UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1999
or
[ ] 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 1-7296
NORTHERN ILLINOIS GAS COMPANY
(Doing business as Nicor Gas Company)
(Exact name of registrant as specified in its charter)
Illinois 36-2863847
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1844 Ferry Road
Naperville, Illinois 60563-9600
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (630) 983-8888
The registrant meets the conditions set forth in General Instruction H(1)(a)
and (b) of Form 10-Q and is therefore filing this Form with a reduced
disclosure format.
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 and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Shares of common stock, par value $5, outstanding at April 30, 1999, were
15,232,414, all of which are owned by Nicor Inc.
Nicor Gas Company Page i
Table of Contents
Page
Part I. Financial Information
Item 1. Financial Statements (Unaudited) ..................... 1
Consolidated Statement of Income -
Three Months Ended March 31, 1999
and 1998 ........................................... 2
Consolidated Statement of Cash Flows -
Three Months Ended March 31, 1999
and 1998 ........................................... 3
Consolidated Balance Sheet -
March 31, 1999 and 1998, and
December 31, 1998 .................................. 4
Notes to the Consolidated Financial Statements ....... 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations ......................................... 7
Part II. Other Information
Item 1. Legal Proceedings .................................... 13
Item 6. Exhibits and Reports on Form 8-K ..................... 13
Signature ............................................ 14
Exhibit Index ........................................ 15
Glossary
Degree day - The extent to which the daily average temperature falls below
65 degrees Fahrenheit.
ICC - Illinois Commerce Commission.
Mcf, Bcf - Thousand cubic feet, billion cubic feet.
Nicor Gas Company Page 1
PART I - Financial Information
Item 1. Financial Statements
The following condensed unaudited financial statements of Nicor Gas have
been prepared by the company pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC). Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to SEC rules and regulations. The condensed financial statements
should be read in conjunction with the financial statements and the notes
thereto included in the company's latest Annual Report on Form 10-K.
The information furnished reflects, in the opinion of the company, all
adjustments (consisting only of normal recurring adjustments) necessary for
a fair statement of the results for the interim periods presented. Results
for the interim periods presented are not necessarily indicative of the
results to be expected for the full fiscal year due to seasonal and other
factors.
<TABLE>
Nicor Gas Company Page 2
Consolidated Statement of Income (Unaudited)
(millions)
<CAPTION>
Three months ended
March 31
1999 1998
<S> <C> <C> <C> <C>
Operating revenues $ 512.6 $ 504.2
Operating expenses
Cost of gas 318.3 318.2
Operating and maintenance 39.1 34.0
Depreciation 51.2 49.5
Taxes, other than income taxes 42.3 42.9
Income taxes 18.8 17.5
469.7 462.1
Operating income 42.9 42.1
Other income (expense)
Other, net .3 1.6
Income taxes on other income (.1) (.6)
.2 1.0
Interest expense
Interest on debt, net of amounts capitalized 10.8 12.3
Other .4 .3
11.2 12.6
Net income 31.9 30.5
Dividends on preferred stock .1 .1
Earnings applicable to common stock $ 31.8 $ 30.4
<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
Nicor Gas Company Page 3
Consolidated Statement of Cash Flows (Unaudited)
(millions)
<CAPTION>
Three months ended
March 31
1999 1998
Operating activities
<S> <C> <C> <C> <C>
Net income $ 31.9 $ 30.5
Adjustments to reconcile net income to net cash flow
provided from operating activities:
Depreciation 51.2 49.5
Deferred income tax expense .7 2.5
Change in assets and liabilities:
Receivables, less allowances (.8) 61.7
Gas in storage 98.4 116.0
Deferred/accrued gas costs 10.0 5.6
Accounts payable (67.6) (31.0)
Temporary LIFO liquidation 67.4 53.6
Other 20.5 (14.4)
Net cash flow provided from operating activities 211.7 274.0
Investing activities
Capital expenditures (20.9) (19.7)
Other - 1.9
Net cash flow used for investing activities (20.9) (17.8)
Financing activities
Net proceeds from issuing long-term debt 99.6 49.4
Disbursements to retire long-term debt (102.7) (104.5)
Short-term borrowings (repayments), net (172.5) (163.0)
Dividends paid (20.2) (31.7)
Net cash flow used for financing activities (195.8) (249.8)
Net increase (decrease) in cash and cash equivalents (5.0) 6.4
Cash and cash equivalents, beginning of period 31.5 -
Cash and cash equivalents, end of period $ 26.5 $ 6.4
Supplemental information
Income taxes paid, net of refunds $ - $ .9
Interest paid, net of amounts capitalized 12.8 32.8
<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
Nicor Gas Company Page 4
Consolidated Balance Sheet (Unaudited)
(millions)
<CAPTION>
March 31 December 31 March 31
1999 1998 1998
Assets
<S> <S> <C> <C> <C>
Gas distribution plant, at cost $ 3,131.8 $ 3,105.2 $ 3,028.3
Less accumulated depreciation 1,545.3 1,487.4 1,429.1
1,586.5 1,617.8 1,599.2
Current assets
Cash and cash equivalents - Affiliates - 29.2 -
- Other 26.5 2.3 6.4
Receivables, less allowances of $8.2,
$6.1 and $8.3, respectively 236.9 236.1 259.7
Gas in storage, at last-in, first-out (LIFO) cost 7.1 105.5 11.8
Other 24.4 23.3 22.3
294.9 396.4 300.2
Other assets 117.4 111.2 97.2
$ 1,998.8 $ 2,125.4 $ 1,996.6
Capitalization and Liabilities
Capitalization
Long-term debt $ 471.1 $ 520.8 $ 471.3
Preferred stock 9.0 9.0 9.5
Common equity
Common stock 76.2 76.1 76.2
Paid-in capital 108.0 108.0 107.9
Retained earnings 500.5 495.1 500.5
1,164.8 1,209.0 1,165.4
Current liabilities
Long-term obligations due within one year 50.5 .5 25.5
Short-term borrowings 42.0 214.5 91.6
Accounts payable 175.3 242.9 183.0
Temporary LIFO liquidation 67.4 - 53.6
Accrued gas costs 39.9 29.9 30.7
Dividends payable 26.4 20.2 27.3
Other 47.8 26.8 39.9
449.3 534.8 451.6
Deferred credits and other liabilities
Deferred income taxes 198.5 196.2 188.1
Regulatory income tax liability 77.6 78.6 81.0
Unamortized investment tax credits 43.6 44.1 45.7
Other 65.0 62.7 64.8
384.7 381.6 379.6
$ 1,998.8 $ 2,125.4 $ 1,996.6
<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
Nicor Gas Company Page 5
Notes to the Consolidated Financial Statements (Unaudited)
ACCOUNTING POLICIES
Depreciation. Depreciation is calculated using a straight-line method for
the calendar year. For interim periods, depreciation is allocated based on
gas deliveries.
Gas in Storage. Gas in storage injections and withdrawals are valued using
the last-in, first-out (LIFO) method on a calendar-year basis. For interim
periods, the difference between current replacement cost and the LIFO cost
for quantities of gas temporarily withdrawn from storage is recorded in cost
of gas as a temporary LIFO liquidation.
REGULATORY MATTERS
In March 1999, Nicor Gas filed a performance-based rate plan for natural gas
supply costs with the ICC. The plan would establish economic incentives for
Nicor Gas when purchasing gas supplies for customers, and amounts above or
below a market benchmark would be shared with customers. The ICC is
required to rule on the proposal by early November and, if approved in a
manner acceptable to Nicor Gas, the company intends to implement the plan
next January.
LONG-TERM DEBT
In January 1999, Nicor Gas sold $50 million of First Mortgage Bonds at 5.37%
due in 2009 and $50 million of unsecured notes at 5.065% due in 2000 to fund
the redemption of First Mortgage Bonds as follows: $50 million at 5.875% due
in 2000 and $50 million at 7.375% due in 2023.
CONTINGENCIES
The company is involved in legal or administrative proceedings before
various courts and agencies with respect to rates, taxes and other matters.
Current environmental laws may require cleanup of certain former
manufactured gas plant sites. To date, Nicor Gas has identified about 40
properties for which it may, in part, be responsible. The majority of these
properties are not presently owned by the company. Information regarding
preliminary site reviews has been presented to the Illinois Environmental
Protection Agency. More detailed investigations and remedial activities are
either in progress or planned at many of these sites. The results of
continued testing and analysis should determine to what extent additional
remediation is necessary and may provide a basis for estimating any
additional future costs which, based on industry experience, could be
significant. In accordance with ICC authorization, the company has been
recovering these costs from its customers.
Nicor Gas Company Page 6
Notes to the Consolidated Financial Statements (Unaudited) (Concluded)
On December 20, 1995, Nicor Gas filed suit in the Circuit Court of Cook
County against certain insurance carriers seeking recovery of environmental
cleanup costs of certain former manufactured gas plant sites. Presently,
management cannot predict the outcome of this lawsuit. Any recoveries from
such litigation or other sources will be flowed back to the company's
customers.
Although unable to determine the outcome of these contingencies, management
believes that appropriate accruals have been recorded. Final disposition of
these matters is not expected to have a material impact on the company's
financial condition or results of operations.
Nicor Gas Company Page 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion should be read in conjunction with the Management's
Discussion and Analysis section of the Nicor Gas 1998 Annual Report on Form
10-K.
RESULTS OF OPERATIONS
Net income for the first quarter of 1999 was $31.9 million compared with
$30.5 million in the first quarter of 1998. The increase was due to higher
deliveries related primarily to 12 percent colder weather, partially offset
by higher operating and maintenance expenses. Deliveries were also affected
by demand growth and the addition of new customers.
Operating revenues. Operating revenues increased $8.4 million in the first
quarter to $512.6 million as the impact of higher deliveries more than
offset lower gas prices, which are passed directly through to customers.
Margin. Margin, defined as operating revenues less cost of gas and revenue
taxes, which are both passed directly through to customers, and margin per
Mcf delivered are shown in the following table:
Three months ended
March 31
1999 1998
Margin (millions) $ 157.2 $ 148.3
Margin per Mcf delivered .77 .79
Margin rose $8.9 million due to increased deliveries related primarily to
colder weather.
Operating and maintenance. Operating and maintenance expenses increased
$5.1 million in the first quarter to $39.1 million due primarily to higher
information technology and bad debt expenses. The company anticipates that
1998's reduction in operating and maintenance expenses may be offset in
1999.
Nonoperating items. Other income decreased due to the prior period's gain
on real estate sales.
Interest expense decreased due to reduced average borrowing levels and
lower interest rates.
Nicor Gas Company Page 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
FINANCIAL CONDITION AND LIQUIDITY
Operating. Net cash flow from operating activities decreased $62.3 million
for the quarter due primarily to changes in working capital items. Working
capital can swing sharply due primarily to certain factors including
weather, the price of gas, the timing of collections from customers and gas
purchasing practices. The company generally relies on short-term financing
to meet temporary increases in working capital needs.
Financing. The company maintains short-term credit agreements with major
domestic and foreign banks. At March 31, 1999, these agreements, which
serve as backup for the issuance of commercial paper, totaled $250 million
and the company had $42 million of commercial paper outstanding.
In January 1999, Nicor Gas sold $50 million of First Mortgage Bonds at 5.37%
due in 2009 and $50 million of unsecured notes at 5.065% due in 2000 to fund
the redemption of First Mortgage Bonds as follows: $50 million at 5.875% due
in 2000 and $50 million at 7.375% due in 2023.
PERFORMANCE-BASED RATE FILING
In March 1999, Nicor Gas filed a performance-based rate plan for natural gas
supply costs with the ICC. For further information see Regulatory Matters
on page 5.
YEAR 2000 READINESS
The Year 2000 issue arose because many existing computer programs use only
the last two digits to refer to a year. If date-sensitive devices
incorrectly read the year 2000 and assume it to be 1900, many computer
systems and software applications, as well as embedded chips, could fail or
produce erroneous results.
This disclosure contains forward-looking statements. In connection with
the Safe Harbor provisions of the Private Securities Litigation Reform Act of
1995, the company cautions that, while it believes such statements to be
reasonable and makes them in good faith, actual results may vary. Nicor Gas'
ability to meet its objectives identified below is dependent upon several
factors, including the timely provision of necessary upgrades and
modifications by suppliers and contractors. In addition, Nicor Gas cannot
guarantee that third parties on whom it depends for essential services will
remediate their critical systems and processes in a timely manner. Each of
the components of the company's Year 2000 project is progressing and the
company believes it is taking all reasonable and appropriate steps necessary
to be able to operate successfully in the year 2000 and beyond. The
following summarizes the company's preparedness for the Year 2000.
Nicor Gas Company Page 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
Nicor Gas has established a company-wide initiative to identify, evaluate
and address Year 2000 issues. A team has been assembled that includes an
officer-level steering committee, full-time staff members and
representatives from key areas of the company. In addition to this team of
employees, the company utilizes consultants to assist in the Year 2000
project and belongs to an industry alliance which facilitates the sharing of
information among companies. The company's Year 2000 effort, which began in
early 1996, encompasses mainframe systems, client-server and desktop
systems, telecommunications, embedded systems and third parties. This
effort consists of the following phases: inventory, assessment, remediation,
testing and contingency planning.
Mainframe Systems. Nicor Gas' mainframe hardware and most core business
applications, which include customer service, billing and payroll, fall into
this category. System inventory, assessment and remediation are complete.
Testing has been conducted on all but the internal payroll system, which is
scheduled to be tested and in production by the end of the second quarter of
1999. A number of systems have been replaced by Year 2000 compliant systems
on client-server platforms. In the second quarter of 1999, the company
plans to perform additional testing of all critical systems at a remote
site. Hardware failure contingency plans have been established and plans to
address possible extended failures of critical software will be developed by
mid-1999.
Client-server and Desktop Systems. Nicor Gas has completed an inventory and
assessment of its client-server and desktop systems. Many of the systems
are new and were designed to be compliant. Remediation and testing are well
underway and are scheduled to be completed by mid-1999. Most functional
areas have already developed contingency plans to perform their
responsibilities in the event of failure. Contingency plans to address
possible longer-term disruptions are scheduled to be completed by the end of
the third quarter of 1999.
Telecommunications. Inventory and assessment of telecommunication issues,
which involve data and voice communications, have also been completed.
Remediation in some areas has been done through upgrading hardware and
software. Further remediation and testing are scheduled to be completed by
mid-1999. Contingency plans exist for many short-duration outages, and by
the end of the third quarter of 1999 the company expects to have addressed
any potentially more severe problems which may occur. In addition to the
telecommunications issues over which it has direct control, the company is
working closely with telecommunication service providers to assist in the
development and execution of additional testing procedures and the
formulation of contingency plans. These efforts are scheduled to be
completed by the end of the third quarter of 1999.
Nicor Gas Company Page 10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
Embedded Systems. The company has performed a system-level inventory of
embedded systems, which include items such as process controls in the
storage and transmission operations, building security, air conditioning,
heating and elevator systems. A more detailed inventory and assessment at
the component level in critical areas has been completed and an independent
verification and validation is presently being performed by outside
consultants. Based on this detailed inventory and assessment, less than
5 percent of the inventoried items appear to require remediation. All such
items have either been remediated or are scheduled for remediation and
testing by mid-1999. In critical gas supply and storage areas, disaster
recovery plans exist and are being updated for various potential Year 2000
scenarios.
Third Parties. Nicor Gas has contacted, through written communication,
entities with which it has a material relationship, such as natural gas
suppliers, pipelines, electric utilities, telecommunication service
providers, banks and other suppliers of goods and services, to determine
their state of readiness. Based on their responses and the results of
ongoing communications, Nicor Gas will consider new business relationships
with alternative providers of products and services as necessary and to the
extent alternatives are available.
In addition to written communications, the company is meeting directly with
interstate pipelines and gas suppliers, upon which the company has
historically been materially dependent, and large industrial customers to
determine their state of readiness. Further communication and meetings are
scheduled to be conducted during the second quarter with other critical
vendors and suppliers. Assessment of these communications and any resulting
necessary actions are scheduled to be completed by mid-1999, with
contingency planning to be completed by the end of the third quarter of
1999.
Costs. Nicor Gas has incurred operating expenses of approximately
$3 million through March 31, 1999, and estimates an additional $3 million to
$4 million will be incurred in connection with its Year 2000 efforts. These
amounts represent costs incurred relating to hardware and software
modifications and replacements, internal information technology resources
devoted solely to the effort, and outside consultants. The company has also
incurred less than $1 million in capital improvement costs to date that
would have been required in the normal course of business, but were incurred
sooner than originally planned. The company estimates that as much as an
additional $2 million in capital improvement costs may be incurred to
support this project. The timing of expenditures is not indicative of
readiness efforts or progress to date.
Risks. The company relies on the producers of natural gas and suppliers of
interstate transportation capacity to deliver natural gas to the company's
distribution system. External infrastructure, such as electric, telephone
and water service, is necessary for the company's basic operations as well
as the operations of many of its customers.
Nicor Gas Company Page 11
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
With respect to Nicor Gas' operations, those over which it has direct
control, the company believes the most significant potential risks involve:
its ability to use electronic devices to control and operate its
distribution system, its ability to respond appropriately to customers'
calls for information and assistance, and its ability to maintain its
internal network of computer systems. The company's Year 2000 project is
designed to concentrate its efforts on these critical areas.
Should any third party with which the company has a material relationship
fail, or should Nicor Gas' actions prove to be less than completely
effective, the impact could become a significant challenge to the company's
ability to operate its distribution system and communicate with its
customers. It could also have a material adverse financial impact,
including but not limited to: lost operating revenues, increased operating
costs and claims from customers related to business interruption. Because
of the uncertainties related to this matter, the company continues to
develop contingency plans.
Contingency Planning. The company's Year 2000 contingency planning
encompasses business continuity both within the company and in the external
business environment. As part of normal business practice, the company
maintains plans to follow during emergencies. For example, many of the
components involved in the gas distribution system can be manually
overridden, and customer calls can be handled at alternate sites. The
company continues to develop contingency plans that will address a variety
of scenarios that could emerge and expects that effort to continue through
1999.
<TABLE>
Nicor Gas Company Page 12
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Concluded)
OPERATING STATISTICS
Changes in weather can materially affect operating results. Operating revenues,
deliveries, customers and other statistics are presented below.
<CAPTION>
Three months ended
March 31
1999 1998
Operating revenues (millions):
Sales
<S> <C> <C> <C> <C>
Residential $ 344.2 $ 329.7
Commercial 76.6 89.5
Industrial 11.8 13.7
432.6 432.9
Transportation
Commercial 23.4 16.8
Industrial 11.8 10.5
35.2 27.3
Revenue taxes and other 44.8 44.0
$ 512.6 $ 504.2
Deliveries (Bcf):
Sales
Residential 100.4 87.9
Commercial 21.2 22.9
Industrial 3.6 3.7
125.2 114.5
Transportation
Commercial 34.1 26.1
Industrial 46.0 48.1
80.1 74.2
205.3 188.7
Customers at end of period (thousands):
Sales
Residential 1,747.7 1,720.4
Commercial 129.7 143.7
Industrial 9.2 11.1
1,886.6 1,875.2
Transportation
Commercial 35.3 19.2
Industrial 4.9 3.1
40.2 22.3
1,926.8 1,897.5
Other statistics:
Degree days (normal 3,159) 2,874 2,573
Colder (warmer) than normal (9)% (19)%
Average gas cost per Mcf sold $ 2.52 $ 2.76
</TABLE>
Nicor Gas Company Page 13
PART II - Other Information
Item 1. Legal Proceedings
For information concerning legal proceedings, see Regulatory Matters on page
5 and Contingencies beginning on page 5, which are incorporated herein by
reference.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index on page 15 filed herewith.
(b) The company did not file a report on Form 8-K during the first
quarter of 1999.
Nicor Gas Company Page 14
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.
Nicor Gas Company
Date May 13, 1999 By DAVID L. CYRANOSKI
David L. Cyranoski
Senior Vice President,
Secretary and Treasurer
Nicor Gas Company Page 15
Exhibit Index
Exhibit
Number Description of Document
12.01 Computation of Consolidated Ratio of Earnings to Fixed Charges.
27.01 Financial Data Schedule.
<TABLE>
Nicor Gas Company
Form 10-Q
Exhibit 12.01
Nicor Gas Company
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(thousands)
<CAPTION>
Twelve
Months Ended
March 31, Year Ended December 31
1999 1998 1997 1996 1995 1994
Earnings available to cover fixed charges:
<S> <C> <C> <C> <C> <C> <C>
Net income $ 95,538 $ 94,119 $ 106,922 $ 107,106 $ 85,448 $ 93,078
Add:Income taxes 55,966 55,299 64,714 63,579 49,881 50,958
Fixed charges 43,476 44,870 46,886 46,747 39,400 37,729
Allowance for funds used
during construction (311) (269) (11) (5) (911) (151)
Total $ 194,669 $ 194,019 $ 218,511 $ 217,427 $ 173,818 $ 181,614
Fixed charges:
Interest on debt $ 41,068 $ 42,624 $ 45,246 $ 43,762 $ 38,129 $ 36,726
Other interest charges and
amortization of debt discount,
premium and expense, net 2,408 2,246 1,640 2,985 1,271 1,003
Total $ 43,476 $ 44,870 $ 46,886 $ 46,747 $ 39,400 $ 37,729
Ratio of earnings to fixed charges 4.48 4.32 4.66 4.65 4.41 4.81
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF INCOME, THE CONSOLIDATED BALANCE SHEET AND THE
CONSOLIDATED STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,587
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 295
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 117
<TOTAL-ASSETS> 1,999
<COMMON> 76
<CAPITAL-SURPLUS-PAID-IN> 108
<RETAINED-EARNINGS> 501
<TOTAL-COMMON-STOCKHOLDERS-EQ> 685
8
1
<LONG-TERM-DEBT-NET> 471
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 42
<LONG-TERM-DEBT-CURRENT-PORT> 50
1
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 741
<TOT-CAPITALIZATION-AND-LIAB> 1,999
<GROSS-OPERATING-REVENUE> 513
<INCOME-TAX-EXPENSE> 19
<OTHER-OPERATING-EXPENSES> 451
<TOTAL-OPERATING-EXPENSES> 470
<OPERATING-INCOME-LOSS> 43
<OTHER-INCOME-NET> 0
<INCOME-BEFORE-INTEREST-EXPEN> 43
<TOTAL-INTEREST-EXPENSE> 11
<NET-INCOME> 32
0
<EARNINGS-AVAILABLE-FOR-COMM> 32
<COMMON-STOCK-DIVIDENDS> 26
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 212
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>NICOR GAS IS A WHOLLY OWNED SUBSIDIARY OF NICOR INC. EARNINGS AND DIVIDENDS
PER SHARE INFORMATION IS THEREFORE OMITTED.
</FN>
</TABLE>
