Sparked by warmer than normal weather last summer and colder than normal weather last fall, NiSource Inc. posted income from continuing operations for 2002 of $425.7 million, or $2.02 per share, compared to $226.4 million, or $1.10 per share, in fiscal year 2001. Net income for 2002 was $372.5 million, or $1.77 per share, compared to $216.2 million, or $1.05 per share, in 2001.

“We refocused our strategy on our core regulated, asset-based businesses while reducing our overall company risk profile, and we delivered on the commitments we made,” said CEO Gary L. Neale. “We reduced debt by $1.4 billion, completed one of the most successful equity offerings in the industry and reduced operation and maintenance expenses.”

For the fourth quarter, the company reported income from continuing operations of $133.9 million, or 59 cents per share, versus $67.7 million, or 33 cents per share, in the fourth quarter of 2001. Net income for the fourth quarter of 2002 was $82.1 million, or 36 cents per share, compared to $66.9 million, or 33 cents per share, in the comparable 2001 quarter.

NiSource’s gas distribution segment led all contributors, reporting fourth-quarter operating income of $194.8 million, an increase of $71.2 million versus the fourth quarter of 2001. The company attributed the increase to colder-than-normal weather that was 37% colder than the 2001 period. For the year, the segment reported operating income of $459.1 million, an increase of $78.3 million from the same period in 2001. The company noted that the favorable impact of colder weather during the latter part of the 2002 heating season, partly reduced by warmer weather during the heating season earlier in the year, increased operating income $21.8 million for the year.

Reversing a previous statement, NiSource said its natural gas exploration and production (E&P) business was included in continuing operations on the fourth quarter and full-year 2002 reports. Earlier in the year the company had indicated the E&P business would be reported as discontinued operations for the fourth quarter due to the company’s intention to sell the assets.

As announced on Tuesday (see Daily GPI, Jan. 29), NiSource sold approximately 3.5% of the E&P reserves in a cash transaction for $95 million. NiSource said it will no longer invest in exploratory drilling. The company added that it will “focus on maximizing production from its existing assets while actively seeking opportunities to monetize the value of these assets.”

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