares payable to the Grantee with respect to the Award to reflect the effect of extraordinary events upon the Performance Restrictions, as provided under the Plan. The date of the Committees certification under this Section shall hereinafter be referred to as the Certification Date. The Company will notify the Grantee (or the executors or administrators of the Grantees estate, if appropriate) of the Committees certification following the Certification Date (such notice being the Determination Notice). The Determination Notice shall specify (i) the Companys cumulative net operating earnings per share, cumulative funds from operations and total debt for the Performance Period and (ii) the number of Shares payable in accordance with the Committees certification. | ||
(c) | Effect of Termination of Service Before the End of the Performance Period . Except as set forth below, if Grantees Service is terminated for any reason prior to the last day of the Performance Period or prior to the occurrence of any otherwise applicable vesting date or event provided in this Section, the Grantee shall forfeit any Performance Shares that have not yet become vested. Notwithstanding the foregoing, in the event that Grantees Service terminates as a result of Grantees Retirement, Disability, or death with less than or equal to 12 months remaining in the Performance Period, the Grantee shall receive a pro rata distribution of Shares after the certification date described in part (a) above; provided that the Committee actually certifies that the Performance Restrictions for the Performance Period have been met. Such pro rata grant of Shares shall be determined using a fraction, where the numerator shall be the number of full or |
3
partial calendar months elapsed between the Date of Grant and the date the Grantee terminates Service, and the denominator shall be the number of full or partial calendar months elapsed between the Date of Grant and the last day of the Performance Period. Additionally, if before the lapse of the Performance Restrictions, the Grantee terminates Service due to death with more than 12 months remaining in the Performance Period, the Grantee shall receive, as soon as practicable after the date of termination, a pro rata distribution of Shares equal to the number of Shares that the Grantee otherwise would have received had the Performance Restrictions been met for the Performance Period. The Grantee will not be entitled to any additional Shares under this Section for exceeding the Performance Restrictions. Such pro rata grant of Shares shall be determined using a fraction, where the numerator shall be the number of full or partial calendar months elapsed between the Date of Grant and the date the Grantee terminates Service, and the denominator shall be the number of full or partial calendar months elapsed between the Date of Grant and the last day of the Performance Period. For purposes of this Agreement, Retirement means the Grantees attainment of age 55 and 10 years of Service. | |||
(d) | Change in Control . Notwithstanding the foregoing provisions, all Performance Shares shall become fully and immediately vested, and all restrictions shall lapse, on the fifth business day before the date of consummation of a Change in Control of the Company. | ||
(e) | Code Section 162(m) Limitation . Notwithstanding the previous provisions of this Section, during any calendar year with respect to which the Grantee is a Covered Officer (for purposes of Internal Revenue Code (Code) Section 162 (m)), if the Grantee otherwise would vest in a number of Performance Shares under this Section, the Grantee instead shall vest only with respect to a sufficient number of Performance Shares whose aggregate Fair Market Value on the date such restrictions would, when added to the Grantees applicable employee remuneration (as defined in Code Section 162(m)) for the applicable calendar year that does not constitute qualified performance-based compensation (as defined in Code Section 162(m)), not exceed the aggregate amount of $999,999.00 for the applicable calendar year (the Limitation). | ||
To the extent the restrictions on any Performance Shares do not lapse due to the application of this Section, the restrictions on such Performance Shares shall lapse on the first to occur of: |
(i) | the last business day of any subsequent calendar year or years to the extent that the Limitation is not exceeded for such year or years; | ||
(ii) | the date next following the Grantees termination of Service for any reason other than for Cause, or |
4
(iii) | the first business day of the year next following the year with respect to which the Grantee ceases to be a Covered Officer. |
5
(a) | The Grantee shall not have any privileges of a stockholder of the Company with respect to any Performance Shares subject to this Agreement, nor shall the Company have any obligation to issue any dividends or otherwise afford any rights to which Shares are entitled with respect to any such Performance Shares. | ||
(b) | Nothing in this Agreement or the Award shall confer upon the Grantee any right to continue as an Employee of the Company or any Affiliate or to interfere in any way with the right of the Company or any Affiliate to terminate the Grantees Service at any time. |
6
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1
(a) | Unless and until Shares have been issued to the Grantee, the Grantee shall not have any privileges of a stockholder of the Company with respect to any Restricted Stock Units subject to this Agreement. Notwithstanding the preceding sentence, the Grantee shall be entitled to receive dividend equivalents or other distributions declared on any Shares underlying the RSUs. Dividend equivalents will be aggregated and credited to Grantees RSU Account in the form of additional RSUs based on the Fair Market Value on the dividend payment date. Dividend equivalents shall be fully vested and subject to restriction and distribution provisions of this Agreement. Dividend equivalents will be paid from the Plan on all undistributed RSUs held in the Grantees RSU Account. | ||
(b) | Nothing in this Agreement or the Award shall confer upon the Grantee any right to continue as a Nonemployee Director of the Company or any Affiliate or to |
2
interfere in any way with the right of the Company or any Affiliate to terminate the Grantees Service at any time. |
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4
(a) | Vesting . Subject to the forfeiture conditions described later in this Agreement, the Restricted Stock Units shall not vest until _____________________, at which date they will become 100% vested. | ||
(b) | Effect of Termination of Service . Except as set forth below, if Grantees Service is terminated for any reason prior to the occurrence of any otherwise applicable vesting date or event provided in this Section, the Grantee shall forfeit any Restricted Stock Units that have not yet become vested. Notwithstanding the foregoing, if, before _____________________, the Grantee terminates Service due to the Grantees Retirement, death, or Disability, the restrictions set forth in part (a) above shall lapse with respect to a pro rata portion of such Restricted Stock Units on the date of such termination of Service. Such pro rata lapse of the restrictions shall be determined using a fraction, where the numerator shall be the number of full or partial calendar months elapsed between the Date of Grant and the date the Grantee terminates Service, and the denominator shall be the number of full or partial calendar months between the Date of Grant and ____________________. For purposes of this Agreement, Retirement means the Grantees attainment of age 55 and 10 years of Service. | ||
(c) | Change in Control . Notwithstanding the foregoing provisions, all Restricted Stock Units shall become fully and immediately vested, and all restrictions shall |
1
lapse, on the fifth business day before the date of consummation of a Change in Control of the Company. | |||
(d) | Limitation on Restricted Stock Units . Notwithstanding the previous provisions of this Section, during any calendar year with respect to which the Grantee is a Covered Officer (for purpose of Internal Revenue Code (Code) Section 162(m)), if the Grantee otherwise would vest in a number of Restricted Stock Units under this Section, the Grantee instead shall vest only with respect to a sufficient number of Restricted Stock Units whose aggregate Fair Market Value on the date such restrictions would, when added to the Grantees applicable employee remuneration (as defined in Code Section 162(m)) for the applicable calendar year that does not constitute qualified performance-based compensation (as defined in Code Section 162(m)), not exceed the aggregate amount of $999,999.00 for the applicable calendar year (the Limitation). | ||
To the extent the restrictions on any Restricted Stock Units do not lapse due to the application of this Section, the restrictions on such Restricted Stock Units shall lapse on the first to occur of: |
(i) | the last business day of any subsequent calendar year or years to the extent that the Limitation is not exceeded for such year or years; | ||
(ii) | the date next following the Grantees termination of Service for any reason other than for Cause, or | ||
(iii) | the first business day of the year next following the year with respect to which the Grantee ceases to be a Covered Officer. |
2
(a) | Unless and until Shares have been issued to the Grantee, the Grantee shall not have any privileges of a stockholder of the Company with respect to any Restricted Stock Units subject to this Agreement, nor shall the Company have any obligation to issue any dividends or otherwise afford any rights to which Shares are entitled with respect to any such Restricted Stock Units. | ||
(b) | Nothing in this Agreement or the Award shall confer upon the Grantee any right to continue as an Employee of the Company or any Affiliate or to interfere in any way with the right of the Company or any Affiliate to terminate the Grantees Service at any time. |
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5
(a) | Vesting . Subject to the forfeiture conditions described later in this Agreement, the shares of Restricted Stock shall not vest until _________________, at which date the shares of Restricted Stock will become 100% vested. | ||
(b) | Effect of Termination of Service . Except as set forth below, if Grantees Service is terminated for any reason prior to the occurrence of any otherwise applicable vesting date or event provided in this Section 2, the Grantee shall forfeit any shares of Restricted Stock that have not yet become vested. Notwithstanding the foregoing, if, before _________________, the Grantee terminates Service due to the Grantees Retirement, death, or Disability, the restrictions set forth in part (a) above shall lapse with respect to a pro rata portion of such shares of Restricted Stock on the date of such termination of Service. Such pro rata lapse of the restrictions shall be determined using a fraction, where the numerator shall be the number of full or partial calendar months elapsed between the Date of Grant and the date the Grantee terminates Service, and the denominator shall be the number of full or partial calendar months between the Date of Grant and ________________. For purposes of this Agreement, Retirement means the Grantees attainment of age 55 and 10 years of Service. | ||
(c) | Change in Control . Notwithstanding the foregoing provisions, all the shares of Restricted Stock shall become fully and immediately vested, and all restrictions shall lapse, on the fifth business day before the date of consummation of a Change in Control of the Company. |
1
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(a) | Except as otherwise provided in this Agreement, the Grantee shall have all the rights of a stockholder of the Company, including voting rights and the right to receive dividends, with respect to shares of Restricted Stock in which the restrictions described in this Agreement have not yet lapsed. Notwithstanding the foregoing, no dividends will be payable to the Grantee with respect to record dates for such dividends occurring before the Date of Grant, or with respect to record dates for such dividends occurring on or after the date, if any, for which the Grantee has forfeited the shares of Restricted Stock. | ||
(b) | Nothing in this Agreement or the Award shall confer upon the Grantee any right to continue as an Employee of the Company or any Affiliate or to interfere in any way with the right of the Company or any Affiliate to terminate the Grantees Service at any time. |
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By
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ARTICLE I PURPOSE
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ARTICLE II DEFINITIONS
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2.1 Affiliate
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2.2 Benefits Committee
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2.3 Board
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2.4 Code
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2.5 Committee
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2.6 Company
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2.7 Compensation
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2.8 Disability or Disabled
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2.9 Early Retirement
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2.10 Final Average Compensation
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2.11 NiSource Pension Plan
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2.12 Normal Retirement
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2.13 Participant
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2.14 Pension
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2.15 Pension Restoration Plan
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2.16 Plan
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2.17 Post-2004 Benefit
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2.18 Pre-2005 Benefit
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2.19 Primary Social Security Benefit
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2.20 Qualified Pension Plan
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2.21 Retirement
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2.22 Service
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ARTICLE III PARTICIPATION
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ARTICLE IV SUPPLEMENTAL RETIREMENT PENSION
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4.1 Applicability
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4.2 Supplemental Retirement Pension
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4.3 Reduction for Early Retirement
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4.4 Separation from Service Prior to Early Retirement
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6 | |||
4.5 Supplemental Disability Pension
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4.6 Supplemental Spouse Pension
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4.7 Retiree Death Benefit
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4.8 Cost of Living Adjustment
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4.9 Separate Agreement
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ARTICLE V SUPPLEMENTAL RETIREMENT ACCOUNT
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5.1 Applicability
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5.2 Supplemental Retirement Account
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5.3 Supplemental Credits
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5.4 Separation from Service
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5.5 Death
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ARTICLE VI DISTRIBUTIONS
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6.1 Pre-2005 Benefit
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6.2 Post-2004 Benefit
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ARTICLE VII MISCELLANEOUS
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7.1 Plan Financing
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7.2 Non-Compete and Related Provisions
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7.3 Nonguarantee of Employment
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7.4 Nonalienation of Benefits
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7.5 Plan Amendment or Termination
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7.6 Indemnification
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7.7 Action by Company
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7.8 Protective Provisions
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7.9 Governing Law
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7.10 Notice
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7.11 Successors
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7.12 Actuarial Assumptions
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7.13 Tax Savings
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ARTICLE VIII CHANGE IN CONTROL
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8.1 Change in Control
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8.2 Potential Change in Control
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8.3 Additional Service and Compensation Upon Change in Control
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8.4 Waiver of Service and Age Requirements Upon Change in Control
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8.5 Funding of Plan Benefits Upon Potential Change in Control
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8.6 Plan Administration and Amendment Upon a Change in Control
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8.7 Committee Discretion to Pay Lump Sum After a Change in Control
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8.8 Lump Sum Election
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8.9 Definitions
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ARTICLE IX PLAN ADMINISTRATION: THE COMMITTEE
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9.1 General Powers, Rights and Duties
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9.2 Information Required by Committee
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9.3 Committee Decision Final
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9.4 Claims Procedure
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(a) | The Participant attained age 65 in the year of Retirement, and | ||
(b) | The Participant earned maximum taxable wages under Code Section 3121(a)(1) in all years prior to the year of Retirement. A Participants Primary Social Security Benefit will be deducted in accordance with Article IV, even though he or she may not be receiving or may not be eligible to receive Social Security benefits. |
4
(a) | The sum of: |
(i) | 1.7% of the Participants Final Average Compensation multiplied by the Participants Service to a maximum of 30 years; plus | ||
(ii) | 0.6% of the Participants Final Average Compensation multiplied by the Participants Service in excess of 30 years. |
(b) | The sum of: |
(i) | 3% of the Participants Final Average Compensation multiplied by the Participants Service to a maximum of 20 years; plus |
(ii) | 0.5% of the Participants Final Average Compensation multiplied by the Participants Service in excess of 20 years, to a maximum of 30 years; |
(iii) | less 5% of the Participants Primary Social Security Benefit, multiplied by the Participants Service to a maximum of 20 years. |
5
(a) | The sum of: |
(i) | 1.7% of the Participants Final Average Compensation multiplied by the Participants Service to a maximum of 30 years, plus |
(ii) | 0.6% of the Participants Final Average Compensation multiplied by the Participants Service in excess of 30 years. |
6
(b) | The sum of: |
(i) | 3% of the Participants Final Average Compensation multiplied by the Participants Service to a maximum of 20 years; plus |
(ii) | 0.5% of the Participants Final Average Compensation multiplied by the Participants Service in excess of 20 years, to a maximum of 30 years; less |
(iii) | 5% of the Participants Primary Social Security Benefit, multiplied by the Participants Service to a maximum of 20 years. |
(a) | 25% of the Participants Final Average Compensation; or |
(b) | the monthly amount that would have been payable to such surviving spouse if the Participant had elected payment of his or her monthly Supplemental Retirement Pension in the form of a reduced 50% joint and survivor Pension, with his or her spouse as the contingent annuitant, terminated employment (on the date of his or her actual death) and then died immediately prior to the commencement of payments. |
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(a) | The Participants spouse; | ||
(b) | The Participants children in equal shares, except that if any of the children predeceases the Participant but leaves issue surviving, then such issue shall take, by right of representation, the share the parent would have taken if living; | ||
(c) | The Participants estate. |
(a) | Form of Payment . Notwithstanding Sections 4.2, 4.3 and 4.4, a Participant shall receive distribution of his or her Pre-2005 Benefit, pursuant to Articles IV or V, in the same form as his or her distribution under the NiSource Pension Plan, computed in the same manner as in the NiSource Pension Plan, or under any other Qualified Pension Plan, computed in the same manner as in such Qualified Pension Plan. Any election under the NiSource Pension Plan or any other Qualified Pension Plan shall apply to his or her Pre-2005 Benefit pursuant to the preceding sentence only if it is made by written instrument delivered to the |
9
Benefits Committee at least 30 days prior to the date of such distribution. If such election is not so made at least 30 days prior to the date of distribution of his or her Pre-2005 Benefit, the Participants Pre-2005 Benefit shall be paid as a 50% joint and survivor Pension if such Participant is married, or as a single-life Pension if such Participant is unmarried. If a Participant who makes an election pursuant to this subsection 6.1(a) at least 30 days prior to the date of distribution dies prior to distribution pursuant to such election, such election shall be revoked and the provisions of Article IV and subsection 6.1(b) shall apply. | |||
(b) | Small Benefit Amounts . At the discretion of the Committee, the present value of any Pre-2005 Benefit payable under the Plan that does not exceed $5,000 may be paid to the Participant or his or her surviving spouse or other designated beneficiary in quarterly, semi-annual or annual installments, or in a single lump sum. |
(a) | Form of Payment . The Post-2004 Benefit shall be payable in a form available under the NiSource Pension Plan, computed in the same manner as in the NiSource Pension Plan, or under any other Qualified Pension Plan, computed in the same manner as in such Qualified Pension Plan, as elected by a Participant by written notice delivered to the Benefits Committee on or before December 31, 2005. Notwithstanding the preceding sentence, in the case of an employee who first becomes a Participant on or after January 1, 2005, the aforementioned election with respect to a Post-2004 Benefit shall be made by written notice delivered to the Benefits Committee within 30 days after the date the Participant first becomes eligible to participate in the Plan and such election shall be effective with respect to Compensation related to services to be performed subsequent to the election; provided, however, that a Participant shall not be considered first eligible if, on the date he or she becomes a Participant, he or she participates in any other nonqualified plan of the same category (account balance or nonaccount balance, as applicable), which is subject to Code Section 409A, maintained by the Company or any Affiliate. If payment in the form of an annuity is elected, the annuity type shall be elected by the Participant at the time he or she makes the election described in the first or second sentence of this paragraph from among those annuities available at that time under the NiSource Pension Plan or under any other Qualified Pension Plan. If a Participant fails to elect a form of distribution, the Participants Post-2004 Benefit shall be payable in a lump sum. | ||
If a Participant who makes an election pursuant to this subsection 6.2(a) dies prior to distribution pursuant to such election, such election shall be revoked and the provisions of Article IV and subsection 6.2(b) shall apply. | |||
Any change in an election of a form of distribution available under the NiSource Pension Plan or any other Qualified Pension Plan shall apply to his or her |
10
Post-2004 Benefit pursuant to the preceding paragraph only if it is made by written instrument delivered to the Benefits Committee and if (i) such new election does not take effect until at least 12 months after the date on which the election is made, (ii) the first payment with respect to which such new election is effective is deferred for a period of not less than five (5) years from the date such payment would otherwise have been made, and (iii) such new election is not made less than 12 months prior to the date of the first scheduled payment; provided, however, that an election to change from one type of annuity payment to a different, actuarially equivalent, type of annuity payment shall not be considered a change to the method of payment for purposes of applying the restrictions in clauses (i), (ii) and (iii). | |||
Notwithstanding the preceding paragraph of this Section 6.2(a), a Participant may change an election with respect to the form of payment of a Post-2004 Benefit, without regard to the restrictions imposed under the preceding paragraph, on or before December 31, 2006; provided that such election (i) applies only to amounts that would not otherwise be payable in calendar year 2006, and (ii) shall not cause an amount to be paid in calendar year 2006 that would not otherwise be payable in such year. Additionally, a Participant may change an election with respect to the form of payment of a Post-2004 Benefit, without regard to the restrictions imposed under the preceding paragraph, on or before December 31, 2007; provided that such election (i) applies only to amounts that would not otherwise be payable in calendar year 2007, and (ii) shall not cause an amount to be paid in calendar year 2007 that would not otherwise be paid in such year. Additionally, a Participant may change an election with respect to the form of payment of a Post-2004 Benefit, without regard to the restrictions imposed by the preceding paragraph, on or before December 31, 2008; provided that such election (i) applies only to amounts that would not otherwise be payable before January 1, 2009, and (ii) shall not cause an amount to be paid in calendar year 2007 or 2008 that would not otherwise be paid in such years. | |||
(b) | Specified Employees . Notwithstanding any other provision of the Plan, in no event can a payment of a Post-2004 Benefit, pursuant to Article IV or Section 5.4, to a Participant who is a Specified Employee of the Company or an Affiliate, at a time during which the Companys capital stock or capital stock of an Affiliate is publicly traded on an established securities market, in the calendar year of his or her separation from Service be made before the date that is six months after the date of the Participants separation from Service with the Company and all Affiliates, unless such separation is due to his or her death or Disability. | ||
A Participant shall be deemed to be a Specified Employee for purposes of this paragraph (b) if he or she is in job category C2 or above with respect to the Company or any Affiliate that employs him or her; provided that if at any time the total number of employees in job category C2 and above is less than 50, a Specified Employee shall include any person who meets the definition of Key |
11
Employee set forth in Code Section 416(i) without reference to paragraph (5). A Participant shall be deemed to be a Specified Employee with respect to a calendar year if he or she is a Specified Employee on September 30th of the preceding calendar year. If a Specified Employee will receive payments hereunder in the form of installments or an annuity, the first payment made as of the date six months after the date of the Participants separation from Service with the Company and all Affiliates shall be a lump sum, paid as soon as practicable after the end of such six-month period, that includes all payments that would otherwise have been made during such six-month period. From and after the end of such six month period, any such installment or annuity payments shall be made pursuant to the terms of the applicable installment or annuity form of payment. |
(a) | A Participant, while employed by the Company or within a period of three years after the Participants separation from Service for any reason, including Retirement (the Restrictive Period), engages in activity or employment that directly or indirectly competes with the business of the Company or its Affiliates, including, but not by way of limitation, by directly or indirectly owning, managing, operating, controlling, financing, or by directly or indirectly serving as an employee, officer or director of or consultant to, or by soliciting or inducing, or attempting to solicit or induce, any employee or agent of the Company or its Affiliates to terminate employment with the Company or its Affiliates, and become employed by, any person, firm, partnership, corporation, trust or other entity that provides commodities, products or services to customers of the Company or its Affiliates of the same type as commodities, products or services provided by the Company or its Affiliates (the Restrictive Covenant). The foregoing Restrictive Covenant shall not prohibit a Participant from owning |
12
directly or indirectly capital stock or similar securities which are listed on a securities exchange or quoted on the National Association of Securities Dealers Automated Quotation System which do not represent more than 1% of the outstanding capital stock of any such entity; or | |||
(b) | A Participant performs any action or makes any statement that is detrimental to the Company or its Affiliates, unless such action or statement is retracted to the Companys satisfaction after the Participant is notified regarding such action or statement. |
13
(a) | Limitation of Liability . Notwithstanding any other provision of the Plan or the Trust, none of the Company, any member of the Committee, nor an individual acting as an employee or agent of any of them, shall be liable to any Participant or former Participant, or any surviving spouse or other designated beneficiary of any Participant or former Participant, for any claim, loss, liability or expense incurred in connection with the Plan or the Trust, except when the same shall have been judicially determined to be due to the willful misconduct of such person. | ||
(b) | Indemnity . The Company shall indemnify and hold harmless each member of the Committee, or any employee of the Company or any individual acting as an employee or agent of either of them (to the extent not indemnified or saved harmless under any liability insurance or any other indemnification arrangement with respect to the Plan or the Trust) from any and all claims, losses, liabilities, costs and expenses (including attorneys fees) arising out of any actual or alleged act or failure to act made in good faith pursuant to the provisions of the Plan, including expenses reasonably incurred in the defense of any claim relating thereto with respect to the administration of the Plan or the Trust, except that no indemnification or defense shall be provided to any person with respect to any conduct that has been judicially determined, or agreed by the parties, to have constituted willful misconduct on the part of such person, or to have resulted in his or her receipt of personal profit or advantage to which he or she is not entitled. In connection with the indemnification provided by the preceding sentence, expenses incurred in defending a civil or criminal action, suit or proceeding, or incurred in connection with a civil or criminal investigation, may be paid by the Company in advance of the final disposition of such action, suit, proceeding, or investigation, as authorized by the Committee in the specific case, upon receipt of an undertaking by or on behalf of the party to be indemnified to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Company pursuant to this paragraph. | ||
(c) | Severability . Each of the Sections contained in the Plan, and each provision in each Section, shall be enforceable independently of every other Section or provision in the Plan, and the invalidity or unenforceability of any Section or provision shall not invalidate or render unenforceable any other Section or provision contained herein. If any Section or provision in a Section is found invalid or unenforceable, it is the intent of the parties that a court of competent jurisdiction shall reform the Section or provision to produce its nearest enforceable economic equivalent. |
14
(a) | Notwithstanding anything to the contrary contained in the Plan, (1) in the event that the Internal Revenue Service prevails in its claim that benefits under the Plan constitute taxable income to a Participant, his or her spouse or other designated beneficiary, for any taxable year, prior to the taxable year in which such benefits are distributed to him or her, or (2) in the event that legal counsel satisfactory to the Company and the applicable Participant, his or her spouse or other designated beneficiary, renders an opinion that the Internal Revenue Service would likely prevail in such a claim, the Pre-2005 Benefit, to the extent constituting taxable income, shall be immediately distributed to the Participant, his or her spouse or other designated beneficiary. For purposes of this Section, the Internal Revenue Service shall be deemed to have prevailed in a claim if such claim is upheld by a court of final jurisdiction, or, if based upon an opinion of legal counsel satisfactory to the Company and the Participant, his or her spouse or other designated beneficiary, the Plan fails to appeal a decision of the Internal Revenue Service, or a court of applicable jurisdiction, with respect to such claim to an |
15
appropriate Internal Revenue Service appeals authority or to a court of higher jurisdiction within the appropriate time period. | |||
(b) | Notwithstanding anything to the contrary contained in the Plan, (1) in the event that the Internal Revenue Service prevails in its claim that benefits under the Plan constitute taxable income under Code Section 409A, and guidance and regulations thereunder, to a Participant, his or her spouse or other designated beneficiary, for any taxable year prior to the taxable year in which such benefits are distributed to him or her, or (2) in the event that legal counsel satisfactory to the Company and the applicable Participant, his or her spouse or other designated beneficiary, renders an opinion that the Internal Revenue Service would likely prevail in such a claim, the Post-2004 Benefit or Supplemental Spouse Pension, to the extent constituting taxable income, shall be immediately distributed to the Participant, his or her spouse or other designated beneficiary. For purposes of this Section, the Internal Revenue Service shall be deemed to have prevailed in a claim if such claim is upheld by a court of final jurisdiction, or, if based upon an opinion of legal counsel satisfactory to the Company and the Participant, his or her spouse or other designated beneficiary, the Plan fails to appeal a decision of the Internal Revenue Service, or a court of applicable jurisdiction, with respect to such claim to an appropriate Internal Revenue Service appeals authority or to a court of higher jurisdiction within the appropriate time period. |
(a) | Change in Ownership . A Change in Ownership of the Company occurs on the date that any one person, or more than one Person Acting as a Group (as defined below), acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. However, if any one person or more than one Person Acting as a Group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a Change in Ownership of the Company, as applicable (or to cause a Change in Effective Control of the Company). An increase in the percentage of stock owned by any one person, or Persons Acting as a Group, as a result of a transaction in which the Company acquires its stock in exchange for property s be treated as an acquisition of stock. This paragraph (a) applies only |
16
when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction. | |||
(b) | Change in Effective Control . A Change in Effective Control of the Company occurs on the date that either |
(i) | Any one person, or more than one Person Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or |
(ii) | a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election, |
In the absence of an event described in paragraph (i) or (ii), a Change in Effective Control of the Company will not have occurred. | |||
Acquisition of additional control . If any one person, or more than one Person Acting as a Group, is considered to effectively control the Company, the acquisition of additional control of the Company by the same person or persons is not considered to cause a Change in Effective Control of the Company (or to cause a Change in Ownership of the Company). | |||
(c) | Change of Ownership of a Substantial Portion of Assets . A Change of Ownership of a Substantial Portion of Assets occurs on the date that any one person, or more than one Person Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. | ||
Transfers to a related person . There is no Change in Control when there is a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer. A transfer of assets by the Company is not treated as a Change of Ownership of a Substantial Portion of Assets if the assets are transferred to |
(i) | A shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock; |
17
(ii) | An entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company; |
(iii) | A person, or more than one Person Acting as a Group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or |
(iv) | An entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (iii). |
A persons status is determined immediately after the transfer of the assets. For example, a transfer to a corporation in which the Company has no ownership interest before the transaction, but which is a majority-owned subsidiary of the Company after the transaction is not treated as a Change of Ownership of a Substantial Portion of Assets of the Company. | |||
(d) | Persons Acting as a Group . Persons shall not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time or as a result of the same public offering. However, persons shall be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. |
(a) | The delivery to the Company by any person, as defined in Section 13(d)(3) of The Securities Exchange Act of 1934 (the Act), of a statement containing the information required by Schedule 13-D under the Act, or any amendment to any such statement, that shows that such person has acquired, directly or indirectly, the beneficial ownership of (1) more than twenty percent (20%) of any class of equity security of the Company entitled to vote as a class in the election or removal from office of directors, or (2) more than twenty percent (20%) of the voting power of any group of classes of equity securities of the Company entitled to vote as a single class in the election or removal from office of directors. | ||
(b) | The Company becomes aware that preliminary or definitive copies of a proxy statement and information statement or other information have been filed with the Securities and Exchange Commission pursuant to Rule 14a-6, Rule 14c-5 or |
18
Rule 14f-1 under the Act relating to a proposed change in control of the Company. | |||
(c) | The delivery to the Company pursuant to Rule 14d-3 under the Act of a Tender Offer Statement relating to equity securities of the Company. | ||
(d) | The Board adopts a resolution to the effect that for purposes of the Plan a Potential Change in Control has occurred. |
19
(a) | a Change in Control occurs in the calendar year subsequent to the calendar year in which the election is made; and |
(b) | (i) | within 24 months following the Change in Control any one of the payment triggering conditions set forth in the Change in Control and Termination Agreement between the Company and the Participant shall have occurred; or |
(ii) | if no Change in Control and Termination Agreement is in effect between the Company and the Participant on the date of the Change in Control and within 24 months following the Change in Control the employment of the Participant with the Company is terminated by the Company for any reason other than Good Cause or the Participant terminates his or her employment with the Company for Good Reason. |
20
(a) | Good Cause shall be deemed to exist if, and only if: |
(i) | the Participant engages in acts or omissions constituting dishonesty, intentional breach of fiduciary obligation or intentional wrongdoing or malfeasance, in each case that results in substantial harm to the Company; or |
(ii) | the Participant is convicted of a criminal violation involving fraud or dishonesty. |
(b) | Good Reason shall be deemed to exist if, and only if: |
(i) | there is a significant change in the nature or the scope of the Participants authorities or duties; | ||
(ii) | there is a significant reduction in the Participants monthly rate of base salary, his or her opportunity to earn a bonus under an incentive bonus compensation plan maintained by the Company or his or her benefits; or | ||
(iii) | the Company changes by 100 miles or more the principal location in which the Participant is required to perform services. |
(a) | To interpret the Plan and determine all questions arising in the administration, interpretation and application of the Plan, including, but not limited to, the power to determine the rights or eligibility of employees or Participants, and their surviving spouses and any other beneficiaries, and the amount of their respective benefits under the Plan, and to remedy ambiguities, inconsistencies or omissions. | ||
(b) | To adopt such rules of procedure and regulations as in its opinion may be necessary for the proper and efficient administration of the Plan and as are consistent with the Plan. | ||
(c) | To enforce the Plan and the rules and regulations, if any, adopted by the Committee as above. |
21
(d) | To direct the trustee as respects benefit payments or other distributions from the Trust fund pursuant to the provisions of the Plan. |
(e) | To furnish the Company with such information as may be required by it for tax or other purposes as respects the Plan. | ||
(f) | To employ agents, attorneys, accountants, actuaries or other persons (who also may be employed by the Company or an Affiliate) and to allocate or delegate to them such powers, rights and duties as the Committee may consider necessary or advisable to properly carry out the administration of the Plan, including maintaining the accounts of Participants, provided that such allocation or delegation, and the acceptance thereof by such agents, attorneys, accountants, actuaries or other persons, shall be in writing. |
(a) | the specific reason or reasons for denial of the claim; | ||
(b) | a specific reference to the pertinent Plan provisions upon which the denial is based; |
22
(c) | a description of any additional material or information necessary for the claimant to perfect the claim, together with an explanation of why such material or information is necessary; and | ||
(d) | an explanation of the Plans review procedure. |
[signature block follows on next page] |
23
24
Page | ||||
ARTICLE I PURPOSE
|
1 | |||
|
||||
ARTICLE II DEFINITIONS
|
2 | |||
2.1 AB Account
|
2 | |||
2.2 AB Benefit
|
2 | |||
2.3 Affiliated Company
|
2 | |||
2.4 Basic Plans
|
2 | |||
2.5 Code
|
2 | |||
2.6 Committee
|
2 | |||
2.7 Company
|
2 | |||
2.8 DCP
|
2 | |||
2.9 Disability
|
2 | |||
2.10 Effective Date
|
2 | |||
2.11 Employee
|
2 | |||
2.12 Employer
|
3 | |||
2.13 ERISA
|
3 | |||
2.14 Limits
|
3 | |||
2.15 Participant
|
3 | |||
2.16 Plan
|
3 | |||
|
||||
ARTICLE III PARTICIPATION AND BENEFIT ACCRUAL
|
3 | |||
3.1 Eligibility for Participation and Accrual of Benefit
|
3 | |||
3.2 Special Provisions for Participants with Basic Plan Benefits Accrued
Prior to 2004
|
3 | |||
3.3 Service Crediting
|
4 | |||
|
||||
ARTICLE IV DETERMINATION OF BENEFIT AMOUNT
|
4 | |||
4.1 Amount of Benefit General Principle
|
4 | |||
4.2 Amount of Benefit For Participant Who Accrued a Benefit under a Basic
Plan Prior to Participating in the Plan on January 1, 2004
|
5 | |||
4.3 Form of Benefit Accrual
|
6 | |||
4.4 Conversion of Benefits
|
6 | |||
4.5 Opening Balance
|
6 | |||
4.6 Pay-Based Credits and Interest Credits
|
7 | |||
4.7 Protected Benefit
|
7 | |||
|
||||
ARTICLE V TIME AND METHOD OF PAYMENT OF BENEFIT
|
8 | |||
5.1 Method of Payment
|
8 | |||
5.2 Timing of Payment
|
9 |
i
Page | ||||
5.3 Changes to the Form of Payment
|
9 | |||
5.4 Specified Employees
|
9 | |||
5.5 Interest and Mortality Assumptions
|
10 | |||
|
||||
ARTICLE VI ADMINISTRATION OF PLAN
|
10 | |||
|
||||
ARTICLE VII COMPANYS RIGHT TO AMEND OR TERMINATE PLAN
|
10 | |||
|
||||
ARTICLE VIII MISCELLANEOUS PROVISIONS
|
11 | |||
8.1 Unsecured General Creditor
|
11 | |||
8.2 Income Tax Payout
|
11 | |||
8.3 General Conditions
|
11 | |||
8.4 No Guaranty of Benefits
|
11 | |||
8.5 No Enlargement of Employee Rights
|
11 | |||
8.6 Spendthrift Provision
|
12 | |||
8.7 Applicable Law
|
12 | |||
8.8 Incapacity of Recipient
|
12 | |||
8.9 Unclaimed Benefit
|
12 | |||
8.10 Limitations on Liability
|
12 | |||
8.11 Claims Procedure
|
13 | |||
|
||||
SCHEDULE A
|
15 |
ii
1
2
(a) | Eligibility . As set forth in Article I, prior to January 1, 2004, only Employees of Columbia Energy Group (or its predecessor) who had benefits under a Basic Plan affected by the Limits, or by his or her deferrals under the DCP, participated in the Plan. Pursuant to the extension of participation in the Plan as explained in Article I, on or after January 1, 2004, each Employee meeting the participation requirements set forth in Section 3.1 shall participate in the Plan as of January 1, 2004, and shall be eligible to accrue a benefit under the Plan as of such date or, if |
3
later, as of the date that an Employees benefits under a Basic Plan are affected by the Limits or by his or her deferrals under the DCP. | |||
(b) | Benefit Accrual . With respect to any Participant who was first eligible to participate in the Plan on January 1, 2004 in accordance with this Section, but who had accrued benefits under a Basic Plan prior to such date, such Participant shall have benefits under the Plan calculated in accordance with the Plans general provisions, except that the Plan shall only consider the Participants Credited Service, Point Service, Compensation or Accrued Benefit under the Basic Plan earned on or after the date participation in the Plan begins ( i.e. , January 1, 2004), as further described in Section 4.2, Section 4.4(b), Section 4.5(b) Section 4.6(b) and Section 4.7(b). |
(a) | The benefit that would have been payable under a Basic Plan to a Participant, or to his or her Beneficiary, determined under a Basic Plan without regard to (i) the Limits or (ii) the Participants deferrals into the DCP, if any. | ||
(b) | The benefit actually payable to the Participant, or to his or her Beneficiary, determined under a Basic Plan after applying the Limits and considering deferrals into the DCP, if any. |
4
(a) | FAP Participant . For a Participant whose Accrued Benefit under a Basic Plan is a FAP Benefit, the benefit payable under the Plan to the Participant, or to his or her Beneficiary under the Basic Plan, shall be equal to the excess (if any) of the benefit determined under paragraph (1) below over the benefit determined under paragraph (2) below: |
(1) | The benefit that would have been payable under a Basic Plan to a Participant, or to his or her Beneficiary determined under a Basic Plan, considering only the Participants Credited Service and Compensation from and after the date the Participant first becomes eligible to participate in the Plan, determined without regard to (i) the Limits or (ii) the Participants deferrals into the DCP, if any. | ||
(2) | The benefit actually payable to the Participant, or to his or her Beneficiary determined under a Basic Plan, calculated based upon the Participants Credited Service and Compensation from and after the date the Participant first becomes eligible to participate in the Plan, determined after applying the Limits and considering deferrals into the DCP, if any. |
(b) | AB Participant . For a Participant whose Accrued Benefit under a Basic Plan is an AB Benefit, the benefit payable under the Plan to the Participant, or to his or her Beneficiary under a Basic Plan, shall be equal to the excess (if any) of the benefit determined under paragraph (1) below over the benefit determined under paragraph (2) below: |
(1) | The benefit that would have been payable under a Basic Plan to a Participant or his or her Beneficiary, determined as if the Participants Opening Balance under the Basic Plan was $0 as of the date the Participant first becomes eligible to participate in the Plan, and considering only the Participants Pay-Based Credits, Interest Credits and Compensation from and after such date, and determined without regard to (i) the Limits or (ii) the Participants deferrals into the DCP, if any. | ||
(2) | The benefit actually payable under a Basic Plan to the Participant, or to his or her Beneficiary, determined as if the Participants Opening Balance under the Basic Plan was $0 as of the date the Participant first becomes |
5
eligible to participate in the Plan, and considering only the Participants Pay-Based Credits, Interest Credits and Compensation from and after such date, and determined after applying the Limits and considering deferrals into the DCP, if any. |
(a) | In General . Upon the conversion of any Participants Accrued Benefit in a Basic Plan from a FAP Benefit to an AB II Benefit or from an AB I Benefit to an AB II Benefit, any benefit under the Plan shall, except as provided below, also be converted upon such date according to the conversion procedures set forth in the relevant Basic Plan, including determination of an Opening Balance. | ||
(b) | Exception to the General Provision . Notwithstanding the foregoing, with respect to any Participant in the Plan who is described in Section 3.2, such Participants benefit under the Plan shall be converted according to the conversion procedures in the relevant Basic Plan, provided that any consideration of Credited Service and Compensation in the calculation of the Participants Opening Balance shall be limited to Credited Service and Compensation earned from and after the date the Participant first becomes eligible to participate in the Plan. |
(a) | In General . The Opening Balance shall be calculated using the same methodology and factors as provided in the relevant Basic Plan. The Opening Balance under the Plan shall be determined as the excess of the Opening Balance determined in (1) below over the Opening Balance determined in (2) below: |
(1) | The Participants Opening Balance under the Basic Plan determined without regard to (i) the Limits or (ii) the Participants deferrals into the DCP, if any. | ||
(2) | The Participants Opening Balance under the Basic Plan determined after applying the Limits and considering deferrals into the DCP, if any. |
(b) | Exception to the General Provision . For the purpose of determining the Opening Balance for any Participant in the Plan who is described in Section 3.2, the Opening Balance under the Plan shall be determined in accordance with Section 4.5(a) above, but considering a calculation of the Opening Balance under the Basic Plan using only the Participants Credited Service (or, if applicable, Point |
6
Service) and Compensation from and after the date the Participant first becomes eligible to participate in the Plan. |
(a) | Pay-Based Credits Generally . Pay-Based Credits under the Plan shall be calculated using the same methodology and factors as provided in the relevant Basic Plan. Pay-Based Credits under the Plan shall be determined as the excess of the Pay-Based Credits determined in (1) below over the Pay-Based Credits determined in (2) below: |
(1) | The Participants Pay-Based Credits under the Basic Plan determined without regard to (i) the Limits or (ii) the Participants deferrals into the DCP, if any. | ||
(2) | The Participants Pay-Based Credits under the Basic Plan determined after applying the Limits and considering deferrals into the DCP, if any. |
(b) | Exception to the General Pay-Based Credits Provision . For the purpose of determining the Pay-Based Credits for any Participant in the Plan who is described in Section 3.2, the Pay-Based Credits under the Plan shall be determined in accordance with Section 4.6(a) above, but considering a calculation of Pay-Based Credits under the Basic Plan using only Compensation from and after the date the Participant first becomes eligible to participate in the Plan. | ||
(c) | Interest Credits . Interest Credits under the Plan shall be calculated using the same methodology and factors as provided in the relevant Basic Plan. |
(a) | Protected Benefit Generally . The Protected Benefit under the Plan shall be calculated using the same methodology and factors as provided in the relevant Basic Plan. The Protected Benefit under the Plan shall be determined as the excess of the benefit determined in (1) below over the benefit determined in (2) below: |
(1) | The Protected Benefit under the Basic Plan for the Participant, or for his or her Beneficiary, determined without regard to (i) the Limits or (ii) the Participants deferrals into the DCP, if any. |
7
(2) | The Protected Benefit under the Basic Plan for the Participant, or for his or her Beneficiary, determined after applying the Limits and considering deferrals into the DCP, if any. |
In accordance with the methodology provided in the applicable Basic Plan, a Participant with an AB Benefit shall be entitled to benefit under the Plan equal to the greater of (1) the AB Account under the Plan or (2) the sum of the AB Account under the Plan (determined without regard to the Opening Balance calculation) plus the portion of the FAP Benefit that is calculated in accordance with the Plan as of the date of conversion to the AB Benefit as set forth in Section 4.4. | |||
(b) | Exception to the General Protected Benefit Provision . For the purpose of determining the Protected Benefit for any Participant in the Plan who is described in Section 3.2, the Protected Benefit under the Plan shall be determined in accordance with Section 4.7(a) above, but considering calculation of the Protected Benefit under the Basic Plan using only Credited Service and Compensation from and after the date the Participant first becomes eligible to participate in the Plan. |
(a) | The benefit earned under the Plan shall be payable to a Participant in a form available under the Basic Plan, as elected by the Participant by notice delivered to the Committee on or before December 31, 2005. Notwithstanding the preceding sentence, in the case of an Employee who becomes a Participant on or after January 1, 2005, the aforementioned election with respect to a benefit shall be made no later than January 31 of the calendar year after the calendar year in which the Participant first becomes eligible to participate in the Plan, and such election shall be effective with respect to Compensation related to services to be performed subsequent to the election; provided, however, that a Participant shall not be considered first eligible if, on the date he or she becomes a Participant, he or she participates in any other nonqualified plan of the same category that is subject to Code Section 409A, maintained by the Company or an Affiliated Company. | ||
(b) | If payment in the form of an annuity is elected, the annuity type shall be elected by the Participant at the time he or she makes the election described in the first or second sentence of subsection (a) above from among those annuities available at that time under the Basic Plan. If a benefit hereunder is paid in an annuity form other than a straight life annuity, the amount of the benefit under the Plan shall be |
8
reduced by the Basic Plans factors in effect at the time of such election for payment in a form other than a straight life annuity. If payment in the form of a lump sum is elected, the lump sum amount payable will be calculated in the same manner and according to the same interest rates and mortality tables as under the Basic Plan at the time of such election. | |||
(c) | If the Participant fails to elect a form of payment as required under subsections (a) and (b) above, the Participants benefit shall be payable in a lump sum. |
9
10
11
12
(a) | the specific reason or reasons for denial of the claim; | ||
(b) | a specific reference to the pertinent Plan provisions upon which the denial is based; | ||
(c) | a description of any additional material or information necessary for the claimant to perfect the claim, together with an explanation of why such material or information is necessary; and | ||
(d) | an explanation of the Plans review procedure. |
13
NISOURCE INC.
|
||||
Date: 12/16/2010 | By: | /s/ Robert Campbell |
14
15
Page | ||||
ARTICLE I PURPOSE
|
1 | |||
|
||||
ARTICLE II DEFINITIONS
|
2 | |||
|
||||
2.1 Affiliated Company
|
2 | |||
2.2 Annual Addition
|
2 | |||
2.3 Basic Plan
|
2 | |||
2.4 Code
|
2 | |||
2.5 Committee
|
2 | |||
2.6 Company
|
2 | |||
2.7 DCP
|
2 | |||
2.8 Disability
|
2 | |||
2.9 Employee
|
2 | |||
2.10 Employer
|
3 | |||
2.11 ERISA
|
3 | |||
2.12 Interest
|
3 | |||
2.13 Limits
|
3 | |||
2.14 Participant
|
3 | |||
2.15 Plan
|
3 | |||
2.16 Plan Year
|
3 | |||
2.17 Post-2004 Benefit
|
3 | |||
2.18 Pre-2005 Benefit
|
3 | |||
2.19 Supplemental Savings Account
|
3 | |||
2.20 Unforeseeable Emergency
|
3 | |||
|
||||
ARTICLE III ELIGIBILITY
|
4 | |||
|
||||
3.1 Eligibility
|
4 | |||
3.2 Notice of Eligibility to Participants
|
4 | |||
3.3 Method of Becoming a Participant
|
4 | |||
3.4 Continuation of Participation
|
4 | |||
|
||||
ARTICLE IV SUPPLEMENTAL SAVINGS ACCOUNT
|
4 | |||
|
||||
4.1 Supplemental Savings Account
|
5 | |||
4.2 Employer Credits
|
5 | |||
4.3 Special Employer Credits
|
6 | |||
4.4 Participant Credits
|
6 | |||
4.5 Interest Credits
|
6 | |||
|
||||
ARTICLE V IN-SERVICE WITHDRAWALS
|
7 |
i
Page | ||||
5.1 Pre-2005 Benefit
|
7 | |||
5.2 Post-2004 Benefit
|
7 | |||
5.3 Limitations on In-Service Withdrawals
|
7 | |||
|
||||
ARTICLE VI TERMINATION OF PARTICIPATION AND PAYMENT OF BENEFITS
|
8 | |||
|
||||
6.1 Termination of Participation
|
8 | |||
6.2 Benefits at Termination of Participation
|
8 | |||
6.3 Method and Time of Payment
|
8 | |||
|
||||
ARTICLE VII ADMINISTRATION OF PLAN
|
11 | |||
|
||||
ARTICLE VIII COMPANYS RIGHTS TO AMEND OR TERMINATE PLAN
|
11 | |||
|
||||
ARTICLE IX MISCELLANEOUS PROVISIONS
|
11 | |||
9.1 Definitions
|
11 | |||
9.2 Unsecured General Creditor
|
11 | |||
9.3 Income Tax Payout
|
12 | |||
9.4 General Conditions
|
12 | |||
9.5 No Guaranty of Benefits
|
13 | |||
9.6 No Enlargement of Employee Rights
|
13 | |||
9.7 Spendthrift Provision
|
13 | |||
9.8 Applicable Law
|
13 | |||
9.9 Incapacity of Recipient
|
13 | |||
9.10 Unclaimed Benefit
|
13 | |||
9.11 Limitations on Liability
|
14 | |||
9.12 Claims Procedure
|
14 |
ii
(a) | the Companys, or any Affiliated Companys, matching or profit sharing contributions to the Basic Plan on behalf of the Participant; plus | ||
(b) | all Participant deposits to the Basic Plan, including before-tax and after-tax deposits. |
2
3
4
(a) | Employer credits, as described in Sections 4.2 and 4.3; plus | ||
(b) | Participant credits, as described in Section 4.4; plus | ||
(c) | Interest credits under Section 4.5. |
(a) | Credits Related to Matching Contributions . The amount of Employer credits for a Participant shall equal (1) minus (2) below: |
(1) | The total amount of Matching Contributions that would otherwise have been contributed to the Basic Plan for the Participant without regard to the Limits or deferrals into the DCP; | ||
(2) | The actual amount of Matching Contributions contributed to the Basic Plan for the Participant. |
(b) | Credits Related to Certain Employer Contributions for Exempt Employees Hired or Rehired on or After January 1, 2010 . Effective as of January 1, 2010, and only with respect to a Participant who is classified by the Employer as an exempt employee and who is hired or rehired on or after January 1, 2010, the amount of Employer credits for a Participant shall equal (1) minus (1) below: |
(1) | The total amount of the Employer Contribution under the Basic Plan that otherwise would have been contributed in an amount equal to 3% of the Participants Compensation without regard to the Limits; | ||
(2) | The actual amount of the Employer Contribution under the Basic Plan that was contributed to the Participant in an amount equal to 3% of the Participants Compensation. |
This amount shall be payable to any applicable Participant in addition to any amounts he or she may be entitled to under Section 4.2(a) of this Plan and regardless of whether such Participant has signed a written agreement to participate in this Plan. |
5
(a) | The total amount of Pre-tax Contributions and Roth Contributions that would otherwise have been contributed to the Basic Plan for the Participant without regard to the Limits or deferrals into the DCP; | ||
(b) | The actual amount of Pre-tax Contributions and Roth Contributions contributed to the Basic Plan for the Participant. |
(a) | Interest credits to a Participants Supplemental Savings Account, if applicable, shall be considered made on a monthly basis. | ||
(b) | All credits shall accrue Interest starting with the first full calendar month in which they are deemed to be a part of the applicable Supplemental Savings Account and ending with the last full calendar month in which credits are still deemed to be part of the Supplemental Savings Account. |
6
(c) | Interest shall be based on the balance of the value of the Participants Supplemental Savings Account as of the first working day of the calendar month and credited as of the last working day of the calendar month. | ||
(d) | In the event there is a withdrawal by a Participant from his or her Supplemental Savings Account, the value of such Supplemental Savings Account, prior to the withdrawal, shall be credited with Interest to the end of the calendar month in which the withdrawal is actually made. The amount of the withdrawal shall then be subtracted from the balance so determined. | ||
(e) | Interest shall be earned only on monies held under reserve by an Employer. If the Committee has invested any portion of a Participants Supplemental Savings Account, Interest shall not be earned on such portion, but such Account shall be adjusted for actual earnings, gains, and losses on such investment. |
(a) | In-Service Withdrawals . Subject to the limitations of Section 5.3, a Participant, by filing a written request with the Committee, may, while employed by an Employer or an Affiliated Company, elect to withdraw 33%, 67% or 100% of his or her Pre-2005 Benefit. | ||
(b) | Limitation on In-Service Withdrawals . Any In-Service withdrawal under paragraph (a) of this Section 5.1 shall be subject to a 10% early distribution penalty. | ||
(c) | Unforeseeable Emergency . At the written request of a Participant, and in the written discretion of the Committee, up to 100% of the balance of a Participants Pre-2005 Benefit, determined as of the last day of the calendar month prior to the date of distribution may be distributed to a Participant in a lump sum in the case of an Unforeseeable Emergency. |
(a) | Only one In-Service Withdrawal shall be permitted in any 12-month period. |
7
(b) | In-Service Withdrawals under this Article V shall require suspension of Employer credits and Participant credits (but not Interest credits) under the Plan for a period of time varying with the percentage of the value of the Participants Supplemental Savings Account which is withdrawn, according to the following schedule: |
Percentage | Suspension | |
Up to 33%
|
2 months | |
34 - 67%
|
4 months | |
68 - 100%
|
6 months |
(a) | Pre-2005 Benefit . |
8
(b) | Post-2004 Benefit . |
9
(c) | Mandatory Lump Sum Payments . | ||
Notwithstanding any other provision in this Section 6.3, if (1) the sum of the Participants Pre-2005 Benefit and Post-2004 Benefit does not exceed the applicable dollar limit under code Section 402(g)(1)(B) and (2) this sum is the |
10
entirety of the Participants interest in the Plan and all other arrangements with respect to which deferrals of compensation are treated as having been deferred under a single nonqualified deferred compensation plan under Code Section 409A and applicable guidance thereunder, then the form of payment of both the Pre-2005 Benefit and Post-2004 Benefit shall be a single lump sum. |
11
(a) | Notwithstanding anything to the contrary contained herein, (1) in the event that the Internal Revenue Service prevails in its claim that any amount of a Pre-2005 Benefit, payable pursuant to the Plan and held in the general assets of the Company or any other Employer, constitutes taxable income to a Participant or his or her Beneficiary for a taxable year prior to the taxable year in which such amount is distributed to him or her, or (2) in the event that legal counsel satisfactory to the Company, and the applicable Participant or his or her Beneficiary, renders an opinion that the Internal Revenue Service would likely prevail in such a claim, the amount of such Benefit held in the general assets of the Company or any other Employer, to the extent constituting taxable income, shall be immediately distributed to the Participant or his or her Beneficiary. For purposes of this Section, the Internal Revenue Service shall be deemed to have prevailed in a claim if such claim is upheld by a court of final jurisdiction, or if the Participant or Beneficiary, based upon an opinion of legal counsel satisfactory to the Company and the Participant or his or her Beneficiary, fails to appeal a decision of the Internal Revenue Service, or a court of applicable jurisdiction, with respect to such claim, to an appropriate Internal Revenue Service appeals authority or to a court of higher jurisdiction within the appropriate time period. | ||
(b) | Notwithstanding anything to the contrary contained herein, (1) in the event that the Internal Revenue Service prevails in its claim that any amount of a Post-2004 Benefit, payable pursuant to the Plan and held in the general assets of the Company or any other Employer, constitutes taxable income under Code Section 409A, and guidance and regulations thereunder, to a Participant or his or her Beneficiary for a taxable year prior to the taxable year in which such amount is distributed to him or her, or (2) in the event that legal counsel satisfactory to the Company, and the applicable Participant or his or her Beneficiary, renders an opinion that the Internal Revenue Service would likely prevail in such a claim, the amount of such Benefit held in the general assets of the Company or any other Employer, to the extent constituting such taxable income, shall be immediately distributed to the Participant or his or her Beneficiary. For purposes of this Section, the Internal Revenue Service shall be deemed to have prevailed in a claim if such claim is upheld by a court of final jurisdiction, or if the Participant or Beneficiary, based upon an opinion of legal counsel satisfactory to the Company and the Participant or his or her Beneficiary, fails to appeal a decision of the Internal Revenue Service, or a court of applicable jurisdiction, with respect to such claim, to an appropriate Internal Revenue Service appeals authority or to a court of higher jurisdiction within the appropriate time period. |
12
13
(a) | the specific reason or reasons for denial of the claim; | ||
(b) | a specific reference to the pertinent Plan provisions upon which the denial is based; | ||
(c) | a description of any additional material or information necessary for the claimant to perfect the claim, together with an explanation of why such material or information is necessary; and | ||
(d) | an explanation of the Plans review procedure. |
14
NISOURCE INC.
|
||||
By: | /s/ Robert Campbell | |||
Date: 12/16/2010 |
15
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Earnings as defined in item
503(d) of Regulation S-K: |
||||||||||||||||||||
Add:
|
||||||||||||||||||||
Pretax income from continuing
|
||||||||||||||||||||
Operations (b)
|
$ | 421,269,857 | $ | 381,711,851 | $ | 547,756,665 | $ | 453,435,772 | $ | 526,823,271 | ||||||||||
Fixed Charges
|
442,730,583 | 423,724,907 | 422,708,986 | 436,701,099 | 419,858,840 | |||||||||||||||
Amortization of capitalized interest (c)
|
- | - | - | - | - | |||||||||||||||
Distributed income of equity investees
|
36,741,190 | 2,924,805 | 7,941,413 | 44,134,385 | 21,974,949 | |||||||||||||||
Share of pre-tax losses of equity
investees for which charges arising
guarantees are included in fixed charges
|
- | - | - | - | - | |||||||||||||||
Deduct:
|
||||||||||||||||||||
Interest capitalized (c)
|
- | - | - | - | - | |||||||||||||||
Preference security dividend requirements
of consolidated subsidiaries (d)
|
- | - | - | - | 1,670,297 | |||||||||||||||
Minority interest in pre-tax income
of subsidiaries that have not incurred
fixed charges
|
(11,762 | ) | (46,769 | ) | (5,307 | ) | (2,708 | ) | (5,443 | ) | ||||||||||
|
||||||||||||||||||||
|
$ | 900,753,392 | $ | 808,408,332 | $ | 978,412,370 | $ | 934,273,964 | $ | 966,992,206 | ||||||||||
Fixed charges as defined in
item 503(d) of Regulation S-K:
|
||||||||||||||||||||
Interest on long-term debt
|
$ | 390,690,947 | $ | 386,737,382 | $ | 358,736,132 | $ | 353,404,387 | $ | 346,666,685 | ||||||||||
Other interest
|
22,851,904 | 5,268,937 | 37,561,475 | 58,214,067 | 45,638,785 | |||||||||||||||
Capitalized interest during period (c)
|
||||||||||||||||||||
Amortization of premium,
reacquisition premium,
discount and expense
on debt, net
|
10,287,487 | 13,020,255 | 7,682,146 | 7,284,066 | 7,654,771 | |||||||||||||||
Interest portion of rent
expense
|
18,912,006 | 18,745,102 | 18,734,540 | 17,801,287 | 18,233,745 | |||||||||||||||
Minority Interest
|
(11,762 | ) | (46,769 | ) | (5,307 | ) | (2,708 | ) | (5,443 | ) | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
|
$ | 442,730,583 | $ | 423,724,907 | $ | 422,708,986 | $ | 436,701,099 | $ | 418,188,543 | ||||||||||
|
||||||||||||||||||||
Plus preferred stock dividends:
|
||||||||||||||||||||
Preferred dividend
requirements of subsidiary
|
$ | - | $ | - | $ | - | $ | - | $ | 1,076,298 | ||||||||||
Preferred dividend
requirements factor
|
0.68 | 0.58 | 0.67 | 0.65 | 0.64 | |||||||||||||||
|
||||||||||||||||||||
Preference security dividend requirements
of consolidated subsidiaries (d)
|
- | - | - | - | 1,670,297 | |||||||||||||||
|
||||||||||||||||||||
Fixed charges
|
442,730,583 | 423,724,907 | 422,708,986 | 436,701,099 | 418,188,543 | |||||||||||||||
|
||||||||||||||||||||
|
$ | 442,730,583 | $ | 423,724,907 | $ | 422,708,986 | $ | 436,701,099 | $ | 419,858,840 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Ratio of earnings to fixed charges
|
2.03 | 1.91 | 2.31 | 2.14 | 2.30 |
(a) | Income Statement amounts have been adjusted for discontinued operations. | |
(b) | Excludes adjustment for minority interest in consolidated subsidiaries or income or loss from equity investees. | |
(c) | NiSource is a public utility following SFAS 71 and therefore does not add amortization of capitalized interest or subtract interest capitalized in determining earnings, nor reduces fixed charges for Allowance for Funds Used During Construction. | |
(d) | Preferred dividends, as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one minus the effective income tax rate applicable to continuing operations. |
Segment/Subsidiary | State of Incorporation | |
GAS DISTRIBUTION OPERATIONS
|
||
Bay State Gas Company
|
Massachusetts | |
Columbia Gas of Kentucky, Inc.
|
Kentucky | |
Columbia Gas of Maryland, Inc.
|
Delaware | |
Columbia Gas of Ohio, Inc.
|
Ohio | |
Columbia Gas of Pennsylvania, Inc.
|
Pennsylvania | |
Columbia Gas of Virginia, Inc.
|
Virginia | |
Kokomo Gas and Fuel Company
|
Indiana | |
Northern Indiana Fuel and Light Company, Inc.
|
Indiana | |
Northern Indiana Public Service Company*
|
Indiana | |
NiSource Retail Services, Inc.
|
Delaware | |
|
||
ELECTRIC OPERATIONS
|
||
Northern Indiana Public Service Company*
|
Indiana | |
|
||
GAS TRANSMISSION AND STORAGE OPERATIONS
|
||
Columbia Gas Transmission, LLC.
|
Delaware | |
Columbia Gulf Transmission Company
|
Delaware | |
Crossroads Pipeline Company
|
Indiana | |
Central Kentucky Transmission Company
|
Delaware |
Segment/Subsidiary | State of Incorporation | |
NiSource Gas Transmission & Storage Company
|
Delaware | |
|
||
OTHER OPERATIONS
|
||
NiSource Energy Technologies, Inc.
|
Indiana | |
NiSource Development Company, Inc.
|
Indiana | |
EnergyUSA, Inc.
|
Indiana | |
EnergyUSA-TPC Corp.
|
Indiana | |
|
||
CORPORATE
|
||
Columbia Energy Group
|
Delaware | |
NiSource Finance Corp.
|
Indiana | |
NiSource Capital Markets, Inc.
|
Indiana | |
NiSource Corporate Services Company
|
Delaware | |
NiSource Insurance Corporation, Inc.
|
Utah | |
NIPSCO Accounts Receivable Corporation
|
Indiana | |
Columbia Gas of Ohio Receivables Corporation
|
Delaware | |
Columbia Gas of Pennsylvania Receivables Corporation
|
Delaware |
* | Reported under Gas Distribution Operations and Electric Operations. |
2
1. | I have reviewed this Annual Report of NiSource Inc. on Form 10-K for the year ended December 31, 2010; | ||
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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: February 28, 2011 | By: | /s/ Robert C. Skaggs, Jr | ||
Robert C. Skaggs, Jr. | ||||
Chief Executive Officer | ||||
1. | I have reviewed this Annual Report of NiSource Inc. on Form 10-K for the year ended December 31, 2010; | ||
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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: February 28, 2011 | By: | /s/ Stephen P. Smith | ||
Stephen P. Smith | ||||
Executive Vice President and Chief Financial Officer | ||||
(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
|
||
Chief Executive Officer
|
(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
|
||
Executive Vice President and Chief Financial Officer
|