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 June 30, 1998
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 1-7297
NICOR INC.
(Exact name of registrant as specified in its charter)
Illinois 36-2855175
(State of incorporation) (I.R.S. Employer
Identification No.)
1844 Ferry Road
Naperville, Illinois 60563-9600
(Address of principal (Zip Code)
executive offices)
(630) 305-9500
(Registrant's telephone number)
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 $2.50, outstanding at July 31, 1998, were
47,751,217.
Nicor Inc. Page i
Table of Contents
Page
Part I. Financial Information
Item 1. Financial Statements (Unaudited) 1
Consolidated Statement of Income -
Three, Six and Twelve Months Ended
June 30, 1998 and 1997 2
Consolidated Statement of Cash Flows -
Six and Twelve Months Ended
June 30, 1998 and 1997 3
Consolidated Balance Sheet -
June 30, 1998 and 1997, and
December 31, 1997 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 4. Submission of Matters to a Vote of
Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
Exhibit Index 16
Selected Terms:
Ill.C.C. - Illinois Commerce Commission.
Mcf, Bcf - Thousand cubic feet, billion cubic feet.
TEU - Twenty-foot equivalent unit.
Degree days - The extent to which the daily average
temperature falls below 65 degrees
Fahrenheit.
Nicor Inc. Page 1
PART I - Financial Information
Item 1. Financial Statements
The following condensed unaudited financial statements of
Nicor Inc. 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. Because of seasonal and other factors, the
results for the interim periods presented are not necessarily
indicative of the results to be expected for the full fiscal year.
<TABLE>
Nicor Inc. Page 2
Consolidated Statement of Income (Unaudited)
(Millions, except per share data)
<CAPTION>
Three months ended Six months ended Twelve months ended
June 30 June 30 June 30
1998 1997 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C> <C>
Operating revenues $ 271.3 $ 303.7 $ 833.6 $1,203.7 $1,622.6 $2,017.0
Operating expenses
Cost of gas 96.1 122.8 414.3 755.7 822.8 1,198.5
Operating and maintenance 82.1 81.9 164.2 162.6 341.9 336.2
Depreciation 23.6 23.0 77.0 75.2 133.1 129.8
Taxes, other than income taxes 20.6 23.4 64.2 84.4 107.0 127.7
222.4 251.1 719.7 1,077.9 1,404.8 1,792.2
Operating income 48.9 52.6 113.9 125.8 217.8 224.8
Other income (expense)
Interest income .7 1.2 1.2 1.7 2.5 2.3
Other, net 4.2 1.2 7.3 2.9 17.7 6.7
4.9 2.4 8.5 4.6 20.2 9.0
Income before interest on debt
and income taxes 53.8 55.0 122.4 130.4 238.0 233.8
Interest on debt, net of
amounts capitalized 10.4 10.5 23.5 23.8 48.8 49.3
Income before income taxes 43.4 44.5 98.9 106.6 189.2 184.5
Income taxes 14.9 15.8 34.2 37.4 65.8 65.1
Net income 28.5 28.7 64.7 69.2 123.4 119.4
Dividends on preferred stock .1 - .2 .2 .3 .3
Earnings applicable to
common stock $ 28.4 $ 28.7 $ 64.5 $ 69.0 $ 123.1 $ 119.1
Average shares of
common stock
Basic 47.9 48.8 48.0 49.1 48.2 49.4
Diluted 48.2 49.0 48.2 49.2 48.4 49.6
Earnings per average share
of common stock
Basic $ .59 $ .59 $ 1.34 $ 1.41 $ 2.55 $ 2.41
Diluted .59 .58 1.34 1.40 2.54 2.40
Dividends declared per share
of common stock $ .37 $ .35 $ .74 $ .70 $ 1.44 $ 1.36
<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
Nicor Inc. Page 3
Consolidated Statement of Cash Flows (Unaudited)
(Millions)
<CAPTION>
Six months ended Twelve months ended
June 30 June 30
1998 1997 1998 1997
Operating activities
<S> <C> <C> <C> <C>
Net income $ 64.7 $ 69.2 $ 123.4 $ 119.4
Adjustments to reconcile net income to net cash flow
provided from operating activities:
Depreciation 77.0 75.2 133.1 129.8
Deferred income tax expense (benefit) 9.4 (6.3) 1.4 6.0
Change in working capital items and other:
Receivables, less allowances 193.1 162.7 15.8 (6.6)
Gas in storage 111.6 104.0 11.4 6.0
Deferred/accrued gas costs (8.1) 83.4 (15.3) 65.5
Accounts payable (11.5) (83.7) (19.8) 7.8
Temporary LIFO liquidation 24.2 56.6 (32.4) 44.6
Other (41.2) 2.7 (51.1) (15.8)
Net cash flow provided from operating activities 419.2 463.8 166.5 356.7
Investing activities
Capital expenditures (52.7) (46.8) (118.9) (113.9)
Short-term investments (5.7) (12.3) (.9) (13.8)
Other (7.6) (4.9) (1.2) (4.8)
Net cash flow used for investing activities (66.0) (64.0) (121.0) (132.5)
Financing activities
Net proceeds from issuing long-term debt 99.1 49.7 148.5 124.0
Disbursements to retire long-term debt (104.5) (25.0) (157.1) (25.0)
Short-term borrowings (repayments), net (278.9) (292.0) - (118.2)
Dividends paid (34.8) (33.7) (68.9) (66.9)
Disbursements to reacquire stock (17.0) (30.6) (35.8) (61.4)
Other (.1) - 1.3 5.4
Net cash flow used for financing activities (336.2) (331.6) (112.0) (142.1)
Net increase (decrease) in cash and cash equivalents 17.0 68.2 (66.5) 82.1
Cash and cash equivalents, beginning of period 5.2 20.5 88.7 6.6
Cash and cash equivalents, end of period $ 22.2 $ 88.7 $ 22.2 $ 88.7
Supplemental information
Income taxes paid, net of refunds $ 23.1 $ 25.5 $ 63.9 $ 61.6
Interest paid, net of amounts capitalized 25.4 24.3 51.6 47.5
<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
Nicor Inc. Page 4
Consolidated Balance Sheet (Unaudited)
(Millions)
<CAPTION>
June 30 December 31 June 30
Assets 1998 1997 1997
Current assets
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 22.2 $ 5.2 $ 88.7
Short-term investments, at cost which approximates market 25.9 20.2 25.0
Receivables, less allowances of $8.4,
$8.6 and $10.8, respectively 161.5 354.6 177.3
Gas in storage, at last-in, first-out (LIFO) cost 16.2 127.8 14.2
Other 29.2 27.0 20.4
255.0 534.8 325.6
Property, plant and equipment, at cost
Gas distribution 3,066.9 3,026.8 2,993.6
Shipping 244.1 240.4 236.5
Other .8 .5 .6
3,311.8 3,267.7 3,230.7
Less accumulated depreciation 1,602.0 1,531.9 1,489.2
1,709.8 1,735.8 1,741.5
Other assets 151.4 124.0 102.8
$ 2,116.2 $ 2,394.6 $ 2,169.9
Liabilities and Capitalization
Current liabilities
Long-term obligations due within one year $ 25.5 $ 25.4 $ 25.0
Short-term borrowings - 278.9 -
Accounts payable 232.6 241.9 250.2
Temporary LIFO liquidation 24.2 - 56.6
Accrued gas costs 17.0 25.1 32.3
Other 41.2 50.3 39.6
340.5 621.6 403.7
Deferred credits and other liabilities
Deferred income taxes 228.3 214.9 215.2
Regulatory income tax liability 80.1 81.7 82.6
Unamortized investment tax credits 45.2 46.2 47.3
Other 106.7 129.6 136.2
460.3 472.4 481.3
Capitalization
Long-term debt 551.2 550.2 543.3
Preferred stock
Redeemable 6.2 6.3 6.2
Nonredeemable .1 .1 .1
Common equity
Common stock 119.6 120.5 121.6
Retained earnings 638.3 623.5 613.7
1,315.4 1,300.6 1,284.9
$ 2,116.2 $ 2,394.6 $ 2,169.9
<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
Nicor Inc. Page 5
Notes to the Consolidated Financial Statements (Unaudited)
ACCOUNTING POLICIES
Depreciation. Depreciation for the gas distribution segment 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.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, Accounting for Derivative Instruments and Hedging Activities. This
statement requires that an entity recognize all derivatives as either assets
or liabilities in the statement of financial position and measure those
instruments at fair value. Gains or losses resulting from changes in the
values of those derivatives are to be accounted for depending on the use of
the derivative and whether it qualifies for hedge accounting. This
statement requires adoption no later than the first quarter of the company's
2000 fiscal year and must be adopted as a cumulative effect of a change in
accounting principle. Implementation of this statement is not expected to
have a material impact on the company's financial condition or results of
operations.
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use. This statement provides guidance on
accounting for the costs of computer software developed or obtained for
internal use and is required to be adopted no later than the company's 1999
fiscal year. The company plans to modify its method of capitalization of
such costs by adopting this statement prospectively on January 1, 1999. The
company is currently evaluating this statement but does not expect it to
have a material impact on its financial condition or results of operations.
LONG-TERM DEBT
In June 1998, Nicor Gas issued $50 million of 5-3/4% First Mortgage Bonds
due in 2003. The net proceeds from the sale, together with the proceeds
from the February 1998 sale of $50 million of 6.58% First Mortgage Bonds due
in 2028 and other corporate funds, replenished funds used for the March 1998
redemption of $75 million of 8-1/4% First Mortgage Bonds due in 2022 and the
February 1998 maturity of $25 million of 5-7/8% First Mortgage Bonds.
Nicor Inc. Page 6
Notes to the Consolidated Financial Statements (Unaudited)
(Concluded)
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 Ill.C.C. authorization, the company has
been recovering these costs from its customers.
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 Inc. Page 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
OVERVIEW
The following discussion should be read in conjunction with the Management's
Discussion and Analysis section of the Nicor 1997 Annual Report on
Form 10-K.
Nicor's second quarter 1998 diluted earnings per common share were $.59
compared with $.58 a year ago despite the negative impact on gas
distribution operating results of weather that was 40 percent warmer than
the prior-year period. Positive factors included a reduction in operating
and maintenance expenses in the gas distribution segment, a significant
increase in deliveries of natural gas for electric power generation and
improved operating results in the shipping segment. Favorable nonoperating
factors included additional gains on real estate sales and the impact of a
stock repurchase program. Net income for the quarter was $28.5 million
compared with $28.7 million in 1997.
Diluted earnings per common share for the six months ended June 30, 1998,
were $1.34 compared with $1.40 a year ago. Related net income was $64.7
million compared with $69.2 million in 1997. Weather in the first half of
1998 was 22 percent warmer than in the prior year, but the impact on financial
results was partially offset by the previously mentioned positive factors.
Diluted earnings per common share for the twelve months ended June 30, 1998,
rose to $2.54 from $2.40 a year ago. Related net income was $123.4 million
compared with $119.4 million. The positive factors noted above more than
offset the negative impact of weather that was 16 percent warmer than in the
prior year.
Operating income (loss) for the periods ended June 30 by business segment
was (millions):
Three months Six months Twelve months
1998 1997 1998 1997 1998 1997
Gas distribution $ 43.7 $ 48.0 $103.2 $116.4 $197.0 $208.4
Shipping 6.0 5.7 12.4 11.3 26.4 21.0
Corporate and other (.8) (1.1) (1.7) (1.9) (5.6) (4.6)
$ 48.9 $ 52.6 $113.9 $125.8 $217.8 $224.8
Nicor Inc. Page 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
The following summarizes operating income comparisons by business segment:
- - Gas distribution operating income decreased $4.3 million, $13.2
million and $11.4 million for the three-, six- and twelve-month
periods, respectively, due to the negative impact of significantly
warmer weather. Positive factors included a reduction in operating
and maintenance expenses and a significant increase in deliveries of
natural gas for electric power generation.
- - Shipping operating income increased $.3 million, $1.1 million and
$5.4 million for the three-, six- and twelve-month periods,
respectively, due primarily to higher volumes shipped.
RESULTS OF OPERATIONS
Details of various financial and operating information by segment can be
found in the tables on pages 11 and 12. The following summarizes the major
changes in Nicor's revenues and expenses.
Operating revenues decreased $32.4 million, $370.1 million and $394.4
million for the three-, six- and twelve-month periods, respectively, due
primarily to lower revenues in the gas distribution segment. For the three-
month period, the decrease in the gas distribution segment was attributable
to lower deliveries of natural gas due to the impact of significantly warmer
weather. For the six- and twelve-month periods, the decrease in the gas
distribution segment was due to lower natural gas supply costs, which are
passed through to customers, and lower deliveries of natural gas due to the
impact of significantly warmer weather.
Gas distribution margin, defined as operating revenues less cost of gas and
revenue taxes, which are both passed directly through to customers, is shown
in the following table for the periods ended June 30. Margin decreased in
all periods due to the impact of warmer weather. The increase in margin per
Mcf delivered was due, in part, to the impact of a reduction in lower-margin
deliveries due to warmer weather.
Three months Six months Twelve months
1998 1997 1998 1997 1998 1997
Gas distribution
margin (Millions) $103.4 $109.1 $251.7 $268.7 $479.0 $495.5
Margin per Mcf
delivered 1.17 1.12 .91 .86 .94 .91
Nicor Inc. Page 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Operating and maintenance expenses increased in each period due primarily to
higher volume-related costs in the shipping segment and an increase in
expenses related to another unregulated Nicor venture which more than offset
lower costs in the gas distribution segment. Operating and maintenance
expenses in the gas distribution segment decreased in each period due
primarily to lower retirement benefits costs, resulting principally from
favorable pension fund investment returns, and a reduction in the provision
for uncollectible accounts related to lower operating revenues.
Other income increased $2.5 million, $3.9 million and $11.2 million for the
three-, six- and twelve-month periods, respectively, due primarily to
additional gains on real estate sales.
The company's periodic review of its discontinued operations reserve
indicates that no adjustment to the reserve is presently appropriate.
FINANCIAL CONDITION
Net cash flow from operating activities decreased $44.6 million and
$190.2 million for the six- and twelve-month periods, respectively, due
primarily to changes in working capital items in the gas distribution
segment. The working capital component of net cash flow from operating
activities can swing sharply due primarily to certain gas distribution
factors including weather, 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.
The company has committed a total of $22 million to two investments. In
one transaction, Nicor will invest an additional $10 million in a low income
housing tax credit fund. In another transaction, $12 million will be used
to expand the company's equity interest in a cargo container leasing
business.
Nicor and its gas distribution subsidiary maintain short-term credit
agreements with major domestic and foreign banks. At June 30, 1998, these
agreements, which serve as backup for the issuance of commercial paper,
totaled $280 million. The company had no outstanding commercial paper at
June 30, 1998.
In June 1998, Nicor Gas issued $50 million of 5-3/4% First Mortgage Bonds
due in 2003. The net proceeds from the sale, together with the proceeds
from the February 1998 sale of $50 million of 6.58% First Mortgage Bonds due
in 2028 and other corporate funds, replenished funds used for the March 1998
redemption of $75 million of 8-1/4% First Mortgage Bonds due in 2022 and the
February 1998 maturity of $25 million of 5-7/8% First Mortgage Bonds.
Under an existing common stock repurchase program, Nicor purchased and
retired 389,000 common shares during the first six months of 1998 at an
aggregate cost of $15.8 million.
Effective with the dividend paid on May 1, 1998, Nicor's quarterly dividend
on common stock was increased 5.7 percent to 37 cents per share.
Nicor Inc. Page 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
OTHER
Strategic Alliance. In July 1998, Nicor and Houston-based Dynegy Inc.
(formerly NGC Corporation) announced the formation of a strategic alliance
to jointly pursue wholesale generation and cogeneration power projects,
including such projects as new power plant construction and acquisition of
power generation assets. The alliance will focus on six states in the
Midwest: Illinois, Wisconsin, Indiana, Iowa, Minnesota and Missouri.
Potential customers include industrial businesses, utilities and
municipalities. This alliance is the second between Nicor and Dynegy.
The companies are already partners in Nicor Energy L.L.C., a provider of
unregulated energy products and services to customers in the Midwest.
Viking Voyageur Pipeline Project. In April 1998, Northern States Power
announced its withdrawal from the Viking Voyageur Pipeline project citing
the project's inability to obtain adequate commitment from producers. This
event did not have a material impact on the company's financial condition or
results of operations. Nicor and TransCanada Pipelines continue to be
committed to evaluating options that will meet the growing needs of the
Midwest market.
New Accounting Pronouncements. In June 1998, the Financial Accounting
Standards Board issued Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities. In March 1998, the American Institute
of Certified Public Accountants issued Statement of Position 98-1,
Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use. These statements are not expected to have a material impact
on the company's financial condition or results of operations. For further
information, see New Accounting Pronouncements on page 5.
<TABLE>
Nicor Inc. Page 11
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
OPERATING STATISTICS
Gas Distribution
Changes in weather can materially affect operating results. Operating revenues, deliveries, weather statistics
and other data are presented below.
<CAPTION>
Three months ended Six months ended Twelve months ended
June 30 June 30 June 30
1998 1997 1998 1997 1998 1997
Operating revenues (Millions):
Sales
<S> <C> <C> <C> <C> <C> <C>
Residential $ 136.5 $ 148.4 $ 466.2 $ 683.0 $ 909.1 $1,123.9
Commercial 31.3 39.8 120.9 198.7 237.0 317.3
Industrial 5.0 11.2 18.6 39.6 35.8 63.6
172.8 199.4 605.7 921.3 1,181.9 1,504.8
Transportation
Commercial 11.5 11.0 28.3 29.2 54.5 54.0
Industrial 8.5 10.3 19.0 24.1 43.3 48.4
20.0 21.3 47.3 53.3 97.8 102.4
Revenue taxes and other 22.0 23.3 66.1 89.3 106.0 129.7
$ 214.8 $ 244.0 $ 719.1 $1,063.9 $1,385.7 $1,736.9
Deliveries (Bcf):
Sales
Residential 25.8 35.0 113.7 141.7 205.2 238.0
Commercial 6.2 10.1 29.0 41.2 53.0 67.1
Industrial 1.2 4.1 4.9 9.1 8.7 15.7
33.2 49.2 147.6 192.0 266.9 320.8
Transportation
Commercial 10.0 10.1 36.1 38.4 63.7 66.7
Industrial 44.9 37.9 93.1 81.7 179.4 157.0
54.9 48.0 129.2 120.1 243.1 223.7
88.1 97.2 276.8 312.1 510.0 544.5
Average gas cost per Mcf sold $ 2.90 $ 2.30 $ 2.80 $ 3.69 $ 3.03 $ 3.46
Weather statistics:
Degree days 532 893 3,105 3,995 5,364 6,420
Percent colder (warmer) than normal (22.7) 29.8 (19.3) 3.8 (12.3) 5.0
Customers at end of period (Thousands):
Sales
Residential 1,718.6 1,690.9
Commercial 125.2 141.0
Industrial 9.0 11.4
1,852.8 1,843.3
Transportation
Commercial 36.9 18.6
Industrial 5.0 2.8
41.9 21.4
1,894.7 1,864.7
</TABLE>
<TABLE>
Nicor Inc. Page 12
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Concluded)
OPERATING STATISTICS (Concluded)
Shipping
<CAPTION>
Three months ended Six months ended Twelve months ended
June 30 June 30 June 30
1998 1997 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C> <C>
Operating revenues (Millions) $ 53.6 $ 50.9 $ 108.7 $ 101.3 $ 220.5 $ 205.3
Operating income (Millions) $ 6.0 $ 5.7 $ 12.4 $ 11.3 $ 26.4 $ 21.0
TEUs shipped (Thousands)
Southbound 28.6 26.1 58.0 51.0 117.0 103.5
Northbound 4.0 3.9 7.2 7.2 14.5 14.7
Interisland 2.1 3.6 5.0 5.8 13.2 10.1
34.7 33.6 70.2 64.0 144.7 128.3
Revenue per TEU $ 1,509 $ 1,460 $ 1,507 $ 1,520 $ 1,483 $ 1,532
Ports served 23 27
Vessels owned 14 14
</TABLE>
Nicor Inc. Page 13
PART II - Other Information
Item 1. Legal Proceedings
For information concerning legal proceedings, see Contingencies in
Notes to the Consolidated Financial Statements on page 6, which is
incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of the company was held on
April 16, 1998, for the purpose of electing the Board of Directors
and approving an amendment to the Articles of Incorporation to
increase the number of authorized shares of common stock. Proxies
for the meeting were solicited pursuant to Section 14(a) of the
Securities Exchange Act of 1934 and there was no solicitation in
opposition to management's solicitation. The results of the voting
as reported below are for shares eligible to vote as of the record
date, February 17, 1998. There were no "broker nonvotes."
All of management's nominees for directors as listed in the proxy
statement were elected as indicated below:
Shares Shares
Voted Voted
NOMINEE FOR WITHHELD
Robert M. Beavers, Jr. 41,049,741 542,213
Bruce P. Bickner 41,005,404 576,336
John H. Birdsall, III 41,034,689 549,615
Thomas A. Donahoe 41,035,834 544,752
Thomas L. Fisher 41,011,810 573,429
John E. Jones 41,011,451 565,703
Dennis J. Keller 41,056,288 532,212
Charles S. Locke 40,996,059 579,362
Sidney R. Petersen 40,986,854 585,153
John Rau 41,041,766 542,614
Patricia A. Wier 41,030,993 552,585
The proposal to approve the amendment to the Articles of
Incorporation to increase the number of authorized shares of common
stock was approved by the following vote:
Shares Shares Shares
Voted Voted Voted
FOR AGAINST ABSTAINING
35,290,498 5,777,680 467,585
Nicor Inc. Page 14
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index on page 16 filed herewith.
(b) The company did not file a report on Form 8-K during the second
quarter of 1998.
Nicor Inc. Page 15
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 Inc.
Date August 12, 1998 By DAVID L. CYRANOSKI
David L. Cyranoski
Senior Vice President,
Secretary and Controller
Nicor Inc. Page 16
Exhibit Index
Exhibit
Number Description of Document
3.01 * Amendment to Articles of Incorporation of the company. (Proxy
Statement dated March 6, 1998, Nicor Inc., Item 2 thereto.)
4.01 * Supplemental Indenture, dated June 1, 1998, of Nicor Gas Company
to Harris Trust and Savings Bank, Trustee, under Indenture dated
as of January 1, 1954. (File No. 1-7296, Form 10-Q for June
1998, Nicor Gas Company, Exhibit 4.01.)
27.01 Financial Data Schedule.
* These exhibits have been previously filed with the Securities and Exchange
Commission and are incorporated herein by reference.
<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,606
<OTHER-PROPERTY-AND-INVEST> 104
<TOTAL-CURRENT-ASSETS> 255
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 151
<TOTAL-ASSETS> 2,116
<COMMON> 120
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 638
<TOTAL-COMMON-STOCKHOLDERS-EQ> 758
6
0
<LONG-TERM-DEBT-NET> 521
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 30
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 26
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 775
<TOT-CAPITALIZATION-AND-LIAB> 2,116
<GROSS-OPERATING-REVENUE> 834
<INCOME-TAX-EXPENSE> 34
<OTHER-OPERATING-EXPENSES> 720
<TOTAL-OPERATING-EXPENSES> 754
<OPERATING-INCOME-LOSS> 80
<OTHER-INCOME-NET> 9
<INCOME-BEFORE-INTEREST-EXPEN> 89
<TOTAL-INTEREST-EXPENSE> 24
<NET-INCOME> 65
0
<EARNINGS-AVAILABLE-FOR-COMM> 65
<COMMON-STOCK-DIVIDENDS> 35
<TOTAL-INTEREST-ON-BONDS> 20
<CASH-FLOW-OPERATIONS> 419
<EPS-PRIMARY> 1.34
<EPS-DILUTED> 1.34
</TABLE>
