NiSource Inc (NI) 2003 Q1 法說會逐字稿

Good morning. My name is Sylvia. I will be your conference facilitator today. At this time, I would like to welcome everyone to the NiSource first quarter financial results and business update conference. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press "*1"on your telephone keypad. If you would like to withdraw your question, press "*2" on your telephone keypad. As a reminder, today's call is being recorded.

This call will be available for replay beginning at 12:00 p.m. eastern standard time today through 11:59 p.m. Eastern Standard Time on May 6th, 2003. The conference I.D. for the replay is 972-1594. The number to dial for the replay is 1-800-642-1687, or 706-645-9291.

Thank you. Mr. Senchak, you may begin your conference.

Thank you very much, and good morning to everyone. We really appreciate the opportunity to be with you today and thanks for taking the time to join us. On the call today is Gary Neale, the chairman, president and CEO of NiSource, and Mike O'Donnell, our executive vice president and chief financial officer.

The focus of today's call is to review our first quarter 2003 performance. The format will include comments from Gary Neale and a more thorough review of the operating results by Mike O'Donnell. Following their presentations, we will take your questions.

Please note that some of the statements made on today's call will be forward-looking statements within the meaning of the safe harbor provisions of the U.S. federal securities laws. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. For a discussion of some of those risks and uncertainties, please see our 2002 form 10-K.

Now it is my pleasure to turn this call over to Gary Neale.

Thanks, Dennis. Let me add my welcome to everyone this morning, and thank you for being on this call as we talk about our results for the first quarter of 2003.

First I need to state we'll be operating under a slight restriction this morning in that we will not be talking about our Exploration and Production business on this call. We can answer no questions. The reason is we are currently operating under a signed confidentiality agreement with a potential buyer. As always, at the appropriate time, we will discuss this information with you, and its effect on the company if a transaction actually occurs.

Having said that, let's turn to the first quarter. On our last conference call in January, we discussed in detail our commitment to strengthen our company. We informed you of our intent to focus on our core regulated asset business and as a result, we have reduced our overall risk profile. 98% of our operating income is now generated from our regulated businesses.

Today, we will review in greater detail our operating company's first quarter results, and we'll be pleased to answer any of your questions.

I believe our results will demonstrate that NiSource is a company that is successfully operating within the energy industry's new business environment.

First let's turn briefly to our first quarter 2003 results. I'm pleased to report that the income from continuing operations increased by 9.1% in this first quarter over the same period last year. Income from continuing operations was266.1 million, or $1.05 per share, compared to2.43 -- excuse me -- compared to 243 million, or$1.19 per share in the first quarter of 2002. Net income for the first quarter of 2003 was254.9 million, or $1 per share, versus 242 million or 1.18 per share for comparable 2002 period.

Let me remind you that our per-share results are diluted due to the issuance of 54.5 million shares of common stock. 41.4 million new shares resulted from our successful equity offering last November, and 13.1 million shares were issued to complete the conversion of NiSource premium income equity securities or NPIES (ph) in the first quarter of this year.

As we turn to our results, you will note colder than normal weather resulted in higher operating income of 59.7 million, or 15 cents per share after tax net of related costs compared to the first quarter of 2002. So it was a good weather quarter. Our action taken last year to streamline operations largely offset major increases in pension and insurance costs and revenue credits in our electric business.

Taking into consideration cost trackers that are directly offset in revenue as well as reserve changes which together increased our 2003 O&M expenses by 22.3 million and decreased our 2002 O&M expenses by 18 million, on a quarter over quarter bases, our baseline O&M expenses are essentially flat, which is what our objectives were for the period.

Furthermore, you will note the significant improvement in our balance sheet since December of 2000, we have reduced our overall debt by approximately $2 billion. That was a commitment we made, and we've exceeded that commitment. Mike O'Donnell will review our quarterly results in greater detail in just a few minutes.

I would like to note with pride, though, that we reached a milestone on February 20th when our short term debt his zero for the first time since our acquisition of the Columbia Energy Group in November of 2000.

In fact, because of our enhanced liquidity position, we chose not to renew our company's $500 million 364-day credit facility. Very strong position, liquidity position. It's important to note we have a colder than normal winter quarter for the first time in six years, which as we stated possibly impacted our first quarter results.

We sold over 360 million -- excuse me -- billion cubic feet of natural gas to more than 302 million customers in the quarter. We also delivered gas to an additional 232,000 new customers compared to the same period last year. Due to the long stretch of cold weather, we had 123 days of sustained withdrawal from our gas storage facilities and set four separate records for withdrawal. Even with the sustained period of cold weather, we continued to meet our customers' energy needs.

Now I'd like to turn it over to Mike O'Donnell, who will provide you with a more detailed review of our operating company's first quarter results.

Thanks, Gary. As we announced earlier today, NiSource's income from continuing operations in he first quarter of 2003 was $266.1 million, or$1.05 per share, an increase of 22.3 million over the first quarter of 2002. When the earnings were$243.8 million or $1.19 per share. Reflecting the results from discontinued operations and the accounting change mandated by FAS 143 for asset retirement obligations, net income for the first quarter of 2003 was $254.9 million, an increase of$12.7 million over the same period last year. That was $1 per share compared to $1.18 per share in the same quarter last year.

The per-share results were diluted by 23 cents as a result of the issuance of 54.5 million shares of common-stock as a result of the company's equity offering of 41.4 million shares in the fourth quarter of 2002, and the settlement of the forward equity component of NiSource's PIES by the issuance of 13.1 million shares in the first quarter of 2003.

These equity transactions increased common equity by approximately $1.1 billion. Weather in the first quarter of 2003 was 9% colder than normal, and 27% colder than in the first quarter of 2002. This positively impacted operating income by$59.7 million, or 15 cents per share.

This includes an offset of $31 million due to the lower interruptible gas transmission service revenues and reduced incremental revenue opportunities during a period of sustained cold weather in the Northeast market areas. It also includes increase on uncollectible expense from the effects of weather-driven gas costs in the residential customer base.

The improvement in operating results in the first quarter of 2003 was also caused by a gain on the sale of NiSource's interest in a natural gas Exploration and Production joint venture in New York state.

These favorable factors were partially offset by lower average prices for the E & P operations due to higher deliveries of natural gas under forward sales agreements, the effects of cost trackers that are directly offset in revenues, and reserve changes that unfavorably impacted 2003 O&M. Alsoby -- the customers as a result of the Indiana rate settlement. For purposes of comparison, first quarter 2002 results were positively impacted by gains on the sale of assets, mainly NiSource's utility line locate locating business and the reversal of reserves affecting O&M.

Going over some income statement line items, operating and maintenance expense for the first quarter of 2003 were $41.1 million higher than they were in the first quarter of 2002. Taken into consideration cost trackers directly offset in revenues as well as reserve changes that together increased 2003 O&M by $22.3 million and decreased 2002 O&M $18.8 million quarter over quarter, baseline O&M was essentially flat.

The effects of streamlining efforts in 2002 and 2001 offset increased pension and insurance expenses. The $2 million decrease in interest expense reflects continuing efforts to strengthen the balance sheet. Bringing the primary energy leases on the balance sheet and the effects of a co-generation project placed in service in mid 2002 increased interest expense by about $9.8 million. Thus if it were not for the effect of this, the reduction in interest expense during the first quarter of 2003 would have been significantly higher.

Income taxes were $157 million in the first quarter of 2003 versus 144.9 million in the first quarter of 2002.

This $12 million increase was caused by the increased amount of pre-tax income. The effective tax rate -- effective tax rate was about 37% in both periods.

During the first quarter of 2003, NiSource had an average number of common shares outstanding of253.8 million versus 205.5 million in the first quarter of 2002.

As mentioned, the increase was caused by the equity offering in November of last year and the settlement of the forward equity component of PIES in February of this year. Discussing operating results by segment, I'll start with total operating income was $550.4 million, an increase of 29.2 million or9% over the same period last year.

Distribution operating income in the first quarter of 2003 was $314.2 million compared to $249.6 million in the first quarter of 2002, an increase of$64.6 million. Overall, the gas distribution segment sales and transportation volumes increased by 33.8 million decatherms (ph) compared with the first quarter of 2002.

The improvement in gas distribution results was caused by colder weather during the first quarter of 2003, partially offset by increased uncollectible expense from the effects of weather-driven higher gas costs. The 2002 period was favorably impacted by insurance recoveries of environmental expenses and reversal of reserves.

Transmission and storage operations had operating income of$111.3 million compared to $126.8 million during the first quarter last year, reflecting lower interruptible transmission service revenues and lower incremental revenue opportunities during the period of sustained cold weather in the Northeast market areas.

Transmission throughput increased by 46.7 million decatherms compared with the first quarter of 2002. Electric Operations had operating income of $52.6 million compared to$71.8 million in the first quarter of 2002,reflecting lower revenues due to credits issued pursuant to the Indiana electric rate settlement. Overall, electric sales increased by 136.6 giga watt (ph) hours, compared with the first quarter of2002.

The Exploration and Production segment had operating income of $71.2 million, compared to$32.7 million in the first quarter of 2002. The increase resulted mainly from a gain on the sale in NiSource's interest in a joint venture in New York state. Absent this gain, operating income decreased $32.3 million, primarily as a result of lower average prices related to deliveries of natural gas under forward sales agreements and slightly decreased production due to the joint venture sale.

Other operations which now include the remaining merchant segment operations had an operating loss of $7 million compared to operating income of $16 million in the first quarter of 2002. The 2003 period was affected by reduced margins in power trading and gas marketing as a result of scaling back trading activities and increased depreciation relating to a co-generation facility placed in San Francisco during 2002. The 2002 period was favorably impacted by a gain on the sale of gas retail marketing contracts and the reversal of related reserves.

Turning to liquidity, in addition to the strong operating performance of the first quarter of 2003, NiSource also made significant progress improving the balance sheet and its liquidity position. We ended the first quarter with $161.3 million of short-term debt outstanding, compared to$913.1 million outstanding at the end of 2002, and$1,117,000,000 at the end of March 2002. At one point in February, as Gary mentioned, we had reduced short-term debt borrowings to zero.

We presently maintain bank credit facilities totaling $1.25 billion. Because of our enhanced liquidity position, we elected not to renew a$500 million, 364-day credit facility during the first quarter of 2003. Since the end of the year, short term debt balance has been reduced by about$750 million and our total debt has been reduced by about $500 million.

We ended the first quarter of 2003 with total debt of $6,670,000,000, or58.5% of total capitalization. This compares to total debt of $7,164,000,000 at the end of 2002,or 60.9% of total capitalization. This compares to total debt of 8,579,000,000 at the end of 2001,or about 68.5% of total capitalization. This$1.9 billion debt reduction in the last 15 months illustrates NiSource's progress and commitment to a strong balance sheet.

Now I'll turn it back to Gary for his closing remarks.

Thanks, Mike. We'd like to turn to your questions now, but let me remind you once again that we're unable to answer any questions concerning the status of our E & P business. Having said that, let's open it for questions.

At this time, I would like to remind everyone, in order to ask a question, please press"*1" on your telephone keypad. Again, if you would like to ask a question, please press "*1" on your telephone keypad.

We'll pause for just a moment to compile the Q and A roster.

Your first question comes from Denado Assay (ph) from Royal Research.

Good morning. Thanks for hosting the call. Basically my main question deals with CAPEX. You had a forecast of about 648 million for the year, and I was just wondering if that changed or the pro-ration of that changed between the segments as well.

No change, Denado.

Even the 13% for E & P? I guess that's a question you can't answer. All right. Lastly, Mike, obviously you didn't renew it. I guess there's costs involved there, but this was just a cost decision and you got plenty of cash on hand?

That's right. It was really a liquidity decision with the 1.25 billion facility and the reduced short-term borrowings that we have, we find ourselves with plenty of liquidity.

And no need. Ok. Very good. Congratulations, and all the best the rest of the year.

Thanks, Denado.

Your next question comes from Devon Goshehan (ph) of Lunis Management (ph)

Just a couple questions for you. One, was looking at the income statement, and I must be confused, but the 99 cents, does that include the gain on asset sale or is that excluding it

It includes the gain on the asset sale. That's after the discounts and the accounting change.

Then the 99 cents -- how much of the asset sales are in there? Is it the 67.7?

Yes, that's right.

Ok. So about like 15 cents? I guess giving different tax assumptions?

Yeah, 15 cents, but most of that is from the E& P sale, and if you look at the E & P segment as a whole, take into account the lower prices, it's about 10 cents.

We sold off some reserves, so you've lowered the earnings out of that operation.

Ok.

You have to net about $30 million against that$70 million.

Ok. That makes sense. So in terms of on going, I should use the 99 cents minus a dime? Is that fair?

I think, you know, I think that's right.

Ok. That makes sense. One last question on weather. I know it was above last year, but is it15 cents above last year or is the number less if you do it above the theoretical norm?

The 15 cents is above last year.

Ok. Do you know what it would be if it were just above the theoretical norm?

I'd have to calculate it, but probably about a third of it is from the amount above normal.

Ok. So

9% above normal compared to 27% total, so like nine/27ths is the percentage above normal.

Ok. I appreciate that. Congratulations on a great quarter.

Your next question comes from Paul Ridzon from McDonald Investments.

Good morning. A couple questions. Firstly, how much of your 1.25 billion is drawn?

At the moment, it would be in the 3- to$400 million range. It depends really on gas purchase costs.

And refill of storage.

I missed your -

It's just -- it's almost 100% tied to gas going into storage.

Ok. And I missed your cap ratio at 331.

Yeah, at 331, it was with 58.5%.)

So you've made some progress. There's been a lot of noise about bad debt, you know, in the talk. I'm just wondering if you could give a little more detail as to the magnitude of it.

Actually, we're still doing the calculations, but it looks like it's better -- we're better than we were in March of 2001, when we really got hit with the bad debt expense in the fall of 2000. This season dragged out better, so we are significantly better than we were during that period of March of 2001. And it's up, you know, from 2002, where we had a warm winter, and it was probably about 180 million, and it's probably up to about 240 million or something like that. But those are -- that's where it stands, but, you know, we're out for collection on a lot of stuff too. We're jumping on top of it on collection.

What's your outlook through the course of the year, how much you can work that down?

Well, we're starting to get cooperation from the states and we're working with each one of our states, you know, to do something to offset these bad -- this bad debt expense. We're working with trackers, we're working with a variety of things. So that's hard to say, Paul. But, you know, we're happy that, you know, we had the first cold winter in five or six years and the bad debt expense didn't get anywhere near where it was in the spring of 2001.

that's right. The reserve for uncollectible expense is actually a smaller percentage of total receivables than it was last year, reflecting a lot of these efforts. So it's going to track the receivables balance which should start to go down now that we're out of the winter season.

The last thing, Gary, I know you said you can' comment on E & P. I'm just wondering if have you a time frame when you think you may be able to comment.

I don't, Paul. Obviously, you know, you're in negotiations on a transaction so it's -- I don't want to forecast it, I don't want to predict the outcome.

Ok. Fair enough. Thank you very much.

Your next question comes from David Maccarrone from Goldman Sachs.

Thank you. Mike, I was hoping you could explain a little bit further the decline in transmission and storage operations with respect to both the interruptible revenues and what you say in the press release, higher costs to meet customer demand. Can you discuss that a little further?

Yes, David. What happened in the extremely cold weather we had in January and February, and actually into the early part of March, we had almost unprecedented draws on the system, demands on the system, so that has a couple of influences.

One, it makes the opportunity to supply interruptible services smaller because more of the system is being used. So the interruptible customers don't get the opportunity to flow gas.

Also, on what we call the incremental revenue opportunities, that's things like very short-terms to rage transactions that we do, different capacity-type transactions on the system. When the system is fully utilized because of the cold weather, there's less opportunity to do that. So the combination -- combination of both of those was a reduction in revenues of about $17 million.

For the first time in our history, we had an operational flow order in late February for a few days because of the unprecedented demand and continuous demand on the system, so as a result of that, we had to ask customers to not use storage, and instead use firm transportation service and, in effect, buy gas currently. That also had an impact on the revenue and the cost of the system. But having said all that, the good news was that the system operated at very, very low levels of storage.

The storage level that is we haven't been to in many years. And it was really good to see how well the system held up and operate operated during that very extreme we.

I think almost every one of the pipelines in the Northeast, in the northeast area had operational flow orders. We think that we had it less than almost everyone else, but everyone suffered through it because of the length and depth of the cold spell that lasted well over 100days.

Ok. And then on the cost fractures and reserve changes that contributed to a $23 million increase in O&M, can you break that down into the individual components, how much was cost trackers and how much were reserve changes and what those reserve changes relate to?

Yes. Just give me a second, David. The factors that reduced the revenue last year - let me start with 2002 -- there were two reserve reversals having to do with the sale of the retail gas contracts. One was a gain on that sale of about $3 million, and the other was a reserve reversal of about $10 million for -- it was an uncollectible reserve that we needed because the contracts were sold. Then we also had insurance recoveries in the period of about $10 million, so in total, 2002 expenses were reduced by about $19 million. 2003 expenses were increased by about $6 million from a variety of factors.

Chief among them were the uncollectibles, and then there were some things going the other way. So that brings down the difference between 2002 and 2003is about $16 million, which is about equal to the cost trackers that we had for two main items. One is the PIC plan, the percentage of income in Ohio, and the other is a CAP program, customer assistance programs, both plans that are collected in rates in subsequent periods, so they track back. But they originally flow through operating expense.

So having done that, making those adjustments, operating expense on an adjusted basis was about equal in both periods, and that's what leads us to conclude we've met our goal of having cost reductions from streamlining the operation, offset the increase in pension and insurance expense, which on an annual basis is about 50 million.

During the year 2002, we reduced head count by about 1,000 full time equivalents, and we're seeing the effect of that now, and we'll have that affect run rate as we go through the year.

Ok. And then to follow up on bad debt expense, can you tell us what percentage allowance for uncollectibles you're using today or in the first quarter versus the prior year? And then what that percentage was in the dismal winter of 2000-2001,and what the actual report was or actual realized uncollectibles were in that winter, and then also in this quarter, most recent quarter, how much was the bad debt expense on an absolute basis versus first quarter 2002?

That's a little more details than I have, Dave, but let me just do it this way. The charge-off percentage in the back period, in the 2002 period, was seven-plus percent. I'm sorry, that's the uncollectible reserve as a percentage of total accounts receivable. In the current period, it's about 6%. And that reflected, I think, the improvements in our collection opportunities.

I really don't have the components with me that get into how the reserve goes up and it goes down. I'd have to drill into that.

We have the total dollars delinquent for March 2003 versus 2001 and we're $58 million less than we had in March of 2001.

Ok. That's great. And then last question is, the DD and A expense in E & P rose, which was surprising to me in light of the good asset sale that you had earlier. What does that relate to?

It would relate mostly to successful efforts expensing, and you get an erratic pattern during the year because almost everything spent on drilling is expensed under successful efforts, so that's what that would be.

Ok. Thanks very much.

You're welcome.

Your next question comes from Paul Deboss (ph) of Value Line.

Hi. What was the dollar amount of that70.8 million gain after taxes?

The pre-tax amount was 90 million.

Operator: Pre-tax amount was 90 million?

95 million.

So the release said it was a pre-tax gain of70.8 million. Where does the -- where does the 90 come in?

Ok. Let me back up. The pre-tax gain was70.8 million. The sales price was $95 million. I guess I'm not sure what your question is.

What's the after-tax gain?

The after-tax, just apply 37% to it.

All right. Thanks.

Your next question comes from Sean Burke (ph) of HSBC Securities.

Good morning. Two questions today. Clearly the gas distribution results look particularly strong for the quarter. I was would be wondering if that was fairly uniform throughout the system or if there were some pockets of strong performance, in particular Columbia or base states, and secondly, if you could broadly give us an update on where you stand with the rating agencies. Clearly with these debt pay down districts, the Moody's outlook is looking a little stale. I was wondering if you'd be able to provide us with an update.

Thank you. Actually the good news is, it was across the board of. All of our LDC's were up. Obviously places like Massachusetts were significantly colder than normal early on in the season is, and then they got warm and the rest of them stayed a little colder. But every one of our LDC properties were up for the year and had slightly colder than normal weather and had very good production. Mike, the rating agency?

Yes, Gary. Obviously we're in constant contact with them and pointing out these improvements, and they obviously take note of that. It is a tremendous improvement in a short period of time. We're planning to put together some numbers and go back within the next month or two and kind of build in where we are and what the plan is for the rest of the year and then see what happens on the rating side.

Fair enough. Thank you.

Your next question comes from Craig Lucas from Zimmer, Lucas.

Thank you very much. I wanted to go back from an earlier question in terms of transmission storage. Does that mean if we have warmer than normal weather going forward, you should pick up17 million of revenue in that segment?

As perverse as it sounds, yes, but keep in mind that the reduction in revenue was caused by the extreme weather that we had and the continuous cold weather, so the likelihood of that happening again is very, very remote.

Was that netted in the 15-cent weather impact that was previously given?

Yes.

Oh, so it was -- the weather impact would have been larger but then you reduced -

Yes.

That's right. We reduced it for that impact and for the higher uncollectible expense.

Ok. My second question has to do with the balance sheet, and the E & P sale that we're not allowed talk about. I was just curious, could you walk us through just briefly to refresh our memories in terms of what the rating agencies do in terms of the forward sales, and if you were to sell it, how much debt would be deconsolidated?

That's really getting too close to where we're at.

I think we can tell you that the forward sale is looked at as quasi debt, even though we don't agree it was debt -

They would call it quasi debt. But other than that, we can't answer your question.

What is the balance of the forward sales that would be deconsolidated? This doesn't have do with any proceeds or anything, just in principle.

The deferred revenue balance is about $260 million.

Ok. Thank you very much.

You're welcome.

Your next question comes from Mark Lewenberg (ph) of Kallan Capital (ph)

Good morning. In the past you said you've been come comfortable with consensus street assets for within .67 dollars for the year. Are you still comfortable with those numbers?

I'm not sure if this is the $1.67, whatever the number is, we're still comfortable with the consensus number.

Ok. Great. And now would those in your mind, do those numbers include the gain on the asset sales or not?

Let's just say right now, we're comfortable with the street numbers for continuing operations.

Ok. Great. And then obviously you had a big balance sheet improvement this quarter. Looking forward, are you comfortable with those levels or might you consider any more common equity issuance?

A lot depends on what happens on transactions coming up in the next month or so, so at this time, we're not contemplating any more equity sales, depending on these transactions.

Thanks so much.

At this time, I would like to remind everyone, if you would like to ask a question, please press "*1" on your telephone keypad. Again if you would like to ask a question, please press "*1" on your telephone keypad.

Your next question is a follow-up question of Devon Goshehan of Lunis Management.

I'm getting a little turned around with all the weather stuff. Let me just reiterate what it seems and then you probably need to correct me. It's 99 cents minus 5 cents, you get to 94 cents, and then about a dime of the asset sailor whatnot, so 84 cents, you were saying earlier that you said some back. I guess someone had he earlier asked if you have normal weather, you lose some of the loss, but how much of that, I guess, if you will, loss of a loss or re-earning gets offset by other stuff -- other stuff going away as weather goes back (inaudible)? Does that make sense?

Can I suggest you give us a call and we'll walk you through this instead of trying to do this onto the call? I think you're off on some of your assumption, and we'll walk you through the weather corrections and so on.

Ok. Thank you.

If you want to go through it.

Your next question is from Gil Gabbay of J.P. Morgan.

Good morning, everybody. Thanks for hosting the call, by the way. I just want to get a little more color on your other segment. I know that you guys have put primary energy inside of there. You also mentioned, I think, earlier that there were some reserve reversals. Can you break out what the contributions were for all the moving parts? That would be very helpful.

Ok. Last year, we talked about the 2002 reserve reversals from the sale of the old Columbia a trading business. They amounted to about $13 million last year. And that's in the other segment. This year, what remains in the segment is the primary energy business mostly inside the fence co-generation and the very small commercial and industrial marketing business that we have here in Indiana and a very small power trading operation. Those combined this year, the marketing and power trading, were down about$4 million in total.

And they had positive contributions last year, I forget exactly what the number was, but those two things, the reduction in the marketing and power trading and the positive one-time items this period last year explain most of the change in other.

Ok. Great. Thanks.

Your next question is from Jessica Rutledge (ph) of LaSard (ph).

Two quick questions for you. The cost trackers that we were talking about where you recorded operating expenses this quarter that you expect to recover through rates, did you book that as a regulatory asset or is it sort of deducted from O&M somewhere else, or do we just expect to seethe earnings impact reversal reverse -- reverse a little bit throughout the year?

The answer is it is booked as a regulatory asset.

Ok. Excellent. And then also just wondering if you can tell us what the cash is on your balance sheet these days so we can finish off the capitalization snapshot?

Yes. Just a second. The cash at the end of the quarter was $69.5 million.

Thank you.

Your next question is from Jonathan Arnold of Merrill Lynch.

Hi. Good morning. Can I just ask this question on the weather slightly differently? Can you just break out what the components of the 15cents are? And it sounded like there were maybe three.

The three components are colder than normal weather for the distribution companies, and then what happened in the pipeline, the two pieces in the pipeline business.

Yeah, and I think a way to do that, go back to the beginning, the total revenue increases from weather, and this is at all the gas LDC's plus a little bit from the electric company, was $90.7 million. The reduction at the transmission storage operation, because of the two factors we talked about, was 17.4 million. The production, because of the higher uncollectible expense, was13.6, and that all nets to 59.7 million.

Was that 13.6, the last number?

Yes.

Ok. Thank you very much.

You're welcome.

Your next question is from Tim Flannery (ph) of Cobia (ph) Capital.

One more clarification on your consensus estimate. This quarter obviously included the gains from sales on E & P assets, so you're comfortable with the consensus, so I assume that it will be consistent in that those gains will be included in operations, operating income? And just some color on the treatment of that from an accounting standpoint.

Well, it depends. That's a difficult question to answer because, you know, you sold a portion of it, if it goes to -- it's not part of continuing operations, so I don't think there's an answer to that yet as we look forward. What we said is that we're comfortable with the street estimates, current street estimates from the year for continuing operations.

And the rationale for including this in continuing operations?

It hasn't been discop'd (ph).

Ok. Thank you.

At this time, there are no further questions. As a reminder, this call will be available for replay beginning at 12:00 p.m. Eastern Standard Time today through 11:59 p.m. Eastern Standard Time on May 6th, 2003. The conference I.D. for the replay is 972-1594. The number to dial for the replay is 1-800-642-1687,or 706-645-9291. Gentlemen, are there any closing comments?

No, we'd just like to thank you all for being on the call this morning, and our commitment is to keep you informed of everything that's happening in the company, and we'll continue to do that. Thank you all.

Thank you for participating in today's NiSource conference. You may now disconnect.