EXHIBIT 99
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NISOURCE
February, 2002
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PREMIER COMPETITOR
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* Strategic Location
- 30% Population/40% of U.S.
Energy Consumption
* Third Largest Gas Distribution Company
in the U.S.
- 3.2 million Customers - 9 States
* Fourth Largest Gas Pipeline
Company in the U.S. [MAP OF EASTERN UNITED STATES
- 16,500 miles Interstate Pipelines DEPICTING ENERGY CORRIDOR]
* Second Largest Gas Storage Network
in the U.S.
- 670 Bcf (Market Area)
* 90% EBIT From Regulated Operations
[NiSource logo]
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COLUMBIA ACQUISITION
FIRST YEAR KEY MILESTONES
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* Reached Goal of Selling $1.4 Billion of Non-Core Assets
* Achieved Merger Savings of $100 Million Dollars a Year for
2001 and Beyond
* Consolidated Back Office Activities and Centralized Gas Supply
* Implemented Best Practices and Drove Out Costs and Redundancies -
Continuing into 2002
* Reduced Staffing Levels by 27% or 4,000 Employees
[NiSource logo]
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A DIVERSIFIED BUSINESS PROFILE
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[Graphs depicting EBIT]
NiSource Pre-Merger NiSource Post-Merger
1999 EBIT(1) 2002E EBIT(1)
----------------------------- ------------------------------
Electric Operations 70% E&P 5%
Gas Distribution 25% Electric Operations 23%
Other 5% Gas Distribution 38%
Gas Transmission 30%
Merchant 4%
(1) Excludes corporate overhead.
[NiSource logo]
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THE NISOURCE PORTFOLIO
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GAS ELECTRIC MERCHANT OTHER
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GAS DISTRIBUTION ELECTRIC DISTRIBUTION GAS & POWER TRADING OTHER OPERATIONS
* 3.2 million Customers in * 430,000 Customers in * NiSource Energy Technologies
Nine States Northern Indiana WHOLESALE POWER SALES (distributed generation)
* 54,000 Miles of Distribution * Fiber Optic Network
Pipeline PRIMARY ENERGY
* Customer Choice in Most
States * Cogeneration
TRANSMISSION & STORAGE GENERATION
* Over 16,500 Miles of Pipeline * 3,179 MW of Coal-Fired
in 16 Jurisdictions and 203 MW of Gas
* One of the Largest Underground Fired Generation
Natural Gas Storage Networks
(670 Bcf)
EXPLORATION & PRODUCTION
* Based in Appalachia and
Canada
* Proved Gas Reserves of
1.1Tcf
* Over 8,000 Wells
* Over 6,000 Miles of
Gathering Facilities
[NiSource logo]
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FOCUSING ON DOMESTIC UTILITY BUSINESS
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* Solid Core Businesses / Strong Asset Base
- Gas/Electric Distribution
- Pipeline/Storage
- Exploration/Production
* Strategically Located
- Third Largest Gas Distribution Company in U.S.
- Pipeline and Electric Crossroads of Midwest
- Multi-Market Gas Storage/Marketing
* Clean Electric Capacity
- No Nuclear Capacity
* Substantial Cash Flow
[NiSource logo]
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CORPORATE FOCUS
Focusing on Shareholder Value
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* Shareholder Returns in Top 10%
- Earnings / Dividend Growth
* Strengthen Balance Sheet
- Reduce Leverage
- Improve Liquidity
* Improve Performance of Core Businesses
- Reduce Costs
- Increase Productivity / Efficiencies
[NiSource logo]
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CAPITAL FOR FUTURE GROWTH
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2002E Capital Expenditures
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$667 MM
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[Graph depicting $274 MM Growth Capex
Capital Expenditures] --------------------
E&P 14% * 32% Gas Distribution
Electric Operations 31% * 24% Gas Transmission
Gas Transmission 21% * 33% E&P
Gas Distribution 28% * 7% Electric
Merchant 1% * 4% Other
Other 5%
[NiSource logo]
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2001 FINANCIAL REVIEW
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* Milder Winter Weather
* Weaker Sales Related to Economy
- Industrial and Manufacturing Sectors
* Weaker Business Sector Performance
- Merchant Operations
- E&P
* One-Time Adjustments
- Restructuring Charges
- Fiber Optic Operations / Impairment
- Interest Due to Delayed Asset Sales
- Uncollectible Accounts
- Market Hub Partners Settlement
- Transition and One-Time Costs
[NiSource logo]
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ANNUAL EARNINGS PER SHARE
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[Graph depicting NiSource annual earnings per share]
YEAR DIVIDEND
---- --------
1997 $1.54
1998 $1.60
1999 $1.29
2000 $1.12
2001 $1.05
The Year-to-Year Earnings are Not Comparable Due to the Acquisition
of Columbia Energy Group on November 1, 2000.
*Includes Adjustment Items of $0.77 and $0.64 for 2000 and 2001
respectively.
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DIVIDEND GROWTH
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[Graph depicting Dividend Growth for years 1998-2002]
YEAR DIVIDEND
---- --------
1998 $0.96
1999 $1.02
2000 $1.08
2001 $1.16
2002 $1.16
(Indicated)
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STOCK INVESTMENT HISTORY
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[Graph comparing NiSource Stock Price and the Dow Jones Utilities
Average for the years 1990 - 2002 (first quarter)]
[NiSource logo]
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2002 EARNINGS GUIDANCE
$2.15 - $2.20
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Earnings Guidance Assumes Normal Weather and the Following:
* Little Growth Resulting from Continued U.S. Economic Downturn
- Industrial / Manufacturing Customers
- Merchant Energy Markets
* Reasonable Negotiated Settlement in Indiana Electric Rate
Investigation
* 50 Cents Per Share for Elimination of Goodwill
* Modest Increase in E&P Production Volumes - Offset by Lower
Gas Prices
* Additional 2002 Integration Synergies Partially Offset by
Increased Pension Costs and Property Insurance
[NiSource logo]
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GAS BUSINESS FOCUS
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* Grow Gas Business
- Distribution
- Transmission/Storage
- Exploration & Production
[NiSource logo]
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GAS INDUSTRY
COMPELLING FUNDAMENTALS
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Growth Driven by New Natural Gas Demand
* Demand for Natural Gas to
Increase to Approximately
30 Tcf by 2010
[Bar chart depicting natural gas
demand for 1998, 2005 and 2010] * 25% Demand Growth Through
2010 (2.1% annual Growth
Rate in Electricity)
* Natural Gas Becomes
the Clean Burning Fuel
for Electric Generation
1998 2005 2010
---- ---- ----
All other uses 13 Tcf 17 Tcf 22 Tcf
Electricity Generation 3 4 7
--- --- ---
Total 16 Tcf 21 Tcf 29 Tcf
Source: Natural Petroleum Council
[NiSource logo]
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GAS MARKET OPPORTUNITIES
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* Utilize Strategic Crossroads Position in
the Midwest to New England Regions
- Pipeline Interconnects
* The Gulf Coast/Midwest/Northeast Gas Markets
- Expand Pipeline Interconnects
- Establish Strong Market Presence
- Build Customer Base
* Utilize Our Combined Assets In a Region with
Significant Market Opportunities
[NiSource logo]
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GAS DISTRIBUTION
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* Located in a Growing Energy
Corridor
* Diversification of Customers
and State Regulation
[Map of Columbia and NiSource Gas
Service Territories] * Favorable Overall Regulatory
Environment
- Customer Choice
- Incentive Opportunities
* Vertical Integration with
Pipeline and E&P
[NiSource logo]
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GAS TRANSMISSION AND STORAGE
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* Positioned to Fuel New Power
Generation Facilities
[Map of Storage * Competitive Cost Structure Versus
Facilities and Pipelines] Other Pipeline Systems in the
Mid-Atlantic Region
* Unique Web-like Network Benefits
from Integrated Storage and Access
to Supply
* Millennium Pipeline Project to
Supply Gas to Northeastern and
Mid-Atlantic Markets
[NiSource logo]
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EXPLORATION AND PRODUCTION
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* Long-lived Appalachian
Reserves
* 8,000 Wells Including a
[Map of Operation Headquarters, Gas Gathering System
Regional Offices, U.S. Operating
Regions and Canadian Joint * Strategically Located Near
Ventures] Expanding Markets
* NiSource E&P Produced 54 Bcf
in 2001
[NiSource logo]
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STRATEGICALLY POSITIONED ASSETS
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[Map of Eastern United States depicting NiSource assets]
[NiSource logo]
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ELECTRIC BUSINESS FOCUS
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* Maximize Generation Asset Value
- Lower Fuel/Production Costs
- Increase Unit Availability
* Market Generation to Higher Margins
- Retail Customer Growth
- Midwest Wholesale Markets
[NiSource logo]
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INTEGRATED ELECTRIC UTILITY
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* Vertically Integrated Utility
- 430,000 Regulated Electric
Customers
[Map showing * 3,400 MW Generation Portfolio
NIPSCO in Indiana] - Could Yield Premium if Divested
* Strong Environmental Program
- NiSource Added to Dow Jones
Sustainability World Index
* Electric Rate Investigation
- Resolution Expected Feb., 2002
[NiSource logo]
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STRATEGICALLY LOCATED
IN MIDWEST MARKETS
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* Competitive Portfolio of
Electric Generation
[Map showing proximity to * Gateway Interconnect with Five
Michigan Market Surrounding Control Areas
Com Ed Hub and - Net Long Asset Position
Cinergy Hub] - Sell Excess Energy Into
Midwestern Markets
[NiSource logo]
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ELECTRIC MARKET OPPORTUNITIES
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* Partner with Customers
- Installed Cogeneration
- Retain/Grow Business
* Market Power in Midwest
* Utilize Gas Technologies for
Electric Generation
- Cogeneration and Microturbines (CHP)
[NiSource logo]
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MERCHANT BUSINESS FOCUS
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* Expand Merchant Energy Business
- Announced Alliance with Aquila on January 14, 2002
- Leverage Existing Assets
- Capitalize on New Market Opportunities
- Deliver Energy Solutions
- Large Industrial Customer Base Provides Multiple Inside the
the Fence Cogeneration Opportunities
[NiSource logo]
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PRIMARY ENERGY INC.
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* Develop/Manage Energy Projects for Large Industrial Customers
- Inland Steel/National Steel/US Steel; 350 MW
- Whiting Clean Energy Project; 525 MW
- Ironside Energy; 50 MW
* Partnership with Fluor Daniel
* Alliance with Duke Energy
* Footprint Creates New Opportunities
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BUILDING FOR TOMORROW
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VALUE CHAIN
UPSTREAM DOWNSTREAM
-------- ----------
Commodity Commodity
Commodity\------------/Distribution\------------/Conversion
--------- ------------ ----------
* Pipeline Expansion * Regulated Utilities * Cogeneration
* Gas Storage * Customer Growth * Customer Choice
* Exploration & * Products &
Production Services
* Risk Management * Distributed
Generation
[NiSource logo]
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NISOURCE ENERGY MARKET
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* 3.2 Million Customers
* 16,500 Miles of Gas Pipelines
* 670 Bcf of Gas Storage [MAP OF EASTERN UNITED STATES
DEPICTING ENERGY CORRIDOR]
* 4,325 MW Power Generation
Capability
* Over 1.1 Tcf Proved
Natural Gas Reserves
[NiSource logo]
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BUILDING SHAREHOLDER VALUE
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<s> <c> <c> <c> <c> <c> <c>
* * * * * * * * * * * * * * * *
* SHAREHOLDER VALUE *
* * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * *
* Maximize * * Focused * * *
* Utilization * * Strategic * * Environmental *
* of Assets * * Investments * * Stewardship *
* * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * Manage * * *
* Employee * * Customer * * Expenses/ * * Technology *
* Effectiveness * * Driven * * Margins * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* F I N A N C I A L S T R E N G T H *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
[NiSource logo]
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[NiSource logo]
This presentation contains 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 include, among
other things, increased competition in deregulated energy markets,
weather, fluctuations in supply and demand for energy commodities,
successful consummation of dispositions, growth opportunities for
NiSource's regulated and nonregulated businesses, dealings with third
parties over whom NiSource has no control, actual operating experience
of acquired assets, NiSource's ability to integrate acquired operations
into its operations, the regulatory process, regulatory and legislative
changes, changes in general economic, capital and commodity market
conditions, and counter-party credit risk, many of which are beyond
the control of NiSource. These and other risk factors are detailed
from time to time in the company's 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 company does not
undertake any obligation to publicly release any revision to these
forward-looking statements to reflect events or circumstances after
the date of this presentation.
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