EXHIBIT 99
----------
NISOURCE
CONNECTING CUSTOMERS AND ENERGY
IN OUR CORRIDOR
NOVEMBER 2000
These materials contain forward-looking statements as defined in Section
21E of the Securities Exchange Act of 1934, including statements about
future business operations and financial performance. These statements
involve risks and uncertainties inherent in business forecasts, and
actual results could differ materially from those indicated in these
statements. A number of these risks and uncertainties are discussed in
NiSource's Form 10-Q Quarterly Report filed with the Securities and
Exchange Commission on October 31, 2000, as well as on the following
page.
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FORWARD-LOOKING STATEMENTS
Some of the information included herein are forward-looking state-
ments within the meaning of the securities laws. These statements
concern our plans, expectations and objectives for future operations.
Any statement that is not a historical fact is a forward-looking state-
ment, including, but not limited to, statements concerning earnings
per share in 2001 and the timing and proceeds of certain proposed aset
sales. We may use the words "estimate," "intend," "expect," "believe,"
"anticipate" and similar expressions to identify forward-looking
statements, but some of these statements may use other phrasing.
NiSource undertakes no obligation to release any revisions to these
forward-looking statements publicly to reflect events or circumstances
after the date of this filing or to reflect the occurrence of unantici-
pated events. While we make the forward-looking statements in good
faith and believe they are based on reasonable assumptions, these
statements are subject to risks and uncertainties. Important factors
that could cause actual results to differ materially from those sug-
gested by the forward-looking statements include:
* the weather;
* the federal and state regulatory environment, including
changes in environmental and other laws and regulations
to which we are subject;
* the economic climate;
* growth in our service territories;
* customers' usage patterns and preferences;
* the degree to which and the speed with which competition
changes the utility industry;
* fluctuation in supply and demand for energy commodities
and the timing and extent of changes in commodity prices;
* changing conditions in the capital equity markets;
* whether, and the extent to which, we achieve efficiencies
and cost savings from the integration of the former
NiSource and Columbia Energy Group businesses; and
* other uncertainties, all of which are difficult to predict,
and many of which are beyond our control, including factors
we discuss in this filing and our filings with the SEC.
Accordingly, you should not rely on the accuracy of predictions
contained in forward-looking statements. These statements speak only
as of the date of this filing.
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WE ARE CREATING THE PREMIER COMPETITOR IN OUR ENERGY CORRIDOR
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* Fast-growing region [GRAPHIC OF ENERGY
- 30% population / 40% of CORRIDOR]
U.S. energy consumption
- 85 GW gas-fired generation and
24 Bcf/d gas pipelines proposed
* Strategic Assets within the Corridor
- Largest gas distribution company
east of the Rockies
- 2nd largest U.S. underground
gas storage
- 4th largest U.S. gas pipeline
company
* Superior skill set and knowledge base
- Full range of energy delivery
capabilities
- Experienced management - best of
both worlds
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BY ASSEMBLING A PORTFOLIO OF SOLID GROWTH BUSINESS
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<TABLE>
<CAPTION>
NISOURCE
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GAS GROWTH
GAS TRANSMISSION EXPLORATION ELECTRIC PRODUCTS
DISTRIBUTION AND STORAGE & PRODUCTION OPERATIONS & SERVICES
------------- ----------- ------------- ---------- -----------
* 3.2 million * 16,500 miles of * Based primarily * 426,000 custo- * Primary Energy
customers in nine pipeline in 16 in Appalachia and mers (co-generation)
states states Canada * 3,382 MW of coal * Distributed
* 51,700 miles of * 670 Bcf of under- * Proved gas reserves and gas-fired generation
distribution ground gas storage of 966 Bcfe generation * Energy USA-
pipeline TPC (energy
marketing)
</TABLE>
Note: Excludes assets to be divested.
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IN AN INDUSTRY WITH COMPELLING FUNDAMENTALS
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GROWTH DRIVEN BY NEW NATURAL GAS DEMAND
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* Demand for natural gas to increase
to approximately 30 Tcf by 2010
[Graph showing electricity
generation and all other uses * 25% demand growth through 2010
of natural gas for 1998, 2005 (2.1% annual growth rate in
and 2010] electricity)
* More volatility due to significant
summer demand and competition with
gas needed to fill storage
Source: Natural Petroleum Council
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AND BY CAPITALIZING UPON NEW ECONOMY OPPORTUNITIES
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GENERATION NEEDS TO MOVE CLOSER TO THE CUSTOMER -- IMPROVING GAS
CAPACITY UTILIZATION WITH MINIMAL CAPITAL AT RISK
COMBINED HEAT/POWER FUEL CELL
------------------- ---------
[Picture of micro turbine on [Picture of Worker
roof of Walgreens store] and Fuel Cell]
IGT Institute of
Gas Technology
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FUELED BY OUR STRATEGIC COMBINATION WITH COLUMBIA ENERGY
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FASTEST EVER APPROVAL FOR A PUHCA REGISTERED DEAL
* Closed transaction on November 1st (eight months after signing)
* $6.0 BN equity purchase price plus assumption of $2.0 BN debt
- Financed with 56% equity and equity-related capital
* 30% stock election - 77% of Columbia holders elected stock, but
were prorated
* $2.5 BN debt capital markets issuance completed on November 14th
- Largest-ever gas holding company financing
- Blended interest rate of 7.88%: low-cost financing
- Oversubscribed order book
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BRINGING TOGETHER THE BEST OF BOTH WORLDS
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
*****************************
* Gary L. Neale *
* Chairman, President & CEO *
* (NiSource) *
*****************************
*
***************************
* *
* ***********************
* * Stephen P. Adik *
* * Vice Chairman *
* * (NiSource) *
* ***********************
* *
* ***********************************
* * *
* *********************** *
* * Michael W. O'Donnell* *
* * Executive V.P. & CFO* *
* * (Former Columbia) * *
* *********************** *
* ****************************** *
* * * *
* ************************* ************************** *
* * Francis P. Girot, Jr. * * Dennis McFarland * *
* * Treasurer * * VP, Finance & Planning * *
* * (NiSource) * * (Former Columbia) * *
* ************************* ************************** *
* *
* *
************************************************************************************ *
* * * * * *
****************** ********************* ******************** ******************* ******************* ********************
*Jeffrey W. Yundt* *Catherine G. Abbott* *Patrick J. Mulchay* * Joseph L. Turner* * Mark D. Wyckoff * * Stephen P. Smith *
* President * * President * * President * * President * * President * * President *
* Energy * Pipeline * * Merchant * * Primary * * New Energy * * Business *
* Distribution * * Operations * * Energy * * Energy, Inc. * * Businesses * * Services *
* (NiSource) * * (Former Columbia) * * (NiSource) * * (NiSource) * * (NiSource) * * (Former Columbia)*
****************** ********************* ******************** ******************* ******************* ********************
</TABLE>
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FOCUSING OUR STRATEGY
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Non-Core Asset Sales
EXPECTED
PRE-TAX AFTER-TAX EXPECTED
PROCEEDS ($MM) PROCEEDS ($MM) TIMING
-------------- -------------- ------
Sales Completed:
MHP, Columbia LNG,
Columbia Retail $444 $365 Completed
Definitive Agreements:
Columbia Electric/QFs $323 $226 Q4 2000
Miller Pipeline 68 50 Q4 2000
------------ ----------
Subtotal 835 641
Sales in Progress:
Columbia Propane,
Columbia Petroleum,
IWCR, other unregu-
lated businesses Up to $635 Up to $710 Q4 2000 -
============ ============ Q1 2001
Total Up to $1,470 Up to $1,351
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CREATING ONE OF THE PREMIER DIVERSIFIED GAS PORTFOLIOS
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NISOURCE PRO FORMA LTM EBITDA (1)(2)(3)(4)
---------------------------------------------
[GRAPHIC -- PIE CHART]
Gas Distribution 32%
Electric Operations 32%
Gas Transmission 27%
E&P 6%
Growth Products & Services 3%
$1,672 MM
---------
(1) Twelve months ended September 30, 2000
(2) Reflects completion of $1.4 BN non-core asset sale program
(3) Does not include expected synergies of $100 MM
(4) Excludes corporate overhead of $73 MM
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WITH SIGNIFICANT CAPITAL EARMARKED FOR FUTURE GROWTH
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2001E CAPITAL EXPENDITURES (1)(2)
---------------------------------
[GRAPHIC -- PIE CHART]
Gas Distribution 36% ----> $300 MM Growth Capex
--------------------
86% Gas, 9% Electric, 5%
Growth Products & Services
Electric Operations 19%
Gas Transmission 21%
E&P 21%
Growth Products & Services 3%
$615 MM
---------
(1) Reflects completion of $1.4 BN non-core asset sale program
(2) Excludes $36 MM in merger-related capitalized costs
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IN ORDER TO BUILD UPON OUR CORE GAS DISTRIBUTION BUSINESS
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[MAP OF COLUMBIA GAS * Industry-leading scale
SERVICE TERRITORY AND * Diversification of customers and
NISOURCE GAS SERVICE jurisdictions
TERRITORY] * Favorable overall regulatory environment
- Customer Choice
- No rate proceedings
* Strong regulatory relationships
- Incentive opportunities
* Vertical integration with pipeline
and E&P
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OUR INTEGRATED GAS TRANSMISSION/STORAGE SYSTEM
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[MAP OF STORAGE * One of the largest integrated systems
FACILITIES, in U.S.
COLUMBIA PIPELINES, * Majority of capacity sold to LDC
DOMINION PIPELINES, affiliates; nearly fully contracted
EL PASO PIPELINES, * Competitive cost structure versus
CROSSROADS PIPELINE, other pipeline systems in the Mid-
MILLENNIUM PIPELINE, Atlantic region
VECTOR PIPELINE AND * Unique web-like network benefits from
PNGTS] integrated storage and access to supply
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AND OUR EXPLORATION AND PRODUCTION EFFORT
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[MAP OF OPERATION * Long-lived Appalachian reserves combined
HEADQUARTERS, REGIONAL - 85% historical success rate
OFFICES, UNITED STATES - Low finding costs
OPERATING REGION AND * Technical expertise due to historical
CANADIAN JOINT focus
VENTURES] * Balanced, diverse portfolio (over 8,100
wells) and gas gathering infrastructure
* Well-managed commodity risk
- Hedging 80% production 6 months forward
- 40% for the next six months (6-12)
* Average price for '01 is forecast to be
$3.72/Mcf
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LEVERAGING OUR EXISTING ELECTRIC POSITION IN THE MIDWEST
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[MAP SHOWING NIPSCO, * Low-cost portfolio of coal-fired
ECAR, MAPP, MAIN, SPP, generation (3,400 MW)
SERC, NPCC, MAAC STATES - Comparable transactions suggest
AND CHICAGO, CINERGY AND value > book
MICHIGAN MARKETS] * Gateway interconnect with five
surrounding control areas
- Net long asset position
- Sell excess energy into Chicago,
Cinergy and Michigan markets
* Rates have not changed since 1988
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AND CAPTURING PROFITS FROM EMERGING OPPORTUNITIES WITHIN OUR FOOTPRINT
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* Focused trading and marketing on existing asset and customer base
- Capitalize on optionality created by geographic and fuel
diversification
- Physical positions only
- Profitability is critical
* Large industrial customer base provides multiple new inside the
fence cogeneration opportunities
- Build excess capacity to capitalize on marginal cost differential
- Limited capital outlay required
* Distributed generation
- Increased distribution capacity utilization
- Sale/lease/service of units
- Component integration to create Combined Heat/Power units
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IMPROVING OUR EARNINGS OUTLOOK
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Including the equity offering, 2001E EPS are
projected at the high end of current First Call
range of $2.03 to $2.10
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THROUGH 2001 ACCRETION
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<TABLE>
<CAPTION>
(Dollars in Millions,
except per share data) 2001E Comments
---------------------------------------------------------------------------------------------------
<S> <C> <C>
Asset Sale Foregone Pre-Tax Income (68) Reflects completion of remaining asset sales
Pre-Tax Synergies 100 Comfortable with estimate
Goodwill/Write-up (99) $3.5 BN of goodwill over 40 years and
amortization of asset write-up over 20 years
net of debt
Interest on Acquisition Debt (213) $2.5 BN in long term bonds @ 7.88% and 1Q 01
completion of remaining asset sales
Imputed Interest of SAILS{SM} (9) Interest accreting per annum on beginning
balance of $106.1 MM
</TABLE>
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STRENGTHENING OUR BALANCE SHEET
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As of September 30th, 2000
------------------------------------------------------
NISOURCE COLUMBIA PROFORMA
-------- -------- --------
Cash 51.0 30.3 81.3
CAPITALIZATION:
Debt 2,575.3 2,004.4 7,044.3(1)(2)
Preferred Stock 135.8 - 133.3(1)
Equity-Linked Securities(3) 345.0 - 451.1
Shareholder Equity 1,352.1 2,034.3 3,384.2(2)(4)
------- ------- --------
Total Capitalization 4,408.2 4,038.7 11,012.9
RATIOS:
Debt 64.0%
Preferred Stock 1.2%
Equity/Equity-Linked 34.8%
-----
Total 100.0%
(1) Assume after-tax proceeds from sale of assets of $760 MM are
applied to debt reduction and $220 MM of debt and $2.5 MM of
preferred stock related to the assets are assumed by the new
owners
(2) Pro forma for $250 MM equity offering
(3) Includes PIES and SAILS
(3) Assume after-tax gain of approximately $20 MM from remaining
asset sales
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AND POSITIONING US FOR LONGER TERM EARNINGS GROWTH
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10%+ CAGR
GROWTH DRIVERS
--------------
[Graph showing Distributed * Customer growth and cost cutting at
Generation Electric Optionality, regulated businesses
Gas Optionality and Base Business * Continued drilling program in
for 2001E, 2002E, 2003E, 2004E Appalachia
and 2005E] * Millennium pipeline project
* Manage combined delivery network to
capture value
* Leverage Midwest electric position
and extensive gas network
* Bring energy closer to customer
(distributed generation/fuel cell)
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PROVING A COMPELLING VALUATION OPPORTUNITY
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[Graph showing the following information for the following energy
companies]
EPS Growth
2001E P/E(1) Rate(%):(1)
------------ -----------
El Paso Energy 20.2x 15.0
Dominion Resources 15.9x 10.0
KeySpan Energy 14.5x 10.0
Gas Diversified Distribution(2) 14.5x 9.1
NiSource 11.8x 10.0+
(1) I/B/E/S Concensus 2001 P/E and I/B/E/S Consensus LTG rate, as of
November 17, 2000.
(2) Questar, Equitable Resources, National Fuel Gas, KeySpan Energy.
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NiSource
Connecting Customers and Energy in Our Corridor
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