EXHIBIT 99
----------
NISOURCE
INFORMATION PRESENTED TO POTENTIAL INVESTORS
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.
======================================================================
______________________________________________________________________
INTRODUCTION
______________________________________________________________________
======================================================================
PREMIER COMPETITOR IN OUR ENERGY CORRIDOR
----------------------------------------------------------------------
* Strategic location [GRAPHIC OF ENERGY
- 30% population / 40% of CORRIDOR]
U.S. energy consumption
- Columbia Energy acquisition
significantly advances the vision
* Second largest gas distribution company
- 3.2 million customers - 9 states
* Fourth largest gas pipeline company
- 16,500 miles interstate pipelines
* Second largest gas storage network
- 670 Bcf (market area)
* Superior skill set
- Full range of energy delivery
capabilities
- Customer focused (not commodity)
- Experienced management - best of
both worlds
======================================================================
CREDIT HIGHLIGHTS
----------------------------------------------------------------------
Premier Energy Company * Critical mass of low risk / high
quality gas assets
* Strategic location in the fast
growing Energy Corridor
* Superior set of skills ranging
across the full energy value chain
Low-Risk Strategy * 90%+ of cash flow derived from
regulated businesses
* Functionally-integrated and
diversified business mix with
super-regional concentration
* Focused on growth of gas
distribution and transmission
assets
* Distributed generation increases
gas utilization and delivers energy
to customers with minimal capital
at risk
- Trading within boundaries of
asset footprint (only
physical)
- Numerous inside the fence
opportunities
Improving Credit Profile * Stable cash flow growth drives
improving credit story
* Capital program 100% funded by
internal cash flow
* Significant debt reduction with
excess cash flow
* Management committed to strong
balance sheet quality and
maintaining credit ratings
* Conversion of PIES and SAILS
improves equity capitalization
======================================================================
______________________________________________________________________
COLUMBIA ACQUISITION
______________________________________________________________________
======================================================================
A TRUE MERGER IN THE END
----------------------------------------------------------------------
* Announced definitive agreement on February 28, 2000 and closed
transaction on November 1st
- 8 months from signing to closing
* $5.9 BN equity purchase price plus assumption of $2.0 BN debt
* 30% stock election ($1.8 BN)
- 74 / share
- 77% of Columbia holders elected stock prorated to 30%
* 70% cash / SAILS{SM} ($4.1 BN)
- Asset Sales up to $1.3 BN
- $0.1 BN SAILS{SM}
- Long-term / short-term debt raised to fund remaining cash
requirements
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
| |
| Fastest Ever Approval for PUHCA Registered Deal |
|_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _|
======================================================================
TRANSACTION WELL RECEIVED BY THE STOCK MARKET
----------------------------------------------------------------------
[LINE GRAPH OF STOCK PRICES FOR TIME SPAN BETWEEN 2/28/2000 - 11/1/2000]
======================================================================
MANAGEMENT TEAM -- BEST OF BOTH WORLDS
----------------------------------------------------------------------
<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)*
****************** ********************* ******************** ******************* ******************* ********************
*Gas and electric *Gas transmission *Gas supply and *Industrial power *Distributed *Administrative and
distribution *Telecom storage generation generation shared services
*E&P *E-commerce
*Electric
generation
*Wholesale energy
trading
</TABLE>
=========================================================================
NON-CORE ASSET SALES REDUCE DEBT AND BUSINESS RISK
----------------------------------------------------------------------
PRE-TAX AFTER-TAX
PROCEEDS ($MM) PROCEEDS ($MM) TIMING
-------------- -------------- ------
Sales Completed(1) $444 $365 Completed
Definitive Agreements:
Columbia Electric/QFs $323(2) 226 Q4 2000
Miller Pipeline 68 50 Q4 2000
------------
Subtotal 835 641
Sales in Progress (3) Up to $635 Up to $710(4) Q4 2000 -
============ ============ Q1 2001
Total Up to $1,470 Up to $1,351
------------ ------------
(1) Includes sale of MHP, Columbia LNG and Columbia Retail
(2) Includes repayment of $51 MM capital invested by Columbia after
September 30, 2000
(3) Sales in progress includes Columbia Propane, Columbia Petroleum,
IWCR, and other unregulated businesses
(4) Includes tax benefits from sale of certain businesses sold at a
loss (for tax purposes)
======================================================================
______________________________________________________________________
NISOURCE OVERVIEW
______________________________________________________________________
======================================================================
THE NEW NISOURCE PORTFOLIO
----------------------------------------------------------------------
<TABLE>
<CAPTION>
NISOURCE
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GAS OTHER
GAS TRANSMISSION ELECTRIC EXPLORATION PRODUCTS &
DISTRIBUTION AND STORAGE OPERATIONS & PRODUCTION SERVICES
------------- ----------- ---------- ------------ --------
* 3.2 million * Over 16,500 miles * 426,000 customers * Based in * Primary Energy
customers in nine of pipeline in 16 in northern Appalachia and (co-generation)
states states and D.C. Indiana Canada * Energy USA-TPC
* 51,700 miles of * One of the * 3,179 MW of coal- * Proved gas (energy mar-
distribution largest under- fired and 203 MW reserves of 966 keting)
pipeline ground natural of gas fired Bcfe (161 BOE) * Telecommunica-
* Unbundling pro- gas storage net- generation * Low finding costs tions (260 miles
grams initiated works (670 bcf) * Interconnected * Own and operates of dark fiber)
in most states with five neigh- 8,188 wells
boring utilities * 6,069 miles of
gathering facili-
ties
</TABLE>
Note: Excludes assets to be divested.
======================================================================
NATURAL GAS FOCUS ON DIVERSIFIED REGULATED BUSINESSES
----------------------------------------------------------------------
NISOURCE PRO FORMA LTM EBITDA (1)(2)(3)(4)
---------------------------------------------
[GRAPHIC -- PIE CHART]
Gas Distribution 32%
Electric Operations 32%
Gas Transmission 27%
E&P 6%
Other Products & Services 3%
$1,672 MM
---------
(1) Twelve months ended September 30, 2000
(2) Reflects completion of $1.3 BN non-core asset sale program
(3) Does not include expected synergies of $100 MM
(4) Excludes corporate overhead of $73 MM
======================================================================
CONSERVATIVE CAPITAL PROGRAM FUNDED WITH INTERNAL CASH FLOW
----------------------------------------------------------------------
2001E CAPITAL EXPENDITURES (1)(2)
---------------------------------
[GRAPHIC -- PIE CHART]
Gas Distribution 36%
Electric Operations 19%
Gas Transmission 21%
E&P 21%
Other Products & Services 3%
$615 MM
---------
(1) Reflects completion of $1.3 BN non-core asset sale program
(2) Excludes $36 MM in merger-related capitalized costs
======================================================================
GAS DISTRIBUTION
----------------------------------------------------------------------
[MAP OF COLUMBIA GAS * Significant scale
SERVICE TERRITORY AND - Largest gas company east of the Rockies
NISOURCE GAS SERVICE with over 3.2 million customers located
TERRITORY] in nine states
- Vertical integration with major
pipeline and storage system and local
commodity supply
* Diversification
- Mitigates weather risk
- Nine different regulatory regimes
* Favorable regulatory environment
- Choice is available in all service
territories
- Deregulation settlements achieved in
OH, PA, IN
- Progressive regulators in IN, PA,
OH, KY
- No active rate proceedings
* Strong regulatory and political
relationships
- Rapid transaction approval process
- No onerous approval conditions
======================================================================
GAS TRANSMISSION AND STORAGE
----------------------------------------------------------------------
[MAP OF COLUMBIA * Over 16,500 miles of interstate pipeline
STORAGE FACILITIES, * One of the largest integrated systems in
COLUMBIA PIPELINES, U.S.
DOMINION PIPELINES AND * Capacity almost fully contracted until
EL PASO PIPELINES] 2004
- Majority of capacity sold to LDC
affiliates
- Columbia Gulf supplies Columbia gas
network
* Serve attractive Mid-Atlantic and
Northeast gas markets which have
significant planned gas-fired generation
additions
- Cost structure is competitive versus
other pipeline systems in the
Mid-Atlantic region
* Unique web-like network is integrated with
one of the largest U.S. underground
storage systems
- Provide customers with significant
supply flexibility
======================================================================
INTEGRATED ELECTRIC UTILITY
----------------------------------------------------------------------
[MAP OF INDIANA * Vertically integrated regulated utility
SHOWING ELECTRIC - Utilize Primary Energy to reduce
SERVICE TERRITORIES -- exposure to higher-risk industrial
INDIANA MICHIGAN POWER customers
CO., INDIANAPOLIS - Industrial customers contributed less
POWER & LIGHT CO., than 15% of the electric LTM gross
NORTHERN INDIANA margin
PUBLIC SERVICE CO., * Attractive generation portfolio would
PSI ENERGY, INC. AND yield premium in divestiture
SOUTHERN INDIANA GAS & - No nuclear exposure, adequate reserve
ELECTRIC CO.] margin
* Indiana is supportive of utilities
- No rate case since 1988; periodic
four-year review process
- Fair value rate base concept (one of two
states)
- Measured approach toward deregulation
* Actively managing environmental risk
- Over-fire program and SCR investment
plan to comply with SIP - Call
- Similar strategy to other ECAR
generators
======================================================================
EXPLORATION AND PRODUCTION
----------------------------------------------------------------------
[MAP OPERATION * Long-lived Appalachian reserves combined
HEADQUARTERS, REGIONAL with low risk drilling program
OFFICES, UNITED STATES - 85% historical success rate: low finding
OPERATING REGION AND costs
CANADIAN JOINT - Mostly development drilling
VENTURES] * Technical expertise due to historical
focus on the area
* Balanced, diverse portfolio (over 8,100
wells) and own gas gathering infra-
structure
* Well-managed commodity risk
- Hedged 83% of the estimated gas
production for the 2000-2001 winter
heating season
- Strategy of hedging 80% production of
the first 6 months forward and 40% of
the next six months (6-12) of production
- Internally funded capex program
======================================================================
OTHER PRODUCTS AND SERVICES
----------------------------------------------------------------------
* Currently represent approximately 3% of LTM pro forma EBITDA and
3% of planned capital expenditures in 2001
* Primary Energy operates pursuant to long-term contracts with its
customers and is utilized to mitigate industrial customer
exposure at the electric utility
* Telecom is a relatively small, low-risk dark fiber business
- $100 MM invested by year end 2000
- DC-NY route in current budget no system buildout currently
anticipated
- Evaluating strategic options related to the business
* Energy USA provides products and services to utility and
surrounding customers
======================================================================
______________________________________________________________________
FINANCIAL PROFILE
______________________________________________________________________
======================================================================
FINANCING PLAN: 54% EQUITY RELATED
----------------------------------------------------------------------
<TABLE>
<CAPTION>
As of November 1st, 2000
------------------------
$MM $MM $
--- --- -
<S> <C> <C> <C> <C>
Sources Sources
Commercial Paper $4,145 Debt $2,794 46%
SAILS{SM}(1) 106 SAILS{SM} 106 2%
Common Equity / Asset Sales 2,127 Common Equity / Asset Sales 3,113 52%
------ ------ ----
Total $6,378 Total $6,013 100%
Uses Uses
Purchase Consideration Purchase Consideration
Cash $3,888 Cash $3,888
Stock / SAILS{SM} 1,868 Stock / SAILS{SM} 1,868
Transaction and Other Costs 257 Transaction and Other Costs 257
Debt Repayment 365
------ ------
Total $6,378 Total $6,013
(1) Assumes fair market value of $1.90 per share
</TABLE>
======================================================================
PRO FORMA CAPITALIZATION
----------------------------------------------------------------------
As of September 30th, 2000
------------------------------------------------------
NISOURCE COLUMBIA PROFORMA
-------- -------- --------
Cash 51.0 30.3 81.3
CAPITALIZATION:
Debt 2,575.3 2,004.4 7,294.3(1)
Preferred Stock 135.8 - 133.3
Equity-Linked Securities(2) 345.0 - 451.1
Shareholder Equity 1,352.1 2,034.3 3,134.2(3)
Total Capitalization 4,408.2 4,038.7 11,012.9
RATIOS:
Debt 66.2%
Preferred Stock 1.2%
Equity/Equity-Linked 32.6%
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 is assumed by the buyer
(2) Includes PIES and SAILS (mandatory convertible equity securities)
(3) Assume after-tax gain of approximately $20 MM from remaining
asset sales
======================================================================
PRO FORMA FLOW PROFILE
----------------------------------------------------------------------
Twelve Months Ending September 30, 2000
---------------------------------------------------
LTM ADJUSTED
PRO FORM
NISOURCE COLUMBIA (1)(2)
-------- -------- --------
INCOME/CASH FLOW ITEMS:
EBITDA $826.4 $887.6 $1,771.7
Adj. EBIT(3) 490.3 706.0 1,279.0
FFO(4) 572.0 586.9(5) 1,007.4
Cash Interest(6) 190.4 162.3 588.0
Capital Expenditure 313.0 483.6 727.6
COVERAGE RATIOS:(7)
FFO Interest Coverage 2.71x
Adj. EBIT/Interest 2.18x
Debt/EBITDA 4.12x
(EBITDA - Capex)/Interest 1.78x
(1) Includes $100 MM of expected synergies
(2) Assumes removal of cash flow from expected asset sales
(3) Adjusted EBIT excludes approximately $99 MM of goodwill and asset
write-up associated with the Columbia acquisition
(4) Funds from Operations (FFO) is equivalent to net income plus D&A,
deferred taxes and preferred dividends
(5) Columbia FFO excludes the $59 MM gain on sale of the LNG business
(6) Cash interest excludes non-cash interest from gas prepays and
imputed interest on the SAILS
(7) All coverage ratios utilize cash interest as the denominator
======================================================================
SOURCES OF POTENTIAL CREDIT IMPROVEMENT
----------------------------------------------------------------------
* Operating cash flow growth
- Realization of significant cost savings: $100 MM per annum
- Customer growth at distribution and electric utility
businesses
- Continued cost discipline at the distribution and pipeline
businesses
- Millennium pipeline expansion project
* Stable capital program
- Capex remains essentially flat to 2001 levels: approximately
$650 MM
- Buildout distribution systems, facility maintenance and E&P
drilling program
- Completely internally funded
* Significant debt reduction
- Free cash flow applied to debt repayment: averages $250 MM
per annum
- Additional asset sales / equity issuance planned to be
completed by 2001
- Cash flow from contractual conversion of PIES and SAILS
(~$500 MM)
======================================================================
______________________________________________________________________
CONCLUSIONS
______________________________________________________________________
======================================================================
GAS STRATEGIC POSITIONING
----------------------------------------------------------------------
[GRAPHIC OF MAJOR ENERGY COMPANIES DEPICTING RELATIONSHIP BETWEEN
COMPANIES' EXISTING ASSET BASE TO STRATEGIC DIRECTION]
======================================================================
MANAGEMENT COMMITMENT TO CREDIT QUALITY
----------------------------------------------------------------------
* Strong underlying cash flow, steady growth
* Focus on future growth in regulated gas delivery business
* Free cash flow applied to the repayment of debt
* Asset sales remove non-core, riskier businesses
* Significant synergies and efficiency improvements
* Modest anticipated near and medium-term capital expenditures
* SEC capital structure requirements limits future leverage-related
event risk
* Possible additional asset sales / balance sheet improvement
======================================================================
