<PAGE> 1
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 20, 2000
10,000,000 Shares
[NISOURCE LOGO]
NISOURCE INC.
Common Stock
------------------
Our common stock is listed on The New York Stock Exchange under the trading
symbol "NI." The last reported sale price on November 30, 2000 was $25 11/16 per
share.
The underwriters have a 30-day option to purchase a maximum of 1,500,000
additional shares to cover over-allotments of shares.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS NISOURCE
------------ ------------- ------------
<S> <C> <C> <C>
Per Share............................................ $25.25 $0.82 $24.43
Total................................................ $252,500,000 $8,200,000 $244,300,000
</TABLE>
Delivery of the shares of common stock will be made on or about December 6,
2000.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the prospectus to which it relates is truthful or
complete. Any representation to the contrary is a criminal offense.
CREDIT SUISSE FIRST BOSTON MERRILL LYNCH & CO.
The date of this prospectus supplement is November 30, 2000.
<PAGE> 2
[A diagram of the eastern half of the United States, showing the "energy
corridor" extending from the supply areas in the Gulf Coast through the
consumption centers in the Midwest, Mid-Atlantic and Northeast.]
NISOURCE
o Largest gas distribution company east of the Rockies
o Second largest U.S. underground gas storage network
o Fourth largest U.S. interstate gas pipeline company
o 3.6 million gas and electric customers in nine states
<PAGE> 3
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
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PAGE
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ABOUT THIS PROSPECTUS SUPPLEMENT....... S-1
SUMMARY................................ S-2
USE OF PROCEEDS........................ S-4
SELECTED HISTORICAL CONSOLIDATED
FINANCIAL INFORMATION................ S-5
</TABLE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SELECTED UNAUDITED PROFORMA COMBINED
FINANCIAL INFORMATION................ S-7
UNDERWRITING........................... S-8
NOTICE TO CANADIAN RESIDENTS........... S-10
LEGAL MATTERS.......................... S-10
EXPERTS................................ S-11
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
ABOUT THIS PROSPECTUS................... 1
WHERE YOU CAN FIND MORE INFORMATION..... 1
FORWARD-LOOKING STATEMENTS.............. 3
NISOURCE INC. .......................... 4
NISOURCE FINANCE CORP................... 6
USE OF PROCEEDS......................... 6
RATIOS OF EARNINGS TO FIXED CHARGES..... 7
DESCRIPTION OF CAPITAL STOCK............ 8
DESCRIPTION OF THE DEBT SECURITIES...... 11
PLAN OF DISTRIBUTION.................... 21
LEGAL OPINIONS.......................... 22
EXPERTS................................. 22
</TABLE>
------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first is this prospectus supplement,
which describes the specific terms of this common stock offering. The second
part, the accompanying prospectus, gives more general information, some of which
may not apply to this offering.
If the description of the offering varies between this prospectus
supplement and the accompanying prospectus, you should rely on the information
in this prospectus supplement.
S-1
<PAGE> 4
SUMMARY
This summary highlights certain information appearing elsewhere in this
document. This summary is not complete and does not contain all of the
information that you should consider before purchasing the common stock. Unless
the context requires otherwise, references to "we," "us" or "our" refer
collectively to NiSource and its subsidiaries.
NiSOURCE
Overview. NiSource is a super-regional energy holding company that provides
natural gas, electricity and other products and services to 3.6 million
customers located within the energy corridor that runs from the Gulf Coast
through the Midwest to New England. On November 1, 2000, NiSource completed its
acquisition of Columbia Energy Group for aggregate consideration of
approximately $6 billion, with 30% of the consideration paid in common stock and
70% of the consideration paid in cash and SAILS(SM)* (units each consisting of a
zero coupon debt security coupled with a forward equity contract). NiSource also
assumed approximately $2 billion in Columbia debt.
As a result of the acquisition, NiSource is the largest natural gas
distribution company, as measured by number of customers, operating east of the
Rocky Mountains. NiSource's principal subsidiaries include the Columbia Energy
Group, a vertically-integrated natural gas distribution, transmission, storage
and exploration and production holding company whose subsidiaries provide
service to customers in the Midwest, the Mid-Atlantic and the Northeast;
Northern Indiana Public Service Company, a vertically-integrated gas and
electric company providing service to customers in northern Indiana; and Bay
State Gas Company, a natural gas distribution company serving customers in New
England. NiSource's business lines include:
- natural gas distribution;
- natural gas transmission and storage;
- exploration and production;
- electric operations; and
- growth products and services.
Strategy. NiSource is focused on becoming the premier energy company
serving customers throughout the energy-intensive corridor that extends from the
supply areas in the Gulf Coast through the consumption centers in the Midwest,
Mid-Atlantic and Northeast. This corridor is home to 30% of the nation's
population and 40% of its energy consumption. NiSource believes natural gas will
be the fuel of choice to meet the corridor's growing energy needs. The merger
with Columbia furthers our strategy by combining NiSource's natural gas
distribution assets in Indiana and New England with Columbia's natural gas
distribution, storage and exploration and production assets in Ohio, the
Mid-Atlantic and Appalachia and Columbia's interstate transmission assets.
Gas Distribution. NiSource is the second largest natural gas distribution
company in the U.S., as measured by throughput, delivering on average more than
2.3 billion cubic feet per day to its customers. NiSource provides natural gas
delivery service to more than 3.2 million customers in nine states.
Gas Transmission and Storage. NiSource is one of the largest natural gas
transportation companies in the U.S. NiSource owns and operates more than 16,500
miles of natural gas transmission lines that serve customers located primarily
in sixteen states and the District of Columbia. NiSource's pipeline assets are
integrated with approximately 670 billion cubic feet of underground storage
capacity, one of the largest underground natural gas storage networks in the
U.S.
---------------
* "SAILS(SM)" and "Stock Appreciation Income Linked Securities(SM)" are service
marks of Credit Suisse First Boston Corporation.
S-2
<PAGE> 5
Exploration and Production. NiSource owns nearly 1 trillion cubic feet
equivalent of proven natural gas reserves, located primarily within the
Appalachian region as well as Canada. NiSource controls over 6,000 miles of
natural gas gathering facilities, most of which connect with NiSource's
transmission facilities.
Electric Operations. NiSource provides electric generation, transmission
and distribution service to approximately 426,000 customers in northern Indiana.
NiSource owns and operates approximately 3,400 megawatts of relatively low-cost
installed electric generation capacity, fueled primarily by coal.
Growth Products and Services. NiSource works with industrial customers on
inside-the-fence cogeneration facilities located primarily in the Midwest.
NiSource is engaged in the development and commercialization of distributed
generation technologies, including fuel cells and microturbines. NiSource also
provides energy marketing and risk management services to utilities and other
customers. NiSource is currently constructing a 260 mile dark fiber
telecommunications network from Washington D.C. to New York City. NiSource also
provides water to customers in Indianapolis, Indiana, and surrounding areas.
Non-Core Divestitures. In connection with the Columbia acquisition,
NiSource has sold or is divesting certain businesses judged to be non-core to
NiSource's energy strategy. Subsequent to the announcement of the Columbia
acquisition, NiSource sold Market Hub Partners, which owns and operates salt
cavern gas storage facilities in Texas and Louisiana, and Columbia completed the
divestiture of its interest in the Cove Point LNG facilities, its retail
electric supply business and four qualifying facility power plants. Columbia
recently announced a definitive agreement for the sale of its electric
generation business, and NiSource announced a definitive agreement to sell its
Miller Pipeline subsidiary. After-tax proceeds from these asset sales are
expected to total approximately $640 million. NiSource is pursuing the sale of
Columbia's propane and petroleum and other smaller non-core businesses. As part
of the SEC order approving the Columbia merger, NiSource has been ordered to
divest its water utility business by November 2003.
NiSource is a registered holding company under the Public Utility Holding
Company Act of 1935. NiSource's principal executive offices are located at 801
East 86th Avenue, Merrillville, Indiana 46410, and its telephone number is (219)
853-5200.
THE OFFERING
Common stock offered.......... 10,000,000 shares
Common stock to be outstanding
after the offering............ 203,833,281 shares (205,333,281 shares if the
over-allotment option is exercised in full)
Use of proceeds............... We will use the net proceeds from the sale of
common stock to repay short-term borrowings
incurred in NiSource's November 2000
acquisition of Columbia Energy Group
New York Stock Exchange
symbol........................ NI
S-3
<PAGE> 6
USE OF PROCEEDS
Our net proceeds from the sale of the 10,000,000 shares of our common stock
in this offering (after deducting underwriting discounts and commissions and
estimated offering expenses payable by us) will be $244,235,000 ($280,880,000 if
the underwriters' over-allotment option in this offering is exercised in full).
We expect to use the net proceeds from the offering to repay short-term
borrowings incurred in our November 2000 acquisition of Columbia Energy Group.
S-4
<PAGE> 7
SELECTED HISTORICAL CONSOLIDATED
FINANCIAL INFORMATION
We are providing the following financial information about NiSource's
corporate predecessors to aid you in your analysis of NiSource after the
acquisition of Columbia Energy Group. This information is only a summary, and
you should read it together with the historical consolidated financial
statements of NiSource Inc. (incorporated in Indiana) and Columbia Energy Group
and the related notes incorporated by reference in this document. See "Where You
Can Find More Information" in the accompanying prospectus.
NISOURCE INC. (INDIANA) AND SUBSIDIARIES
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------
2000 1999 1998 1997
------------- -------- -------- --------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA
Operating revenues.................................. $3,880.8 $3,144.6 $2,932.8 $2,586.5
Operating income.................................... $ 490.3 $ 461.5 $ 421.5 $ 410.6
Net income from continuing operations............... $ 188.0 $ 160.4 $ 193.9 $ 190.8
CASH FLOW INFORMATION
EBITDA(a)........................................... $ 826.4 $ 772.9 $ 678.0 $ 660.4
Cash interest, net of amounts capitalized........... $ 190.4 $ 160.1 $ 118.1 $ 102.4
Capital expenditures................................ $ 313.0 $ 341.3 $ 245.8 $ 218.9
Cash flow from operations........................... $ 322.6 $ 453.0 $ 484.1 $ 434.6
</TABLE>
<TABLE>
<CAPTION>
AS OF
AS OF DECEMBER 31,
SEPTEMBER 30, -------------------
2000 1999 1998
------------- -------- --------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets......................................... $7,084.2 $6,835.2 $4,986.5
Short-term debt...................................... $ 838.0 $ 853.0 $ 417.8
Capitalization:
Long-term debt..................................... $1,737.3 $1,975.2 $1,668.0
Company-obligated mandatorily redeemable preferred
securities of subsidiary trust (PIES)........... 345.0 345.0 --
Preferred stock of subsidiaries.................... 135.8 139.6 142.0
Common shareholders equity......................... 1,352.1 1,353.5 1,149.7
-------- -------- --------
Total capitalization................................. $3,570.2 $3,813.3 $2,959.7
-------- -------- --------
</TABLE>
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(a) EBITDA is defined as operating income before depreciation and amortization
(excludes other income and income taxes). EBITDA is not a measure of
performance under GAAP. While EBITDA should not be considered as a
substitute for net income, cash flows from operating activities and other
income or cash flow statement data prepared in accordance with GAAP, or as a
measure of profitability or liquidity, management understands that EBITDA is
customarily used as a measure in evaluating companies.
S-5
<PAGE> 8
COLUMBIA ENERGY GROUP AND SUBSIDIARIES
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------
2000 1999 1998 1997
------------- -------- -------- --------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA
Operating revenues.................................. $2,636.4 $2,833.4 $2,563.1 $2,950.1
Operating income.................................... $ 706.0 $ 695.2 $ 590.6 $ 514.4
Net income from continuing operations............... $ 416.9 $ 387.8 $ 308.9 $ 276.3
CASH FLOW INFORMATION
EBITDA(a)........................................... $ 887.6 $ 897.9 $ 816.9 $ 730.7
Cash interest, net of amounts capitalized........... $ 162.3 $ 148.6 $ 147.0 $ 144.5
Capital expenditures................................ $ 483.6 $ 447.6 $ 434.7 $ 410.2
Cash flow from operations........................... $ 872.3 $ 536.7 $ 686.1 $ 486.8
</TABLE>
<TABLE>
<CAPTION>
AS OF
AS OF DECEMBER 31,
SEPTEMBER 30, -------------------
2000 1999 1998
------------- -------- --------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets......................................... $7,100.5 $7,037.3 $6,495.2
Short-term debt...................................... 54.1 465.5 144.7
Capitalization:
Long-term debt..................................... 1,639.2 1,639.3 2,002.8
Common stock equity................................ 2,034.3 2,064.0 2,005.3
-------- -------- --------
Total capitalization................................. $3,673.5 $3,703.3 $4,008.1
-------- -------- --------
</TABLE>
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(a) EBITDA is defined as operating income before depreciation and amortization
(excludes other income and income taxes). EBITDA is not a measure of
performance under GAAP. While EBITDA should not be considered as a
substitute for net income, cash flows from operating activities and other
income or cash flow statement data prepared in accordance with GAAP, or as a
measure of profitability or liquidity, management understands that EBITDA is
customarily used as a measure in evaluating companies.
S-6
<PAGE> 9
SELECTED UNAUDITED PRO FORMA COMBINED
FINANCIAL INFORMATION
We present below selected unaudited pro forma combined financial
information for NiSource and Columbia. The pro forma income statement data and
cash flow information give effect to the acquisition of Columbia as if it had
occurred at the beginning of the periods presented. The pro forma balance sheet
data give effect to the acquisition as if it occurred on September 30, 2000 and
also reflect the divestitures of Columbia's electric generation businesses,
which were announced after September 30, 2000. This information does not purport
to represent what the results of operations of NiSource would actually have been
had the merger occurred at October 1, 1999 or January 1, 1999 or to project
NiSource's results of operations for any future period or date. The data set
forth below should be read together with the pro forma financial statements of
NiSource and the separate historical financial statements and notes of NiSource
Inc. (incorporated in Indiana) and Columbia incorporated by reference into this
document. See "Where You Can Find More Information" in the accompanying
prospectus.
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
2000 1999
-------------- ------------
($ IN MILLIONS)
<S> <C> <C>
INCOME STATEMENT DATA
Operating revenues.......................................... $ 6,500.8 $5,945.5
Operating income............................................ $ 1,104.3 $1,057.3
Net income from continuing operations....................... $ 323.2 $ 261.9
CASH FLOW INFORMATION
EBITDA(a)................................................... $ 1,721.5 $1,670.1
Cash interest, net of amounts capitalized................... $ 660.4 $ 616.4
Capital expenditures........................................ $ 796.7 $ 815.9
Cash flow from operations................................... $ 1,012.4 $ 802.9
</TABLE>
<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30,
2000
-------------
($ IN MILLIONS)
<S> <C> <C>
BALANCE SHEET DATA
Total assets................................................ $17,844.3
Short-term debt............................................. $ 2,403.3
Capitalization:
Long-term debt............................................ $ 5,871.1
SAILS..................................................... 106.1
Company-obligated mandatorily redeemable preferred
securities of subsidiary trust (PIES).................. 345.0
Preferred stocks of subsidiaries.......................... 135.8
Common stockholders' equity............................... 3,114.2
---------
Total capitalization........................................ $ 9,572.2
=========
</TABLE>
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(a) EBITDA is defined as operating income before depreciation and amortization
(excludes other income and income taxes). EBITDA is not a measure of
performance under GAAP. While EBITDA should not be considered as a
substitute for net income, cash flows from operating activities and other
income or cash flow statement data prepared in accordance with GAAP, or as a
measure of profitability or liquidity, management understands that EBITDA is
customarily used as a measure in evaluating companies.
S-7
<PAGE> 10
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated November 30, 2000, we have agreed to sell to the underwriters
named below, for whom Credit Suisse First Boston Corporation and Merrill Lynch,
Pierce, Fenner & Smith Incorporated are acting as representatives, the following
respective numbers of shares of common stock:
<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------- ----------
<S> <C>
Credit Suisse First Boston Corporation...................... 7,370,940
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... 1,965,060
Robert W. Baird & Co. Incorporated.......................... 166,000
A.G. Edwards & Sons, Inc.................................... 166,000
Edward D. Jones & Co., L.P. ................................ 166,000
Stifel, Nicolaus & Company, Incorporated.................... 166,000
----------
Total.................................................. 10,000,000
==========
</TABLE>
The underwriting agreement provides that the underwriters are obligated to
purchase all the shares of common stock in the offering if any are purchased,
other than those shares covered by the over-allotment option described below.
The underwriting agreement also provides that if an underwriter defaults, the
purchase commitments of non-defaulting underwriters may be increased or the
offering may be terminated.
We have granted to the underwriters a 30-day option to purchase on a pro
rata basis up to 1,500,000 additional shares at the initial public offering
price less the underwriting discounts and commissions. The option may be
exercised only to cover any over-allotments of common stock.
The underwriters propose to offer the shares of common stock initially at
the public offering price on the cover page of this prospectus supplement and to
selling group members at that price less a concession of $0.49 per share. The
underwriters and selling group members may allow a discount of $0.10 per share
on sales to other broker/dealers. After the initial public offering, the public
offering price and concession and discount to broker/dealers may be changed by
the representatives.
The following table summarizes the compensation and estimated expenses we
will pay.
<TABLE>
<CAPTION>
PER SHARE TOTAL
-------------------------------- --------------------------------
WITHOUT WITH WITHOUT WITH
OVER-ALLOTMENT OVER-ALLOTMENT OVER-ALLOTMENT OVER-ALLOTMENT
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Underwriting Discounts and
Commissions paid by us............ $0.82 $0.82 $8,200,000 $9,430,000
Expenses payable by us.............. $0.007 $0.006 $ 65,000 $ 65,000
</TABLE>
We have agreed that we will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Securities and
Exchange Commission a registration statement under the Securities Act of 1933
relating to, any shares of our common stock or securities convertible into or
exchangeable or exercisable for any shares of our common stock, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of Credit Suisse First Boston
Corporation for a period of 90 days after the date of this prospectus
supplement, except issuances pursuant to the exercise of employee stock options
outstanding on the date hereof.
We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or contribute to payments which the underwriters may be required
to make in that respect.
We will apply to list the shares on The New York Stock Exchange.
In the ordinary course of business, certain of the underwriters and their
affiliates have provided financial advisory, investment banking and general
financing and banking services for us and our affiliates for customary fees.
Credit Suisse First Boston Corporation was the representative of the initial
purchasers in a private placement of $2.5 billion of senior notes of NiSource
Finance Corp. in November 2000 and
S-8
<PAGE> 11
was our financial advisor in the acquisition of Columbia Energy Group. Credit
Suisse First Boston, a Swiss bank and an affiliate of Credit Suisse First Boston
Corporation, is the administrative agent, co-syndication agent and a lender
under our $6 billion 364-day credit agreement. Credit Suisse First Boston is
also a co-lender on two $200 million 364-day credit agreements with each of
Northern Indiana Public Service Company and NiSource Capital Markets. Affiliates
of Merrill Lynch, Pierce, Fenner & Smith Incorporated have participated in the
financing of unregulated power projects developed through our subsidiary,
Primary Energy, Inc.
In connection with the offering the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934.
- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
- Over-allotment involves sales by the underwriters of shares in excess of
the number of shares the underwriters are obligated to purchase, which
creates a syndicate short position. The short position may be either a
covered short position or a naked short position. In a covered short
position, the number of shares over-allotted by the underwriters is not
greater than the number of shares which they may purchase in the
over-allotment option. In a naked short position, the number of shares
involved is greater than the number of shares in the over-allotment
option. The underwriters may close out any short position by either
exercising their over-allotment option and/or purchasing shares in the
open market.
- Syndicate covering transactions involve purchases of the common stock in
the open market after the distribution has been completed in order to
cover syndicate short positions. In determining the source of shares to
close out the short position, the underwriters will consider, among other
things, the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through the
over-allotment option. If the underwriters sell more shares than could be
covered by the over-allotment option, a naked short position, the
position can only be closed out by buying shares in the open market. A
naked short position is more likely to be created if the underwriters are
concerned that there could be downward pressure on the price of the
shares in the open market after pricing that could adversely affect
investors who purchase in the offering.
- Penalty bids permit the representatives to reclaim a selling concession
from a syndicate member when the common stock originally sold by the
syndicate member is purchased in a stabilizing or syndicate covering
transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of the common
stock or preventing or retarding a decline in the market price of our common
stock. As a result the price of the common stock may be higher than the price
that might otherwise exist in the open market. These transactions may be
effected on The New York Stock Exchange or otherwise and, if commenced, may be
discontinued at any time.
A prospectus and prospectus supplement in electronic format may be made
available on the websites maintained by one or more of the underwriters
participating in this offering. The representatives may agree to allocate a
number of shares to underwriters for sale to their online brokerage account
holders. Internet distributions will be allocated by the underwriters that will
make internet distributions on the same basis as other allocations. Credit
Suisse First Boston Corporation may effect an on-line distribution through its
affiliate, DLJdirect, Inc., an on-line broker dealer, as a selling group member.
S-9
<PAGE> 12
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the common stock in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of common stock are made. Any resale of the common stock in Canada must
be made under applicable securities laws which will vary depending on the
relevant jurisdiction, and which may require resales to be made under available
statutory exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers are advised to
seek legal advice prior to any resale of the common stock.
REPRESENTATIONS OF PURCHASERS
By purchasing common stock in Canada and accepting a purchase confirmation
a purchaser is representing to us and the dealer from whom the purchase
confirmation is received that
- the purchaser is entitled under applicable provincial securities laws to
purchase the common stock without the benefit of a prospectus qualified
under those securities laws,
- where required by law, that the purchaser is purchasing as principal and
not as agent, and
- the purchaser has reviewed the text above under "Resale Restrictions."
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of common stock to whom the Securities Act (British Columbia)
applies is advised that the purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
common stock acquired by the purchaser pursuant to this offering. The report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one report must
be filed for common stock acquired on the same date and under the same
prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of common stock should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the common
stock in their particular circumstances and about the eligibility of the common
stock for investment by the purchaser under relevant Canadian legislation.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for us by
Schiff Hardin & Waite, Chicago, Illinois. Peter V. Fazio, Jr., a partner of the
firm who also serves as general counsel of NiSource, holds approximately 11,400
shares of NiSource common stock. The underwriters have been represented by Dewey
Ballantine LLP, New York, New York.
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<PAGE> 13
EXPERTS
The financial statements incorporated by reference in this document have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
S-11
<PAGE> 14
[NISOURCE LOGO]
<TABLE>
<CAPTION>
GAS EXPLORATION GROWTH
TRANSMISSION AND ELECTRIC PRODUCTS AND
GAS DISTRIBUTION AND STORAGE PRODUCTION OPERATIONS SERVICES
<S> <C> <C> <C> <C>
o 3.2 million o 16,500 miles of o Based primarily o 426,000 o Primary Energy
customers in pipeline in 16 in Appalachia customers in (co-generation)
nine states states and Canada N. Indiana
o 51,700 miles of o 670 Bcf of o Proved gas o 3,382 MW of o Distributed
distribution underground gas reserves of 966 coal and gas- generation
pipeline storage Bcfe fired generation
o Energy USA-
TPC (energy
marketing)
</TABLE>
<PAGE> 15
[NISOURCE LOGO]
