NiSource Inc. Index Page Executive Summary 36 Summary of Consolidated Financial Results 37 Results and Discussion of Segment Operations 38 Gas Distribution Operations 39 Electric Operations 42 Liquidity and Capital Resources 45 Regulatory and Other Matters 48 Off-Balance Sheet Arrangements 50 Market Risk Disclosures 50 Other Information 51 35 -------------------------------------------------------------------------------- Table of Contents ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) NiSource Inc. EXECUTIVE SUMMARY This Management's Discussion and Analysis of Financial Condition and Results of Operations ("Management's Discussion") includes management's analysis of past financial results and certain potential factors that may affect future results, potential future risks and approaches that may be used to manage those risks.