EXHIBIT 99
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NISOURCE
Merrill Lynch Power and Gas Leaders Conference
Gary L. Neale
September 18, 2003
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FORWARD-LOOKING STATEMENTS
"SAFE HARBOR" STATEMENT
This presentation includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Those
statements include statements regarding the intent, belief or current
expectations of the Company and its management. Although NiSource Inc.
believes that its expectations are based on reasonable assumptions, it
can give no assurance that its goals will be achieved. Readers are
cautioned that the forward-looking statements in this presentation
are not guarantees of future performance and involve a number of risks
and uncertainties, and that actual results could differ materially from
those indicated by such forward-looking statements. Important factors
that could cause actual results to differ materially from those
indicated by such forward-looking statements include, but are not
limited to, the following: weather, fluctuations in supply and demand
for energy commodities, successful consummation of dispositions,
growth opportunities for NiSource's businesses, increased competition
in deregulated energy markets, dealings with third parties over whom
NiSource has no control, actual operating experience of acquired
assets, the regulatory process, regulatory and legislative changes,
changes in general economic, capital and commodity market conditions,
and counter-party credit risk.
SEPTEMBER, 2003
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A SUPER REGIONAL
INTEGRATED GAS COMPANY
* Strategic Location
- 30% population / 40% of U.S.
energy consumption
* Third Largest Gas Distribution Company
in the U.S.
- 3.3 million customers - 9 states
* Fourth Largest Gas Pipeline
Company in the U.S.
- Over 16,000 miles interstate [MAP OF EASTERN UNITED STATES
pipelines DEPICTING ENERGY CORRIDOR]
* One of the Largest Gas Storage
Networks in the U.S.
- Over 670 Bcf (Market Area)
* Mid Size Regional Electric Business
- Over 437,000 customers
- 3,392 MW generating capacity
* 100% of Operating Income from
Regulated Operations
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NISOURCE
CHALLENGES AND RESULTS
Actions
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* Focus on Regulatory
Opportunities
* Standardize Utility/Pipeline
Operations
Challenges - Reduce O&M Expenses
---------- - Control Capital Spending
> Grow Earnings > * Equity Offering - Fall 2002
>
> Strengthen Balance > * Trim Dividend 20% - Nov. 2003
Sheet >
> * Reduce Debt
> Adequate Liquidity > - Sale of Non-Core Assets
> - Reduce Interest Expense
> Credit Ratings
Results
-------
* Rating Agencies' Affirmation of
Investment Grade Credit Ratings
* Reduced Business Risk Profile
* On-track for Solid 2003
Performance
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EXITING NON-CORE ACTIVITIES
PRE-MERGER FIRST HALF 2003
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Columbia LNG
Columbia Retail
Columbia Electric
Market Hub Partners
Miller Pipeline Over $2.3 Billion
Columbia Propane ====> in Non-Core
Columbia Petroleum Asset Sales
Portland Natural Gas Transmission
SM&P/UTI - Locating Business
IWC Resources - Water Utility
TPC - Gas Trading
Energy USA Propane
Columbia Energy Resources -
E&P Business
Primary Energy (Cogeneration
Facilities) - Pending
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BALANCING OUR RISK
[Pie chart depicting 2002 Operating Income]
2002 Operating Income
100% of Operating
Regulated Electric Operations 27% Income From
Regulated Gas Transmission 34% Regulated
Regulated Gas Distribution 39% Businesses.
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IMPROVING OUR PRODUCTIVITY
[Graph depicting Staffing at Core Businesses]
Staffing at our Core Businesses
YEAR
----
1999 11,920
2000 10,084
2001 9,783
2002 8,734
Core businesses reflect gas distribution, electric utility, gas
transmission and corporate.
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DEMONSTRATING CAPITAL
DISCIPLINE
[Graph depicting Capital Expenditures)
Capital Expenditures ($ in millions)
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1998 $658 2001 $679
1999 $851 2002 $619
2000 $863 2003E $565
Pre-merger Post-merger
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WHILE PROVIDING FOR GROWTH
FROM INTERNAL SOURCES
2003E Capital Expenditures
$565 Million
[Pie chart depicting 2003E $135 Million Growth Capex
Capital Expenditures] -------------------------
Electric Operations 38% * 55% Gas Distribution
Gas Transmission 23% * 27% Gas Transmission
Gas Distribution 35% * 16% Electric
Other 4% * 2% Other
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DIVIDEND PAYOUT RATIO
[Graph depicting Dividend Payout Ratio]
Dividend Payout Ratio
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1997 58%
1998 60%
1999 79%
2000 96%
2001 110%
2002 65%
2003E* 67%
*Based on EPS from continuing operations
*Target Future Payout at 55% Range
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STRENGTHENING OUR GAS DISTRIBUTION
* Industry-leading Scale
* Diversification of Customers
and States
[MAP OF COLUMBIA AND NISOURCE GAS
SERVICE TERRITORIES] * Favorable Overall Regulatory
Environment
- Customer Choice
* Strong Regulatory Relationships
- Incentive Opportunities
* Vertical Integration With
Transmission / Storage
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INTEGRATING OUR TRANSMISSION / STORAGE
* One of the Largest Integrated
Systems in U.S.
- Over 670 Bcf of Storage
(Market Area)
[MAP OF STORAGE * Majority of Capacity Sold to
FACILITIES AND PIPELINES] LDCs
* Competitive Cost Structure Vs.
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 New York/New
England Markets
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CAPITALIZING ON OUR ELECTRIC GATEWAY
* Vertically Integrated Utility
- Near-Term Deregulation Unlikely
[MAP OF EASTERN UNITED * Low-Cost Portfolio of Coal-Fired
STATES DEPICTING FLOW Generation (3,204 MW)
FROM NORTHERN INDIANA
TO THE MICHIGAN MARKET, * Interconnect With Five Surrounding
COMED HUB AND CINERGY Control Areas
HUB WITH LEGEND]
- Ability to Market Excess Energy
* Rate Settlement in Place Until 2006
* Environmental Tracker Approved to
Recover NOx Expense
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POSITIONING NISOURCE FOR SOLID
2003 EARNINGS
[Graph depicting Income and EPS
from Continuing Operations]
Income EPS
YEAR from Continuing Operations (From Continuing)
($ in millions)
2001 189.4 $0.92
2002 396.5 $1.88
2003E(1) 431.0 $1.65
(1) Assumes Normal Weather and an Additional 51 Million Shares
Outstanding in 2003.
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NISOURCE ENERGY MARKET
* Strong Assets Located in Growth
Markets
* Low Business Risk Profile
- 100% Regulated
- 3.7 Million Distribution [MAP OF EASTERN UNITED STATES
Customers DEPICTING ENERGY CORRIDOR]
* Stronger/De-levered Balance Sheet
* Stable Investment Grade Credit
* Improved Liquidity Position
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