<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

         [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly period ended March 31, 2003

         [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the Transition period from ______ to ______


                          Commission file number 1-1098


                              COLUMBIA ENERGY GROUP
                              ---------------------
             (Exact Name of Registrant as Specified in its Charter)


                         Delaware                       13-1594808
                ---------------------------          -----------------
              (State or other jurisdiction of        (I.R.S. Employer
              incorporation or organization)        Identification No.)

                   801 East 86th Avenue
                   Merrillville, Indiana                   46410
                ---------------------------          -----------------
         (Address of principal executive offices)       (Zip Code)


        Registrant's telephone number, including area code (877) 647-5990
                                                           --------------


Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).
Yes [ ] or No [X]

As of November 1, 2000, all shares of the registrant's Common Shares, $.01 par
value, were issued and outstanding, all held beneficially and of record by
NiSource Inc.

The registrant meets the conditions set forth in General Instructions H(1)(a)
and (b) of Form 10-Q and is therefore filing this form with the reduced
disclosure format.



<PAGE>




                     COLUMBIA ENERGY GROUP AND SUBSIDIARIES
                           FORM 10-Q QUARTERLY REPORT
                      FOR THE QUARTER ENDED MARCH 31, 2003

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>


                                                                                                        Page
                                                                                                        ----
PART I        FINANCIAL INFORMATION
<S>                    <C>                                                                              <C>
              Item 1.  Financial Statements

                       Statements of Consolidated Income.......................................          3

                       Consolidated Balance Sheets.............................................          4-5

                       Statements of Consolidated Cash Flows...................................          6

                       Statements of Consolidated Comprehensive Income.........................          7

                       Notes...................................................................          8-12

              Item 2.  Management's Narrative Analysis of Results of Operations................          13-16

              Item 3.  Quantitative and Qualitative Disclosures About Market Risk..............          16

              Item 4.  Controls and Procedures.................................................          16

PART II       OTHER INFORMATION

              Item 1.  Legal Proceedings.......................................................          17-19

              Item 2.  Changes in Securities and Use of Proceeds...............................          19

              Item 3.  Defaults Upon Senior Securities.........................................          19

              Item 4.  Submission of Matters to a Vote of Security Holders.....................          19

              Item 5.  Other Information.......................................................          19

              Item 6.  Exhibits and Reports on Form 8-K........................................          19

              Signature........................................................................          20

              Certifications...................................................................          21-22
</TABLE>


                                       2
<PAGE>




                                     PART I
                                     ------
ITEM 1.  FINANCIAL STATEMENTS

COLUMBIA ENERGY GROUP AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME (unaudited)

<TABLE>
<CAPTION>
Three Months Ended March 31, (in millions)                                  2003           2002
-----------------------------------------------------------------------------------------------
<S>                                                                   <C>             <C>
NET REVENUES
   Distribution                                                       $  1,021.5      $   588.5
   Transmission and Storage                                                306.7          293.8
   Exploration and Production                                               35.6           51.5
   Other                                                                     7.7           13.4
   Affiliated revenues                                                       2.5           22.6
-----------------------------------------------------------------------------------------------
Gross Revenues                                                           1,374.0          969.8
   Cost of Sales                                                           702.5          335.5
   Cost of Sales - Affiliated                                                4.8           10.5
-----------------------------------------------------------------------------------------------
Total Net Revenues                                                         666.7          623.8
-----------------------------------------------------------------------------------------------
OPERATING EXPENSES
   Operation and maintenance                                               206.0          179.3
   Depreciation, depletion and amortization                                 53.0           58.2
   Gain on sale of assets                                                  (70.4)          (3.8)
   Other taxes                                                              74.8           61.8
-----------------------------------------------------------------------------------------------
Total Operating Expenses                                                   263.4          295.5
-----------------------------------------------------------------------------------------------
OPERATING INCOME                                                           403.3          328.3
-----------------------------------------------------------------------------------------------
OTHER INCOME (DEDUCTIONS)
   Interest expense, net                                                   (23.0)         (29.6)
   Other, net                                                                5.3            5.1
-----------------------------------------------------------------------------------------------
Total Other Income (Deductions)                                            (17.7)         (24.5)
-----------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS
   BEFORE INCOME TAXES                                                     385.6          303.8
INCOME TAXES                                                               147.2          115.2
-----------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS                                          238.4          188.6
-----------------------------------------------------------------------------------------------
Loss from Discontinued Operations -- net of taxes                           (2.4)          (1.8)
Change in Accounting- net of taxes                                         (16.8)             -
-----------------------------------------------------------------------------------------------
NET INCOME                                                             $   219.2      $   186.8
===============================================================================================
</TABLE>

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.


                                       3
<PAGE>
ITEM 1.  FINANCIAL STATEMENTS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                           MARCH 31,       December 31,
(in millions)                                                                   2003               2002
-------------------------------------------------------------------------------------------------------
                                                                          (unaudited)
<S>                                                                       <C>                <C>
ASSETS
PROPERTY, PLANT AND EQUIPMENT
  Utility Plant                                                           $  8,406.6         $  8,388.6
  Accumulated depreciation and amortization                                 (4,049.7)          (4,023.8)
-------------------------------------------------------------------------------------------------------
  Net utility plant                                                          4,356.9            4,364.8
-------------------------------------------------------------------------------------------------------
  Gas and oil producing properties, successful efforts method
    United States                                                              989.1              970.1
    Canada                                                                       6.5                6.4
  Accumulated depletion                                                       (445.5)            (431.2)
-------------------------------------------------------------------------------------------------------
  Net gas and oil producing properties                                         550.1              545.3
-------------------------------------------------------------------------------------------------------
  Other property, at cost, less accumulated depreciation                         2.0                  -
-------------------------------------------------------------------------------------------------------
Net Property, Plant and Equipment                                            4,909.0            4,910.1
-------------------------------------------------------------------------------------------------------

INVESTMENTS AND OTHER ASSETS
  Assets of discontinued operations                                             77.8               79.2
  Unconsolidated affiliates                                                     35.1               35.0
  Assets held for sale                                                           8.6               24.2
  Other investments                                                             40.6               21.5
-------------------------------------------------------------------------------------------------------
Total Investments                                                              162.1              159.9
-------------------------------------------------------------------------------------------------------

CURRENT ASSETS
  Cash and cash equivalents                                                    329.9               37.4
  Restricted cash                                                                  -                1.9
  Accounts receivable (less reserves of $32.8 and $17.1, respectively)         728.7              338.0
  Unbilled revenue (less reserves of $1.9 and $2.2, respectively)              129.2              173.4
  Gas inventory                                                                 32.0              214.7
  Underrecovered gas and fuel costs                                            120.0               90.1
  Materials and supplies, at average cost                                       15.7               15.3
  Price risk management assets                                                  32.1               25.5
  Exchange gas receivable                                                      191.2              104.6
  Prepayments and other                                                        178.0              174.7
-------------------------------------------------------------------------------------------------------
Total Current Assets                                                         1,756.8            1,175.6
-------------------------------------------------------------------------------------------------------

OTHER ASSETS
  Price risk management assets                                                 130.9              112.9
  Regulatory assets                                                            352.8              359.4
  Intangible assets, less accumulated amortization                               3.0                3.0
  Deferred charges and other                                                    82.6               85.4
-------------------------------------------------------------------------------------------------------
Total Other Assets                                                             569.3              560.7
-------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                              $  7,397.2         $  6,806.3
=======================================================================================================
</TABLE>




The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.






                                       4

<PAGE>

ITEM 1.  FINANCIAL STATEMENTS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                               MARCH 31,     December 31,
(in millions)                                                      2003             2002
----------------------------------------------------------------------------------------
                                                             (unaudited)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
<S>                                                          <C>              <C>
Common Stock Equity                                          $  2,624.8       $  2,396.2
Long-term debt, excluding amounts due within one year           1,393.3          1,387.8
----------------------------------------------------------------------------------------
Total Capitalization                                            4,018.1          3,784.0
----------------------------------------------------------------------------------------

CURRENT LIABILITIES
   Current portion of long-term debt                                0.2              0.2
   Short-term borrowings                                              -              0.8
   Accounts payable                                               347.2            318.6
   Accounts payable-Affiliated                                     50.2             39.2
   Customer deposits                                               21.6             21.0
   Taxes accrued                                                  302.8            185.1
   Interest accrued                                                58.1             27.2
   Overrecovered gas and fuel costs                                 9.4             13.1
   Price risk management liabilities                               11.7              8.5
   Exchange gas payable                                           483.5            411.9
   Current deferred revenue                                       129.9            129.6
   Accrued liability for postretirement and pension benefits       27.8             27.7
   Other accruals                                                 382.9            329.3
----------------------------------------------------------------------------------------
Total Current Liabilities                                       1,825.3          1,512.2
----------------------------------------------------------------------------------------

OTHER LIABILITIES AND DEFERRED CREDITS
   Deferred income taxes                                          835.5            805.9
   Deferred investment tax credits                                 28.0             28.4
   Deferred credits                                                45.4             41.6
   Noncurrent deferred revenue                                    272.8            305.4
   Accrued liability for postretirement and pension benefits      112.9            115.3
   Liabilities held for sale                                        5.5                -
   Liabilities of discontinued operations                           3.0              2.1
   Other noncurrent liabilities                                   250.7            211.4
----------------------------------------------------------------------------------------
Total Other                                                     1,553.8          1,510.1
----------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES                                         -                -
----------------------------------------------------------------------------------------
TOTAL CAPITALIZATION AND LIABILITIES                         $  7,397.2       $  6,806.3
========================================================================================
</TABLE>



The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.



                                       5
<PAGE>

ITEM 1.  FINANCIAL STATEMENTS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS (unaudited)

<TABLE>
<CAPTION>
Three Months Ended March 31, (in millions)                                                  2003               2002
-------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
<S>                                                                                    <C>                <C>
   Net Income                                                                          $   219.2          $   186.8
   Adjustments to reconcile net income to net cash from
     continuing operations:
     Depreciation, depletion and amortization                                               53.0               58.2
     Net changes in price risk management activities                                        (5.6)                 -
     Deferred income taxes and investment tax credits                                       40.4              (96.6)
     Deferred revenue                                                                      (32.2)              (3.4)
     Gain on sale of assets                                                                (70.4)              (3.8)
     Change in accounting                                                                   16.8                  -
     Loss from discontinued operations                                                       2.4                1.8
     Other assets                                                                            9.2              107.4
     Other liabilities                                                                      (6.2)             (21.7)
   Changes in assets and liabilities:
     Accounts receivable, net                                                             (353.3)             (35.4)
     Inventories                                                                           182.3              180.0
     Accounts payable                                                                       40.0             (161.7)
     Taxes accrued                                                                         122.4               86.5
     (Under) Overrecovered gas and fuel costs                                              (33.6)              16.1
     Exchange gas receivable/payable                                                       (15.1)             (20.4)
     Other accruals                                                                         52.2               35.1
     Other assets                                                                          (20.7)              62.2
     Other liabilities                                                                      32.5              (40.7)
-------------------------------------------------------------------------------------------------------------------
Net Cash from Operating Activities                                                         233.3              350.4
-------------------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES
   Capital expenditures                                                                    (35.8)             (42.0)
   Proceeds from disposition of assets                                                      95.8                  -
-------------------------------------------------------------------------------------------------------------------
Net Investment Activities                                                                   60.0              (42.0)
-------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
   Changes in short-term debt                                                               (0.8)                 -
   Other financing activity                                                                    -               (2.9)
-------------------------------------------------------------------------------------------------------------------
Net Financing Activities                                                                    (0.8)              (2.9)
-------------------------------------------------------------------------------------------------------------------
Increase in cash and temporary cash investments                                            292.5              305.5
Cash and temporary cash investments at beginning of year                                    37.4               53.8
-------------------------------------------------------------------------------------------------------------------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD                                   $   329.9          $   359.3
===================================================================================================================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
   Cash paid for interest, net of amounts capitalized                                          -                8.6
   Interest capitalized                                                                      0.9                0.8
   Cash paid for income taxes (net of refunds)                                               3.4                  -
-------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.


                                       6

<PAGE>




ITEM 1.  FINANCIAL STATEMENTS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (unaudited)

<TABLE>
<CAPTION>
Three Months Ended March 31, (in millions)                                                 2003               2002
------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                <C>
Net Income                                                                            $   219.2          $   186.8
   Other comprehensive income (loss), net of tax
     Foreign currency translation adjustment                                                0.9                0.2
     Net unrealized gains (losses) on cash flow hedges                                      8.8              (15.8)
------------------------------------------------------------------------------------------------------------------
   Total other comprehensive income (loss)                                                  9.7              (15.6)
------------------------------------------------------------------------------------------------------------------
Total Comprehensive Income                                                            $   228.9          $   171.2
------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.





                                       7
<PAGE>




ITEM 1.  FINANCIAL STATEMENTS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       BASIS OF ACCOUNTING PRESENTATION

The accompanying unaudited consolidated financial statements for Columbia Energy
Group (Columbia) reflect all normal recurring adjustments that are necessary, in
the opinion of management, to present fairly the results of operations in
accordance with accounting principles generally accepted in the United States.

The accompanying financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in Columbia's
Annual Report on Form 10-K (Form 10-K) for the fiscal year ended December 31,
2002. Income for interim periods may not be indicative of results for the
calendar year due to weather variations and other factors. Certain
reclassifications have been made to the 2002 financial statements to conform to
the 2003 presentation.

2.       RESTRUCTURING ACTIVITIES

Since 2000, Columbia has implemented restructuring initiatives to streamline its
operations and realize efficiencies from the acquisition of Columbia by NiSource
Inc. (NiSource).

For all of the plans, a total of approximately 1,000 management, professional,
administrative and technical positions have been identified for elimination. As
of March 31, 2003, approximately 850 employees were terminated, of whom
approximately 65 employees were terminated during the first quarter 2003. At
March 31, 2003 and December 31, 2002, the consolidated balance sheets reflected
liabilities of $29.6 million and $35.4 million related to the restructuring
plans, respectively. During the first quarter of 2003 and 2002, $5.4 million and
$0.4 million of benefits were paid as a result of the restructuring plans,
respectively. Additionally, during the first quarter of 2003, the restructuring
plan liability was reduced by $0.4 million due to a reduction in estimated costs
related to reorganization initiatives.

3.       DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

During 2002, Columbia decided to exit the telecommunications business. The
results of operations related to Columbia Transmission Communications
Corporation (Transcom) were displayed as discontinued operations on Columbia's
consolidated income statements and its assets and liabilities were separately
aggregated and reflected as assets and liabilities of discontinued operations on
the consolidated balance sheets for all periods presented.

The loss from discontinued operations are provided in the following table:

<TABLE>
<CAPTION>
Three Months Ended March 31, (in millions)                                 2003                2002
---------------------------------------------------------------------------------------------------
<S>                                                                       <C>                <C>
REVENUES FROM DISCONTINUED OPERATIONS                                     $  0.1             $  0.2
---------------------------------------------------------------------------------------------------

(Loss) from discontinued operations                                       $ (3.7)            $ (2.8)
Income tax (benefit)                                                        (1.3)              (1.0)
---------------------------------------------------------------------------------------------------
NET (LOSS) FROM DISCONTINUED OPERATIONS                                   $ (2.4)            $ (1.8)
---------------------------------------------------------------------------------------------------
</TABLE>

On January 28, 2003, Columbia's subsidiary Columbia Natural Resources, Inc.
(CNR) sold its interest in a natural gas exploration and production joint
venture in New York State representing 39.3 billion cubic feet in reserves and
approximately 6.0 Bcf of production for approximately $95.0 million. Columbia
recognized an after-tax gain of $44.4 million related to the sale in the first
quarter 2003. The assets of CNR's interest in the joint venture were reported as
assets held for sale on the consolidated balance sheet at December 31, 2002.


                                       8
<PAGE>

ITEM 1.  FINANCIAL STATEMENTS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



The assets and liabilities of discontinued operations and assets and liabilities
held for sale were as follows:

<TABLE>
<CAPTION>
                                                                                       MARCH 31,      December 31,
(in millions)                                                                               2003              2002
------------------------------------------------------------------------------------------------------------------
ASSETS HELD FOR SALE AND ASSETS OF DISCONTINUED OPERATIONS
<S>                                                                                    <C>               <C>
   Accounts receivable, net                                                            $    11.3         $    13.4
   Property, plant and equipment, net                                                        7.2              31.3
   Other assets                                                                             67.9              58.7
------------------------------------------------------------------------------------------------------------------
Assets Held for Sale and Assets of Discontinued Operations                                  86.4             103.4
------------------------------------------------------------------------------------------------------------------

LIABILITIES HELD FOR SALE AND LIABILITIES OF DISCONTINUED OPERATIONS
   Current liabilities                                                                      (7.1)             (2.1)
   Other liabilities                                                                        (1.4)                -
------------------------------------------------------------------------------------------------------------------
Liabilities Held for Sale and Liabilities of Discontinued Operations                        (8.5)             (2.1)
------------------------------------------------------------------------------------------------------------------
NET ASSETS AND NET LIABILITIES HELD FOR SALE AND NET ASSETS
   AND NET LIABILITIES OF DISCONTINUED OPERATIONS                                      $    77.9         $   101.3
------------------------------------------------------------------------------------------------------------------
</TABLE>

4.       RISK MANAGEMENT ACTIVITIES

Columbia is exposed to market risk due to fluctuations in commodity prices,
primarily at its exploration and production subsidiary. Columbia uses
commodity-based derivative financial instruments to manage certain risks in its
business and accounts for its derivatives under Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activity." Financial instruments authorized for use by Columbia for
hedging include futures, swaps and options. Columbia is also exposed to interest
rate risk and has entered into interest rate swaps to hedge a portion of the
interest rate risk associated with its long-term debt.

HEDGING ACTIVITIES. The activity for the first quarter 2003 affecting other
comprehensive income, with respect to cash flow hedges included the following:

<TABLE>
<CAPTION>
(in millions, net of tax)                                                                                     2003
------------------------------------------------------------------------------------------------------------------
<S>                                                                                                       <C>
Net unrealized gains on derivatives qualifying as cash flow hedges at the
   beginning of the period                                                                                $   65.0

Unrealized hedging gains arising during the period on derivatives qualifying
    as cash flow hedges                                                                                       10.8

Reclassification adjustment for net (gain) included in net income                                             (2.0)
------------------------------------------------------------------------------------------------------------------
Net unrealized gains on derivatives qualifying as cash flow hedges at the end of the period               $   73.8
------------------------------------------------------------------------------------------------------------------
</TABLE>

Unrealized gains and losses on Columbia's hedges were recorded as price risk
management assets and liabilities. The accompanying Consolidated Balance Sheets
reflected price risk management assets related to unrealized gains on hedges of
$163.0 million and $138.4 million at March 31, 2003 and December 31, 2002,
respectively, of which $32.1 million and $25.5 million were included in "Current
Assets" and $130.9 million and $112.9 million were included in "Other Assets."
Price risk management liabilities related to unrealized losses on hedges of
$11.7 million and $8.5 million at March 31, 2003 and December 31, 2002,
respectively, were included in "Current Liabilities."

During the first quarter 2003, a net loss of $0.1 million, net of tax, was
recognized in earnings due to the change in value of certain derivative
instruments primarily representing time value, and there were no components of
the derivatives' fair values excluded in the assessment of hedge effectiveness.
Also during the first quarter, Columbia reclassified no amounts from other
comprehensive income to earnings, due to the probability that certain forecasted
transactions would not occur. It is anticipated that during the next twelve
months the expiration and settlement of cash flow hedge contracts will result in
income recognition of amounts currently classified in other comprehensive income
of approximately $15.0 million, net of tax.


                                       9
<PAGE>
ITEM 1.  FINANCIAL STATEMENTS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5.       RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

SFAS No. 143 -- Accounting for Asset Retirement Obligations. In July 2001, the
Financial Accounting Standards Board issued SFAS No. 143, "Accounting for Asset
Retirement Obligations" (SFAS No. 143). SFAS No. 143 requires entities to record
the fair value of a liability for an asset retirement obligation in the period
in which it is incurred. When the liability is initially recorded, the entity
capitalizes the cost, thereby increasing the carrying amount of the related
long-lived asset. Over time, the liability is accreted, and the capitalized cost
is depreciated over the useful life of the related asset. The rate-regulated
subsidiaries will defer the difference between the amount recognized for
depreciation and accretion and the amount collected in rates as required
pursuant to SFAS No. 71, "Accounting for the Effects of Certain Types of
Regulation."

Columbia's asset retirement obligations liability was mainly comprised of
obligations for plugging and abandonment costs related to the exploration and
production operations. Significant liabilities were also calculated for the
pipeline operations related to disposing of offshore platforms, cutting, capping
and filling offshore pipelines and certain storage facilities planned for
abandonment. Minor liabilities were identified for the telecommunications
network, which is currently classified as a discontinued operation. Asset
retirement obligations related to the gas distribution facilities and gas
pipeline networks were identified, however the associated liabilities were not
quantifiable due to the indeterminate lives of the associated assets.

Columbia adopted the provisions of SFAS No. 143 on January 1, 2003, and as a
result Columbia recognized an asset retirement obligations liability of $49.2
million. In addition, Columbia capitalized $19.3 million in additions to plant
assets, net of accumulated amortization. An expense of $1.7 million was
recognized immediately upon adoption related to discontinued operations. The
cumulative after-tax effect of adopting SFAS No. 143 amounted to $16.8 million.
Certain costs of removal, that have been and continue to be included in
depreciation rates and collected in the service rates of the rate-regulated
subsidiaries, did not meet the definition of an asset retirement obligation
pursuant to SFAS No. 143. The amount of the other costs of removal reflected as
a component of Columbia's accumulated depreciation and amortization was
approximately $283.5 million at March 31, 2003.

For the first quarter 2003, Columbia recognized amortization expense of $0.2
million related to the amounts capitalized as additions to plant and recognized
$0.8 million of accretion expense. The asset retirement obligations liability
totaled $50.0 million at March 31, 2003. Had Columbia adopted SFAS No. 143 at
the dates the actual liabilities were incurred, the asset retirement obligations
liability would have been $44.7 million and $40.8 million at December 31, 2001
and 2000, respectively.

6.       STOCK OPTIONS AND AWARDS

NiSource currently issues long-term incentive grants to key management
employees, including the management of Columbia. SFAS No. 123, "Accounting for
Stock-Based Compensation" (SFAS No. 123), encourages, but does not require,
entities to adopt the fair value method of accounting for stock-based
compensation plans. The fair value method would require the amortization of the
fair value of stock-based compensation at the date of grant over the related
vesting period. Columbia continues to apply the intrinsic value method of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," for awards granted under the stock-based compensation plans. The
following table illustrates the effect on net income as if Columbia had applied
the fair value recognition provisions of SFAS No. 123 to stock-based employee
compensation.

<TABLE>
<CAPTION>
Three Months Ended March 31, ($ in millions)                                                  2003             2002
-------------------------------------------------------------------------------------------------------------------
NET INCOME
<S>                                                                                          <C>              <C>
   As reported                                                                               219.2            186.8
   Less:  Total stock-based employee compensation expense
          determined under the fair value method for all
          awards, net of tax                                                                   1.3              0.6
-------------------------------------------------------------------------------------------------------------------
   Pro forma                                                                                 217.9            186.2
-------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       10
<PAGE>
ITEM 1.  FINANCIAL STATEMENTS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7.       LEGAL PROCEEDINGS

In the normal course of its business, Columbia and its subsidiaries have been
named as defendants in various legal proceedings. In the opinion of management,
the ultimate disposition of these currently asserted claims would not have a
material adverse impact on Columbia's consolidated financial position or results
of operations.

8.       ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table displays the components of Accumulated Other Comprehensive
Income, included in "Common Stock Equity," on the consolidated balance sheets.

<Table>
<Caption>
                                                                  MARCH 31,     December 31,
(in millions)                                                          2003             2002
---------------------------------------------------------------------------------------------
<S>                                                                <C>            <C>
Foreign currency translation adjustment                            $      -       $    (0.9)
Gain on available for sale securities                                   0.3              0.3
Net unrealized gains on cash flow hedges                               73.8             65.0
Minimum pension liability adjustment                                  (20.5)           (20.1)
---------------------------------------------------------------------------------------------
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME, NET                 $    53.6        $    44.3
---------------------------------------------------------------------------------------------
</Table>

9.       GUARANTEES AND INDEMNITIES

As a part of normal business, Columbia and certain subsidiaries enter into
various agreements providing financial or performance assurance to third parties
on behalf of other subsidiaries. These agreements are entered into primarily to
support or enhance the creditworthiness otherwise attributed to a subsidiary on
a stand-alone basis, thereby facilitating the extension of sufficient credit to
accomplish the subsidiaries' intended commercial purposes. The total commercial
commitments in existence at March 31, 2003 and the years in which they expire
were:

<TABLE>
<CAPTION>
(in millions)                                  2003        2004         2005         2006        2007        After
-------------------------------------------------------------------------------------------------------------------
<S>                                         <C>           <C>        <C>          <C>          <C>         <C>
Guarantees supporting commodity
   transactions of subsidiaries             $     -       $   -      $  50.0      $ 920.0      $ 45.9      $ 166.6
Other guarantees                              130.0           -         51.1            -           -        109.2
-------------------------------------------------------------------------------------------------------------------
Total commercial commitments                $ 130.0       $   -      $ 101.1      $ 920.0      $ 45.9      $ 275.8
-------------------------------------------------------------------------------------------------------------------
</TABLE>

Columbia has issued guarantees, which support up to approximately $1.2 billion
of commodity-related payments for its subsidiaries involved in satisfying
requirements under forward gas sales agreements. These guarantees were provided
to counterparties in order to facilitate the transactions. To the extent
liabilities exist under the commodity-related contracts subject to these
guarantees, such liabilities are included in the consolidated balance sheets.

Columbia has purchase and sales agreement guarantees totaling $142.5 million,
which guarantee performance of the seller's covenants, obligations, liabilities,
representations and warranties under the agreements. No amounts related to the
purchase and sales agreement guarantees are reflected in the consolidated
balance sheets.

Management believes that the likelihood Columbia would be required to perform or
otherwise incur any significant losses associated with any of the aforementioned
guarantees is remote.


                                       11
<PAGE>
ITEM 1.  FINANCIAL STATEMENTS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


10.      PRESENTATION OF SEGMENT INFORMATION

Columbia manages its operations in four primary segments: Distribution,
Transmission and Storage, Exploration and Production, and Other. The following
table provides information concerning these major business segments. Revenues
include intersegment sales to affiliated subsidiaries, which are eliminated when
consolidated. Affiliated sales are recognized on the basis of prevailing market
or regulated prices. Operating income (loss) is derived from revenues and
expenses directly associated with each segment.

<TABLE>
<CAPTION>
Three Months Ended March 31, (in millions)                                                 2003              2002
-----------------------------------------------------------------------------------------------------------------
REVENUES
DISTRIBUTION
<S>                                                                                  <C>                <C>
   Unaffiliated                                                                      $  1,161.3         $   708.9
   Intersegment and affiliates                                                                -               4.6
-----------------------------------------------------------------------------------------------------------------
Total                                                                                   1,161.3             713.5
-----------------------------------------------------------------------------------------------------------------
TRANSMISSION AND STORAGE
   Unaffiliated                                                                           162.0             173.7
   Intersegment and affiliates                                                             67.5              71.2
-----------------------------------------------------------------------------------------------------------------
Total                                                                                     229.5             244.9
-----------------------------------------------------------------------------------------------------------------
EXPLORATION AND PRODUCTION
   Unaffiliated                                                                            40.8              58.2
   Intersegment and affiliates                                                              1.8              15.4
-----------------------------------------------------------------------------------------------------------------
Total                                                                                      42.6              73.6
-----------------------------------------------------------------------------------------------------------------
OTHER
   Unaffiliated                                                                             7.4               5.5
   Intersegment and affiliates                                                                -               0.1
-----------------------------------------------------------------------------------------------------------------
Total                                                                                       7.4               5.6
-----------------------------------------------------------------------------------------------------------------
Adjustments and eliminations                                                              (66.8)            (67.8)
-----------------------------------------------------------------------------------------------------------------
CONSOLIDATED REVENUES                                                                $  1,374.0         $   969.8
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
OPERATING INCOME (LOSS)
   Distribution                                                                      $    206.1         $   151.7
   Transmission and Storage                                                               110.9             125.8
   Exploration and Production                                                              77.4              38.4
   Other                                                                                   (0.3)             12.6
   Corporate                                                                                9.2              (0.2)
-----------------------------------------------------------------------------------------------------------------
CONSOLIDATED                                                                          $   403.3         $   328.3
-----------------------------------------------------------------------------------------------------------------
</TABLE>


                                       12
<PAGE>




ITEM 2.  MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

COLUMBIA ENERGY GROUP AND SUBSIDIARIES

Columbia Energy Group (Columbia) meets the conditions specified in General
Instruction H(1)(a) and (b) to Form 10-Q and is permitted to use the reduced
disclosure format for wholly-owned subsidiaries of companies, such as NiSource
Inc. (NiSource), that are reporting companies under the Securities Exchange Act
of 1934. Accordingly, this Columbia Management's Narrative Analysis of Results
of Operations is included in this report, and Columbia has omitted from this
report the information called for by Part I. Item 2 (Management's Discussion and
Analysis of Financial Condition and Results of Operations).

Forward Looking Statements
The Management's Narrative Analysis of Results of Operations, including
statements regarding market risk sensitive instruments, contains
"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. Investors and prospective investors should understand that many
factors govern whether any forward-looking statement contained herein will be or
can be achieved. Any one of those factors could cause actual results to differ
materially from those projected. These forward-looking statements include, but
are not limited to, statements concerning Columbia's plans, proposed
dispositions, objectives, expected performance, expenditures and recovery of
expenditures through rates, stated on either a consolidated or segment basis,
and any and all underlying assumptions and other statements that are other than
statements of historical fact. From time to time, Columbia may publish or
otherwise make available forward-looking statements of this nature. All such
subsequent forward-looking statements, whether written or oral and whether made
by or on behalf of Columbia, are also expressly qualified by these cautionary
statements. All forward-looking statements are based on assumptions that
management believes to be reasonable; however, there can be no assurance that
actual results will not differ materially. Realization of Columbia's objectives
and expected performance is subject to a wide range of risks and can be
adversely affected by, among other things, increased competition in deregulated
energy markets, weather, fluctuations in supply and demand for energy
commodities, successful consummation of proposed acquisitions and dispositions,
growth opportunities for Columbia's regulated and nonregulated businesses,
dealings with third parties over whom Columbia has no control, actual operating
experience of acquired assets, Columbia'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 Columbia.

The following Management's Narrative Analysis should be read in conjunction with
the Columbia Annual Report on Form 10-K for the fiscal year ended December 31,
2002.

                     FIRST QUARTER 2003 CONSOLIDATED RESULTS

Net Income
Columbia reported net income of $219.2 million for the three months ended March
31, 2003, compared to net income of $186.8 million for the first quarter in
2002. Operating income was $403.3 million, up $75.0 million from the same period
in 2002.

Net Revenues
Total consolidated net revenues (gross revenues less cost of sales) for the
three months ended March 31, 2003, were $666.7 million, a $42.9 million increase
over the same period last year. The increase in net revenues was a result of
increased natural gas sales and deliveries due to colder weather and increased
demand amounting to $52.1 million, net of $17.4 million from lower interruptible
service revenues and lower firm service revenues as result of measures taken to
meet customer demand during a period of sustained cold weather in the northeast
market areas. Revenues also increased due to higher gross receipt taxes that
were offset in operating expenses. The increase was partially offset by $26.1
million due to lower average prices related to favorable hedge positions for the
2002 period and deliveries of natural gas production under forward sales
agreements.


                                       13
<PAGE>

ITEM 2.  MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES


Expenses
Operating expenses for the first quarter 2003 were $263.4 million, a decrease of
$32.1 million from the 2002 period. The 2003 operating expenses were favorably
impacted by a gain of $70.4 million on the sale of an interest in a natural gas
exploration and production joint venture in New York state, partially offset by
increased uncollectible receivables of $12.9 million from a change in the method
of calculation and the effects of weather-driven higher gas costs on the
residential customer base. First quarter 2002 operating expenses were positively
impacted by $23.2 million from insurance recoveries of environmental expenses
and the reversal of reserves. Other taxes increased mainly reflecting higher
gross receipt taxes that were offset in revenues.

Other Income (Deductions)
Interest expense was $23.0 million for the quarter, a decrease of $6.6 million
compared to the first quarter of 2002. The decrease was primarily due to a
reduction of debt.

Income Taxes
Income tax expense for the first quarter 2003 was $147.2 million, an increase of
$32.0 million compared to the 2002 period, due to higher pre-tax income.

Change in Accounting
The change in accounting of $16.8 million, net-of-tax, resulted from the
cumulative effect of adopting the Financial Accounting Standards Board statement
on asset retirement obligations.

LIQUIDITY AND CAPITAL RESOURCES

A significant portion of Columbia's operations is subject to seasonal
fluctuations in cash flows. During the heating season, which is primarily from
November through March, cash receipts from natural gas sales and transportation
services typically exceed cash requirements. Conversely, during the remainder of
the year, cash on hand together with external short-term financing, as needed,
is used to purchase gas to place in storage for heating season deliveries,
perform necessary maintenance of facilities, make capital improvements in plant
and expand service.

Net cash from continuing operations for the quarter ended March 31, 2003 was
$233.3 million, a $117.1 million decrease from the same period in 2002. The
change was principally driven by an increase in accounts receivable, (affected
by a decrease in sales of receivables of $99.5 million), partly offset by an
increase in accounts payable.

Columbia satisfies its liquidity requirements primarily through internally
generated funds and through intercompany borrowings from the NiSource Money
Pool. Columbia may borrow, on an intercompany basis, a maximum of $1.0 billion
through the NiSource Money Pool as approved by the Securities and Exchange
Commission under the Public Utility Holding Company Act of 1935. NiSource
Finance Corp. (NFC) provides funding to the NiSource Money Pool from external
borrowing sources and maintains an aggregate $1.25 billion revolving credit
facility with a syndicate of banks. The credit facility is guaranteed by
NiSource. As of March 31, 2003, Columbia had no intercompany short-term
borrowings with NFC outstanding.

On January 28, 2003, Columbia's subsidiary Columbia Natural Resources, Inc. sold
its interest in a natural gas exploration and production joint venture in New
York State representing 39.3 billion cubic feet in reserves and approximately
6.0 Bcf of production for approximately $95.0 million. Columbia recognized an
after-tax gain of $44.4 million related to the sale in the first quarter 2003.

Columbia has entered into interest rate swap agreements to modify the interest
characteristics of its outstanding long-term debt. Under the terms of the swap
agreements, Columbia pays interest based on a floating rate index and receives
interest based on a fixed rate. The effect of these agreements is to modify the
interest rate characteristics of a portion of Columbia's long-term debt from
fixed to variable and hedge the fair value of the underlying debt.

On April 11, 2003, Columbia entered into fixed-to-variable interest rate swap
agreements in a notional amount of $100 million with two counterparties.
Columbia will receive payments based upon a fixed 7.42% interest rate and pay a
floating interest amount based on U.S. 6-month LIBOR-BBA plus 2.38 percent per
annum. There was no exchange of premium at the initial date of the swaps. The
swaps contain mirror-image call provisions that allow the counterparties to
cancel the agreements beginning November 28, 2005 through the stated maturity
date. In addition,

                                       14
<PAGE>
ITEM 2.  MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES

each party has the right to cancel the swaps on either April 15, 2008 or April
15, 2013 at mid-market. Effectiveness of the swaps was determined using the
short-cut method pursuant to Statement of Financial Accounting Standards (SFAS)
No. 133, "Accounting for Derivative Instruments and Hedging Activity" (SFAS No.
133).

On April 4, 2003, Columbia terminated a fixed-to-variable interest rate swap
agreement containing a notional amount of $100 million. Columbia received a
settlement payment from the counterparty amounting to $8.2 million, which will
be amortized to interest expense over the remaining term (2.5 years) of the
underlying debt.

Columbia Gas of Ohio, Inc. is a party to an agreement to sell, without recourse,
up to $200.0 million of its trade receivables to Columbia Accounts Receivable
Corporation (CARC), a wholly-owned subsidiary of Columbia. CARC, in turn, is
party to an agreement in which it sells a percentage ownership interest in a
defined pool of the accounts receivable to a commercial paper conduit. As of
March 31, 2003, CARC had no outstanding accounts receivable under the conduit.

Management believes that its sources of funding are sufficient to meet the
short- and long-term liquidity needs of Columbia.

                                OTHER INFORMATION

Critical Accounting Policies
Columbia applies certain accounting policies based on the accounting
requirements discussed below that have had, and may continue to have,
significant impacts on Columbia's results of operations and consolidated balance
sheets.

SFAS No. 71 - ACCOUNTING FOR THE EFFECTS OF CERTAIN TYPES OF REGULATION. SFAS
No. 71, "Accounting for the Effects of Certain Types of Regulation" (SFAS No.
71), provides that rate-regulated subsidiaries account for and report assets and
liabilities consistent with the economic effect of the way in which regulators
establish rates, if the rates established are designed to recover the costs of
providing the regulated service and if the competitive environment makes it
probable that such rates can be charged and collected. Columbia's rate-regulated
subsidiaries follow the accounting and reporting requirements of SFAS No. 71.
Certain expenses and credits subject to utility regulation or rate determination
normally reflected in income are deferred on the balance sheet and are
recognized in income as the related amounts are included in service rates and
recovered from or refunded to customers.

In the event that regulation significantly changes the opportunity for Columbia
to recover its costs in the future, all or a portion of Columbia's regulated
operations may no longer meet the criteria for the application of SFAS No. 71.
In such event, a write-down of all or a portion of Columbia's existing
regulatory assets and liabilities could result. If transition cost recovery is
approved by the appropriate regulatory bodies that would meet the requirements
under generally accepted accounting principles for continued accounting as
regulatory assets and liabilities during such recovery period, the regulatory
assets and liabilities would be reported at the recoverable amounts. If unable
to continue to apply the provisions of SFAS No. 71, Columbia would be required
to apply the provisions of SFAS No. 101, "Regulated Enterprises -- Accounting
for the Discontinuation of Application of Financial Accounting Standards Board
Statement No. 71." In management's opinion, Columbia's regulated subsidiaries
will be subject to SFAS No. 71 for the foreseeable future.

Certain of the regulatory assets reflected on Columbia's Consolidated Balance
Sheets require specific regulatory action in order to be included in future
service rates. Although recovery of these amounts is not guaranteed, Columbia
believes that these costs meet the requirements for deferral as regulatory
assets under SFAS No. 71.

HEDGING ACTIVITIES. Under SFAS No. 133, the accounting for changes in the fair
value of a derivative depends on the intended use of the derivative and
resulting designation. Unrealized and realized gains and losses are recognized
each period as components of other comprehensive income, regulatory assets and
liabilities or earnings depending on the nature of such derivatives. For
subsidiaries that utilize derivatives for cash flow hedges, the effective
portions of the gains and losses are recorded to other comprehensive income and
are recognized in earnings concurrent with the disposition of the hedged risks.
For fair value hedges, the gains and losses are recorded in earnings each period
along with the change in the fair value of the hedged item. As a result of the
rate-making process, the rate-regulated subsidiaries generally record gains and
losses as regulatory liabilities or assets and recognize such gains or losses in
earnings when recovered in revenues.

                                       15
<PAGE>
ITEM 2.  MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES

In order for a derivative contract to be designated as a hedge, the relationship
between the hedging instrument and the hedged item or transaction must be highly
effective. The effectiveness test is performed at the inception of the hedge and
each reporting period thereafter, throughout the period that the hedge is
designated. Any amounts determined to be ineffective are recorded currently in
earnings.

Although Columbia applies some judgment in the assessment of hedge effectiveness
to designate certain derivatives as hedges, the nature of the contracts used to
hedge the underlying risks is such that the correlation of the changes in fair
values of the derivatives and underlying risks is high. Columbia generally uses
NYMEX exchange-traded natural gas futures and options contracts and
over-the-counter swaps based on published indices to hedge the risks underlying
its natural-gas-related businesses.

PENSIONS AND POSTRETIREMENT BENEFITS. Columbia has defined benefit plans for
both pensions and other postretirement benefits. The plans are accounted for
under SFAS No. 87, "Employers' Accounting for Pensions," and SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions." The
calculation of the net obligations and annual expense related to the plans
requires a significant degree of judgment regarding the discount rates to be
used in bringing the liabilities to present value, long-term returns on plan
assets and employee longevity, amongst other assumptions. Due to the size of the
plans and the long-term nature of the associated liabilities, changes in the
assumptions used in the actuarial estimates could have material impacts on the
measurement of the net obligations and annual expense recognition.

Environmental Matters
Proposals for voluntary initiatives and mandatory controls are being discussed
both in the United States and worldwide to reduce so-called "greenhouse gases"
such as carbon dioxide, a by-product of burning fossil fuels. Certain Columbia
affiliates engage in efforts to voluntarily report and reduce their greenhouse
gas emissions. Columbia will monitor and participate in developments related to
efforts to register and potentially regulate greenhouse gas emissions.

Certain Columbia affiliates use various combustion equipment in the generation,
distribution and transmission of energy, including turbines and various
reciprocating engines. Within the period December 2002 to January 2003, U.S.
Environmental Protection Agency proposed maximum achievable control technology
(MACT) standards to meet national emission standards for hazardous air
pollutants for stationary combustion turbines and reciprocating internal
combustion engines. Columbia will continue to monitor the proposed MACT
standards for potential applicability and cost impact to its operations. Pending
finalization of the proposed standards, Columbia is unable to predict what, if
any, additional compliance costs may result.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Omitted pursuant to General Instruction H(2)(c).


ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
Columbia's president and chief executive officer and its principal financial
officer, after evaluating the effectiveness of Columbia's disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c)) on May
6, 2003, have concluded that, as of such date, Columbia's disclosure controls
and procedures were adequate and effective to ensure that material information
relating to Columbia and its consolidated subsidiaries would be made known to
them by others within those entities.

Changes in Internal Controls
There were no significant changes in Columbia's internal controls or in other
factors that could significantly affect Columbia's disclosure controls and
procedures subsequent to the date of their evaluation, nor were there any
significant deficiencies or material weaknesses in Columbia's internal controls.
As a result, no corrective actions were required or undertaken.




                                       16

<PAGE>
                                     PART II

ITEM 1.  LEGAL PROCEEDINGS

COLUMBIA ENERGY GROUP AND SUBSIDIARIES

1.       CANADA SOUTHERN PETROLEUM LTD. V. COLUMBIA GAS DEVELOPMENT OF CANADA
         LTD.
         This action was originally filed March 7, 1990. The plaintiffs
         asserted, among other things, that the defendant working interest
         owners, including Columbia Gas Development of Canada Ltd. (Columbia
         Canada) and various Amoco affiliates, breached an alleged fiduciary
         duty to ensure the earliest feasible marketing of gas from the
         `Kotaneelee field (Yukon Territory, Canada). The plaintiffs sought,
         among other remedies, the return of the defendants' interests in the
         Kotaneelee field to the plaintiffs, a declaration that such interests
         are held in trust for the plaintiffs and an order requiring the
         defendants to promptly market Kotaneelee gas or assessing damages.

         In November 1993, the plaintiffs amended their Amended Statement of
         Claim to include allegations that the balance in the Carried Interest
         Account (an account for operating costs, which are recoverable, by
         working interest owners), which is in excess of the balance as of
         November 1988, should be reduced to zero. Columbia Canada consented to
         the amendment in consideration of the plaintiffs' acknowledgment that
         approximately $63 million was properly charged to the account.

         Pursuant to an Indemnification Agreement regarding the Kotaneelee
         Litigation entered into when Columbia Canada was sold to Anderson
         Exploration Ltd. (Anderson), Columbia agreed to indemnify and hold
         Anderson harmless for losses due to this litigation arising out of
         actions occurring prior to December 31, 1991. An escrow account
         provides security for the indemnification obligation and is funded by a
         letter of credit with a face amount of approximately $35,835,000 (Cdn).

         A trial commenced in the third quarter of 1996 in the Court of Queen's
         Bench for the Province of Alberta and judgment was issued in September
         2001. The court dismissed most of the plaintiffs' claims, including the
         fiduciary duty claim, but did order a reduction of the Carried Interest
         Account in the amount of $5.3 million (Cdn.) and ordered that the
         defendants were not entitled to charge the plaintiffs processing fees.
         The inability to charge the plaintiffs processing fees does not affect
         Columbia. The monetary value of these two items has not been
         determined. The plaintiffs have filed an appeal of the judgment. The
         Court set a hearing date of December 1, 2, and 3, 2003; however, an
         earlier hearing may be possible.

2.       UNITED STATES OF AMERICA EX REL. JACK J. GRYNBERG V. COLUMBIA GAS
         TRANSMISSION CORP., ET AL.
         Plaintiff originally filed a complaint under the False Claims Act, on
         behalf of the United States of America, against approximately seventy
         pipelines. Plaintiff claimed that the defendants had submitted false
         royalty reports to the government (or caused others to do so) by
         mismeasuring the volume and heating content of natural gas produced on
         Federal land and Indian lands. Plaintiff's original complaint was
         dismissed without prejudice for misjoinder of parties and for failing
         to plead fraud with specificity. In 1997, plaintiff then filed over
         sixty-five new False Claims Act complaints against over 330 defendants
         in numerous Federal courts. One of those complaints was filed in the
         Federal District Court for the Eastern District of Louisiana against
         Columbia and thirteen affiliated entities. Plaintiff's second complaint
         repeats the mismeasurement claims previously made and adds valuation
         claims alleging that the defendants have undervalued natural gas for
         royalty purposes in various ways, including by making sales to
         affiliated entities at artificially low prices. Most of the Grynberg
         cases were transferred to Federal court in Wyoming in 1999. In December
         1999, the Columbia defendants filed a motion to dismiss plaintiff's
         second complaint primarily based on a failure to plead fraud with
         specificity. In May 2001, the Court denied the Columbia defendants'
         motion to dismiss. The Columbia defendants joined together with
         numerous other defendants and filed a motion requesting the district
         court to amend its order to include a certification so that the
         defendants could request permission from the United States Court of
         Appeals for the Tenth Circuit to appeal a controlling question of law.
         That motion was denied on July 2, 2001. Pretrial proceedings continue.


                                       17
<PAGE>

ITEM 1.  LEGAL PROCEEDINGS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES

3.       PRICE ET AL V. GAS PIPELINES, ET AL.
         Plaintiff filed an amended complaint in Stevens County, Kansas state
         court on September 23, 1999, against over 200 natural gas measurers,
         mostly natural gas pipelines, including Columbia and thirteen
         affiliated entities. The allegations in Price (formerly known as
         Quinque) are similar to those made in Grynberg; however, Price broadens
         the claims to cover all oil and gas leases (other than the Federal and
         Indian leases that are the subject of Grynberg). Price asserts a breach
         of contract claim, negligent or intentional misrepresentation, civil
         conspiracy, common carrier liability, conversion, violation of a
         variety of Kansas statutes and other common law causes of action. Price
         purports to be a nationwide class action filed on behalf of all
         similarly situated gas producers, royalty owners, overriding royalty
         owners, working interest owners and certain state taxing authorities.
         In June 2001, the plaintiff voluntarily dismissed ten of the fourteen
         Columbia entities. Discovery relating to personal jurisdiction has
         begun. On September 12, 2001, the four remaining Columbia defendants
         along with other defendants filed a joint motion to dismiss the amended
         complaint. That motion is currently pending before the court. On April
         10, 2003, the judge denied Plaintiffs motion for class certification.
         The court has issued an order giving the plaintiffs until May 12, 2003
         to file for leave to amend their complaint.

4.       VIVIAN K. KERSHAW ET AL. V. COLUMBIA NATURAL RESOURCES, INC., ET AL.
         In February 2000, plaintiff filed a complaint in New York state court
         against Columbia, Columbia Natural Resources, Inc. (CNR) and Columbia
         Transmission. The complaint alleges that Kershaw owns an interest in an
         oil and gas lease in New York and that the defendants have underpaid
         royalties on the lease by, among other things, failing to base
         royalties on the price at which natural gas is sold to the end user and
         by improperly deducting post-production costs. The complaint also seeks
         class action status on behalf of all royalty owners in oil and gas
         leases operated by CNR. Plaintiff seeks the alleged royalty
         underpayments and punitive damages. CNR and Columbia Transmission
         removed the case to Federal court in March 2000. The Federal court has
         remanded Kershaw back to New York state court. The Columbia defendants'
         motion to dismiss was partially granted and partially denied by the New
         York state court judge on September 24, 2001. On December 3, 2001, the
         defendants filed an answer to the plaintiffs' complaint. Discovery
         regarding class certification is ongoing.

5.       ANTHONY GONZALEZ, ET AL. V. NATIONAL PROPANE CORPORATION, ET AL.
         On December 11, 1997, plaintiffs Anthony Gonzalez, Helen Pieczynski, as
         Special Administrator of the Estate of Edmund Pieczynski, deceased,
         Michael Brown and Stephen Pieczynski filed a multiple-count complaint
         for personal injuries in the Circuit Court of Cook County, Illinois
         against National Propane Corporation and the Estate of Edmund
         Pieczynski sounding in strict tort liability and negligence. National
         Propane Corporation was acquired by Columbia in 1999, and this
         litigation was retained by Columbia when Columbia sold its propane
         operations in 2001. Plaintiff's complaint arises from an explosion and
         fire, which occurred in a Wisconsin vacation cottage in 1997. National
         Propane, L.P. filed a third-party complaint for contribution against
         Natural Gas Odorizing and Phillips Petroleum Company. This matter has
         been resolved through a settlement.

6.       ATLANTIGAS CORPORATION V. NISOURCE, INC., ET AL, U.S. DISTRICT COURT,
         DISTRICT OF COLUMBIA AND TRIAD ENERGY RESOURCES, ET AL. V. NISOURCE
         INC., ET AL. U.S. DISTRICT COURT, DISTRICT OF COLUMBIA
         In June 2002, Atlantigas Corporation filed a complaint alleging that
         NiSource, certain of its subsidiaries and other defendants illegally
         discounted services to select shippers and sought damages under
         anti-trust, RICO, and state law totaling $18 million ($54 million if
         trebled). The activities about which the plaintiff is complaining were
         the subject of a FERC enforcement staff investigation and subsequent
         settlement approved in October 2000. NiSource and its affiliates filed
         a motion to dismiss the complaint for lack of personal jurisdiction and
         oral argument on that motion was held on April 8. At the hearing,
         plaintiff's counsel raised some new issues on personal jurisdiction.
         The judge established a supplemental briefing schedule for these
         issues, which concludes on May 30.


                                       18
<PAGE>
ITEM 1.  LEGAL PROCEEDINGS (continued)

COLUMBIA ENERGY GROUP AND SUBSIDIARIES

         On March 18, 2003, a related suit was filed by Triad Energy Resources.
         This new case purports to be a class action covering customers of
         Columbia Gas Transmission who were allegedly damaged by the same
         activities complained of in the Atlantigas litigation. The named
         defendants include NiSource Inc., certain of its subsidiaries and other
         unrelated parties, including shippers who allegedly benefited from the
         complained of activities. The plaintiffs claim that all defendants
         engaged in vertical restraint of trade by conspiring to provide scarce
         transportation/storage capacity to a select group of shippers who in
         turn agreed to fix the price of gas. The plaintiffs also claim that the
         defendant shippers engaged in horizontal restraint of trade by
         conspiring with each other to gain preferential treatment from the
         pipeline defendants. There is also a separate count alleging tortious
         interference against all defendants. The Company intends to vigorously
         defend this matter. However, due to the relationship between this case
         and the Atlantigas case, all responses in this matter are deferred
         until the court rules on the jurisdictional motions pending in
         Atlantigas.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

Omitted pursuant to General Instruction H(2)(b)


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Omitted pursuant to General Instruction H(2)(b)


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Omitted pursuant to General Instruction H(2)(b)


ITEM 5.  OTHER INFORMATION

None


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         (12)     Statements of Ratio of Earnings to Fixed Charges (filed
                  herewith).

         (99.1)   Certification of Michael W. O'Donnell, Chief Executive
                  Officer, pursuant to 18 U.S.C. Section 1350, as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                  (filed herewith).

         (99.2)   Certification of David J. Vajda, Principal Financial Officer,
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002 (filed
                  herewith).

(b)      Reports on Form 8-K

         There were no reports on Form 8-K filed during the first quarter 2003.



                                       19


<PAGE>

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.












                                                  Columbia Energy Group
                                         ---------------------------------------
                                                      (Registrant)












Date:  May 12, 2003                By:           /s/ Jeffrey W. Grossman
                                         ---------------------------------------
                                                   Jeffrey W. Grossman
                                                     Vice President
                                              (Principal Accounting Officer
                                              and Duly Authorized Officer)




<PAGE>

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael W. O'Donnell, certify that:

     1.  I have reviewed this quarterly report on Form 10-Q of Columbia Energy
         Group;

     2.  Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

     3.  Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operation and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

     4.  The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a)   Designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              quarterly report is being prepared;

         b)   Evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

         c)   Presented in this quarterly report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

     5.  The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)   All significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

         b)   Any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

     6.  The registrant's other certifying officers and I have indicated in this
         quarterly report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.




Date:  May 12, 2003              By:             /s/ Michael W. O'Donnell
                                        -------------------------------------
                                                   Michael W. O'Donnell
                                           President and Chief Executive Officer



                                       21
<PAGE>

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David Vajda, certify that:

     1.  I have reviewed this quarterly report on Form 10-Q of Columbia Energy
         Group;

     2.  Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

     3.  Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operation and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

     4.  The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a)   Designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              quarterly report is being prepared;

         b)   Evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

         c)   Presented in this quarterly report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

     5.  The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)   All significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

         b)   Any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

     6.  The registrant's other certifying officers and I have indicated in this
         quarterly report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.





Date:  May 12, 2003              By:                /s/ David J. Vajda
                                          -------------------------------------
                                                      David J. Vajda
                                                Principal Financial Officer



                                       22