Filed by: NiSource Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Columbia Energy Group
Registration Statement File No: 333-33896
On June 1, 2000, NiSource made a slide presentation to its
shareholders at the NiSource Annual Meeting of Shareholders. Copies
of the slides were also made available to NiSource shareholders at the
meeting. The text of the presentation is set forth below.
<PAGE>
TEXT OF SHAREHOLDER PRESENTATION
JUNE 1, 2000
[NISOURCE{TM} LOGO]
Delivering life's essential resources
To view the complete video presentation
as presented on June 1, 2000, visit our Web site
beginning June 5 at www.nisource.com
DELIVERING LIFE'S ESSENTIAL RESOURCES
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Creating a new company . . .
creating the future.
Creating a strong
platform for growth.
[Photos of NiSource
employees at work]
[NiSource Logo]
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BUILDING FOR TOMORROW . . .
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* BROAD PLATFORM TO MAXIMIZE OPPORTUNITIES
- 4.1 million customers
- gas distribution in 9 states
- pipeline operations in 16 states
<TABLE>
<CAPTION>
<S> <C> <C>
UPSTREAM - - - - - - - - - - - - - -COMMODITY DISTRIBUTION - - - - - - - - -DOWNSTREAM
*19,000 Miles of Pipeline *Regulated Utilities *Cogeneration
*700 Bcf of Gas Storage *Customer Growth *Distributed Generation
*Marketing Services *Low Risk *Energy-Related Products
*Gas Optionality *Good Returns *Commodity Conversion
*Electric Optionality
</TABLE>
[NiSource Logo]
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1ST QUARTER 2000
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* Basic earnings per share = 64 cents, a 3.2% increase from 1st
quarter '99
* 1st quarter earnings improved despite 15% warmer than normal and
11% warmer than same period in '99
* Gas operations EBIT increased $10.4 million to $98.9 million
* Electric operations EBIT increased $9.1 million to $82.7 million
* Water operation EBIT increased $1.5 million to $3.7 million
* Gas marketing and storage EBIT increased $8.8 million to $9.7
million
[NiSource Logo]
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CREATING VALUE . . . WITH LOWER RISK AND HIGHER RETURNS
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* Regulated businesses
- positive regulatory relationships
- aggressive cost efficiencies
- pursue incentive opportunities
* Related diversification
- leverage existing asset base into knowledge-based businesses
with high returns
- integrate existing businesses into growth markets
* Creating new business opportunities in growth markets
- asset optionality
- distributed generation
* Maintain strong financial profile, solid investment grade ratings
[NiSource Logo]
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THE PREMIER COMPETITOR . . .
----------------------------
[GRAPHIC - MAP OF EASTERN UNITED STATES
DEPICTING SERVICE TERRITORIES OF NISOURCE
COMPANIES]
[NiSource Logo]
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THE PREMIER COMPETITOR . . .
----------------------------
[GRAPHIC - MAP OF EASTERN UNITED STATES
DEPICTING SERVICE TERRITORIES OF
NISOURCE COMPANIES AND COLUMBIA
COMPANIES]
[NiSource Logo]
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THE RIGHT ASSETS MAKE THE DIFFERENCE
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[GRAPHIC - CHART DEPICTING PROJECTED NET
INCOME FROM DISTRIBUTED GENERATION,
ELECTRIC OPTIONALITY, GAS
OPTIONALITY AND BASE BUSINESS
FOR THE YEARS 2001-2005]
15% CAGR
[NiSource Logo]
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REALIZABLE SYNERGIES
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(Dollars in Millions) 2001 2002 2003 2004 2005
---- ---- ---- ---- ----
Distribution
Revenue $1.5 $7.7 $11.5 $15.8 $18.1
Cost 15.3 19.1 22.6 27.8 29.5
Transmission
Cost 8.7 13.9 15.3 17.3 17.8
Corporate 72.1 100.6 106.5 112.7 119.6
Total Synergies $97.6 $141.3 $155.9 $173.6 $185.0
Expect to Realize Incremental Savings
[NiSource Logo]
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<TABLE>
<CAPTION>
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APPROVAL TIMETABLE -- ON TRACK PRIOR TO YEAR-END CLOSE
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year 2000 Mar Apr May Jun Jul Aug Sep 4th Qtr
--------- ----- ----- ----- ----- ----- ----- ----- -------
Shareholder Proxy NiSource 6/1
Approval Filed Special
4/21 Mtg.
C/G 6/2
State Filings PA VA Filed 4/3 KY
Proceedings Filed ME Filed 4/10 Filing Approve
3/30 NH Filed 4/12 5/1
FERC Filed
4/10
Hart-Scott Filing Approve
Rodino
SEC 1935 Act Approve
Filed
4/14
</TABLE>
[NiSource Logo]
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SOURCES AND USES
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Sources $MM % Uses $MM
------- --- --- ----- ---
Debt Financing $3,118 52% Purchase Price
($72.07/Share) $5,966
SAILS{SM} 102 2% Transaction Costs 98
Asset Sales/Cash Total Uses $6,063
on Hand $1,023 16%
Common Equity 1,820 30%
Total Sources $6,063 100%
Assumes 30% Stock Election
[NiSource Logo]
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NATURAL GAS DISTRIBUTION
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[GRAPHIC - MAP OF EASTERN UNITED STATES
DEPICTING NIPSCO SERVICE TERRITORY]
[NiSource Logo]
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NATURAL GAS DISTRIBUTION
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[GRAPHIC - MAP OF EASTERN UNITED STATES
DEPICTING LOGOS AND SERVICE TERRITORIES
OF NIPSCO, NORTHERN UTILITIES AND
BAY STATE GAS]
[NiSource Logo]
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NATURAL GAS DISTRIBUTION
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[GRAPHIC - MAP OF EASTERN UNITED STATES
DEPICTING LOGOS AND NATURAL GAS
DISTRIBUTION SERVICE TERRITORIES OF
NIPSCO, NORTHERN UTILITIES, BAY STATE
GAS AND COLUMBIA]
[NiSource Logo]
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MILLENNIUM/CROSSROADS
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[GRAPHIC - MAP OF EASTERN UNITED STATES
DEPICTING MILLENNIUM AND CROSSROADS
PIPELINES]
[NiSource Logo]
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SUPPLY DRIVEN GROWTH IN GULF
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[GRAPHIC - MAP OF EASTERN UNITED STATES
DEPICTING, SUNSTAR/EAST LATERAL EXPANSION
AND TARGET SUPPLY AREAS: WESTERN GARDEN
BANKS, GREEN CANYON, MISSISSIPPI CANYON]
SunStar
* deepwater/liquids play
* partnership with major producer
* phased project-up to 600 Mdth/d
* timeframe: late 2001, early 2002
[NiSource Logo]
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GROWTH IN OHIO VALLEY AND STORAGE
CREATE SYNERGIES IN NEW NISOURCE
---------------------------------
[GRAPHIC - MAP OF EASTERN UNITED STATES
DEPICTING PIPELINES, DISTRIBUTION SERVICE
TERRITORY, PEAKING PLANTS AND STORAGE
FACILITIES]
[NiSource Logo]
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ELECTRIC STRATEGY
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[GRAPHIC - MAP OF EASTERN UNITED STATES
DEPICTING ELECTRIC SERVICE TERRITORIES] Locational
Edges
[NiSource Logo]
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OPTIONALITY
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[GRAPHIC DEPICTING OPTIONALITY RESULTING
FROM INTERPLAY OF NATURAL GAS SUPPLY,
MARKET AREA STORAGE AND COGENERATION]
[NiSource Logo]
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GAS - NATURALLY FUELING THE FUTURE
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Fuel Cell
[Picture of Worker and Fuel
Cell]
[Picture of micro turbine on
roof of Walgreens store]
Natural Gas Microtrubine
Combined Heat and Power
[NiSource Logo]
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ONE HOME, ONE ENERGY SOURCE
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[Graphic of House]
[NiSource Logo]
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ONE HOME, ONE ENERGY SOURCE
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[Graphic of House]
[NiSource Logo]
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DON'T BE LEFT IN THE DARK
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[Picture of lightning striking in background of city skyline]
[NiSource Logo]
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GAS - NATURALLY
FUELING THE FUTURE
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* Electricity and thermal
energy for heating, air
conditioning and hot water [Picture of microturbine]
* Around-the-clock operation,
uninterruptible power supply The first microturbine
installed has run without
* Energy efficiency equivalent interruption for nearly a
to cogeneration systems, year with a reduction in
twice that of conventional energy costs of 10%
generation
[NiSource Logo]
DELIVERING LIFE'S ESSENTIAL RESOURCES
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BRICKS AND MORTAR
STRATEGY AND
STRUCTURE
[IMAGE OF BRICKLAYING]
[NiSource Logo]
DELIVERING LIFE'S ESSENTIAL RESOURCES
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The Premier Competitor . . .
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[GRAPHIC - MAP OF EASTERN UNITED STATES
DEPICTING ASSETS AND SERVICE TERRITORIES
OF NISOURCE AND COLUMBIA]
[NiSource Logo]
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THE "COMPASS" TEAM
* EMPLOYEES WILL KNOW THEIR NEW JOB RESPONSIBILITIES, WHOM
THEY REPORT TO AND THE ROLE THEY WILL PLAY IN ACHIEVING THE
COMPANY'S STRATEGIC GOALS
* MISSION WILL FOCUS ON:
- reducing costs and delivering value to the bottom line
- positioning and building organization of the future
- supporting initial steps in a process of cultural
change
* THREE PHASES OF PROJECT
- opportunity identification
- conceptual design
- detailed design
[Compass Logo]
Possibility Reach Reality Choice
New Direction
DELIVERING LIFE'S ESSENTIAL RESOURCES
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BUILDING SHAREHOLDER VALUE
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SHAREHOLDER VALUE
Maximize Focused Environmental
Utilization Strategic Stewardship
of Assets Investments
Employee Customer Manage Expenses/
Effectiveness Driven Margins Technology
F I N A N C I A L S T R E N G T H
[NiSource Logo]
[NISOURCE{TM} LOGO]
Delivering life's essential resources
This presentation contains certain forward-looking statements within
the meaning of the federal securities laws; these forward-looking
statements are subject to various risks and uncertainties. The
factors that could cause actual results to differ materially from the
projections, forecasts, estimates and expectations discussed herein
may include factors that are beyond the companies' ability to control
or estimate precisely, such as estimates of future market conditions,
the behavior of other market participants and the actions of the
federal and state regulators. Other factors include, but are not
limited to, actions in the financial markets, weather conditions,
economic conditions in the two companies' service territories,
fluctuations in energy-related commodity prices, conversion activity,
other marketing efforts and other uncertainties. Other risk factors
are detailed from time to time in the two companies' SEC reports.
Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date of this
presentation. The companies do not undertake any obligation to
publicly release any revisions to these forward-looking statements to
reflect events or circumstances after the date of this presentation.
In addition to other documents filed with the Securities and Exchange
Commission by the two companies, NiSource and the new holding company
have filed a registration statement, which contains a joint proxy
statement/prospectus for NiSource and Columbia Energy Group. The
final joint proxy statement/prospectus, dated April 24, 2000, is
available and has been distributed to the companies' shareholders.
Investors and security holders are urged to read the joint proxy
statement/prospectus and any other relevant documents filed with the
SEC when they become available because they will contain important
information. Investors and security holders can receive the joint
proxy statement/prospectus and other documents free of charge at the
SEC's Web site, www.sec.gov, from NiSource Investor Relations at 801
East 86th Avenue, Merrillville, Indiana 46410 or at its Web site,
www.nisource.com, or from Columbia Investor Relations at 13880 Dulles
Corner Lane, Herndon, Virginia 20171 or at its Web site,
www.columbiaenergygroup.com.
