NICOR INC, 10-K405/A, 1998-06-29

NICOR INC
10-K405/A, 1998-06-29
NATURAL GAS DISTRIBUTION

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A
Amendment No. 1

(Mark One)

[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1997
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 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) 305-9500

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each class which registered
Common Stock, par value $2.50 per share, New York Stock Exchange
including Preference Stock purchase rights Chicago Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]

As of February 28, 1998, 48,096,993 common shares were outstanding, and the
aggregate market value of voting securities held by non-affiliates of the
registrant was approximately $2.0 billion.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the company's 1998 Annual Meeting Definitive Proxy Statement,
dated March 6, 1998, are incorporated by reference into Part III.

PURPOSE OF AMENDMENT

This Amendment contains the financial statements of the Nicor Gas Savings
Investment Plan, the Nicor Gas Thrift Plan and the Birdsall, Inc. Retirement
Savings Plan and is being filed pursuant to the provisions of Rule 15d-21 of
the Securities Exchange Act of 1934 in place of separate annual reports
otherwise required to be filed on Form 11-K for employee benefit plans.

Nicor Inc.

Signature

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

Nicor Inc.

Date June 29, 1998 By DAVID L. CYRANOSKI
David L. Cyranoski
Senior Vice President,
Secretary and Controller

Nicor Inc. Page 38

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K

(a) 1) Financial Statements:

See Item 8, Financial Statements and Supplementary Data, on
page 21 filed herewith, for a list of financial statements.

2) Financial Statement Schedules:

Schedule
Number Page

Report of Independent Public Accountants 22
II Valuation and Qualifying Accounts 39

Schedules other than those listed are omitted because they are not
applicable.

3) Exhibits Filed:

See Exhibit Index on pages 41 through 45 filed herewith.

(b) The company did not file a report on Form 8-K during the fourth
quarter of 1997.

Nicor Inc. Page 41

Exhibit Index

Exhibit
Number Description of Document

3.01 * Articles of Incorporation of the company. (File No. 2-55451,
Form S-14, Nicor Inc., Exhibit 1-03 and Exhibit B of Amendment
No. 1 thereto.)

3.02 * Amendment to Articles of Incorporation of the company. (Proxy
Statement dated April 20, 1979, Nicor Inc., Item 3 thereto.)

3.03 * Amendment to Articles of Incorporation of the company. (File
No. 2-68777, Form S-16, Nicor Inc., Exhibit 2-01.)

3.04 * Amendment to Articles of Incorporation of the company. (File
No. 1-7297, Form 10-K for 1985, Nicor Inc., Exhibit 3-03.)

3.05 * Amendment to Articles of Incorporation of the company. (Proxy
Statement dated March 12, 1987, Nicor Inc., Exhibit A and
Exhibit B thereto.)

3.06 * Amendment to Articles of Incorporation of the company. (File
No. 1-7297, Form 10-K for 1992, Nicor Inc., Exhibit 3-06.)

3.07 * Amendments to Articles of Incorporation of the company. (Proxy
Statement dated March 9, 1994, Nicor Inc., Exhibit A-1 and
Exhibit B thereto.)

3.08 * By-Laws of the company as amended by the company's Board of
Directors on May 3, 1995. (File No. 1-7297, Form 10-Q for
March 1995, Nicor Inc., Exhibit 3(ii).01.)

4.01 * Indenture of Commonwealth Edison Company to Continental Illinois
National Bank and Trust Company of Chicago, Trustee, dated as of
January 1, 1954. (File No. 1-7296, Form 10-K for 1995, Nicor
Gas, Exhibit 4.01.)

4.02 * Indenture of Adoption of Nicor Gas to Continental Illinois
National Bank and Trust Company of Chicago, Trustee, dated
February 9, 1954. (File No. 1-7296, Form 10-K for 1995, Nicor
Gas, Exhibit 4.02.)

4.03 * Supplemental Indenture, dated June 1, 1963, of Nicor Gas to
Continental Illinois National Bank and Trust Company of Chicago,
Trustee, under Indenture dated as of January 1, 1954. (File No.
2-21490, Form S-9, Nicor Gas, Exhibit 2-8.)

4.04 * Supplemental Indenture, dated May 1, 1966, of Nicor Gas to
Continental Illinois National Bank and Trust Company of Chicago,
Trustee, under Indenture dated as of January 1, 1954. (File
No. 2-25292, Form S-9, Nicor Gas, Exhibit 2-4.)

Nicor Inc. Page 42

Exhibit Index (continued)

Exhibit
Number Description of Document

4.05 * Supplemental Indenture, dated June 1, 1971, of Nicor Gas to
Continental Illinois National Bank and Trust Company of Chicago,
Trustee, under Indenture dated as of January 1, 1954. (File No.
2-44647, Form S-7, Nicor Gas, Exhibit 2-03.)

4.06 * Supplemental Indenture, dated April 30, 1976, between the company
and Continental Illinois National Bank and Trust Company of
Chicago, Trustee, under Indenture dated as of January 1, 1954.
(File No. 2-56578, Form S-9, Nicor Gas, Exhibit 2-25.)

4.07 * Supplemental Indenture, dated April 30, 1976, of Nicor Gas to
Continental Illinois National Bank and Trust Company of Chicago,
Trustee, under Indenture dated as of January 1, 1954. (File
No. 2-56578, Form S-9, Nicor Gas, Exhibit 2-21.)

4.08 * Supplemental Indenture, dated August 15, 1991, of Nicor Gas to
Continental Bank, National Association, Trustee, under Indenture
dated as of January 1, 1954. (File No. 1-7296, Form 8-K for
August 1991, Nicor Gas, Exhibit 4-01.)

4.09 * Supplemental Indenture, dated July 15, 1992, of Nicor Gas to
Continental Bank, National Association, Trustee, under Indenture
dated as of January 1, 1954. (File No. 1-7296, Form 10-Q for June
1992, Nicor Gas, Exhibit 4-01.)

4.10 * Supplemental Indenture, dated February 1, 1993, of Nicor Gas to
Continental Bank, National Association, Trustee, under Indenture
dated as of January 1, 1954. (File No. 1-7296, Form 10-K for
1992, Nicor Gas, Exhibit 4-17.)

4.11 * Supplemental Indenture, dated May 1, 1993, of Nicor Gas to
Continental Bank, National Association, Trustee, under Indenture
dated as of January 1, 1954. (File No. 1-7296, Form 10-Q for
March 1993, Nicor Gas, Exhibit 4-02.)

4.12 * Supplemental Indenture, dated July 1, 1993, of Nicor Gas to
Continental Bank, National Association, Trustee, under Indenture
dated as of January 1, 1954. (File No. 1-7296, Form 10-Q for
June 1993, Nicor Gas, Exhibit 4-01.)

4.13 * Supplemental Indenture, dated August 15, 1994, of Nicor Gas to
Continental Bank, Trustee, under Indenture dated as of January 1,
1954. (File No. 1-7296, Form 10-Q for September 1994, Nicor Gas,
Exhibit 4.01.)

4.14 * Supplemental Indenture, dated October 15, 1995, of Nicor Gas to
Bank of America Illinois, Trustee, under Indenture dated as of
January 1, 1954. (File No. 1-7296, Form 10-Q for September 1995,
Nicor Gas, Exhibit 4.01.)

Nicor Inc. Page 43

Exhibit Index (continued)

Exhibit
Number Description of Document

4.15 * Supplemental Indenture, dated May 10, 1996, of Nicor Gas to
Harris Trust and Savings Bank, Trustee, under Indenture dated as
of January 1, 1954. (File No. 1-7296, Form 10-Q for June 1996,
Nicor Gas, Exhibit 4.01.)

4.16 * Supplemental Indenture, dated August 1, 1996, of Nicor Gas to
Harris Trust and Savings Bank, Trustee, under Indenture dated as
of January 1, 1954. (File No. 1-7296, Form 10-Q for June 1996,
Nicor Gas, Exhibit 4.02.)

4.17 * Supplemental Indenture, dated June 1, 1997, of Nicor Gas to
Harris Trust and Savings Bank, Trustee, under Indenture dated as
of January 1, 1954. (File No. 1-7296, Form 10-Q for June 1997,
Nicor Gas, Exhibit 4.01.)

4.18 * Shareholder Rights Agreement, dated September 9, 1997, between
the company and Harris Trust and Savings Bank, as Rights Agent.
(File No. 1-7297, Form 8-K for September 1997, Nicor Inc.,
Exhibit 1.)

4.19 * Supplemental Indenture, dated October 15, 1997, of Nicor Gas to
Harris Trust and Savings Bank, Trustee, under Indenture dated as
of January 1, 1954. (File No. 1-7296, Form 10-Q for September
1997, Nicor Gas, Exhibit 4.01.)

4.20 * Supplemental Indenture, dated February 15, 1998, of Nicor Gas to
Harris Trust and Savings Bank, Trustee, under Indenture dated as
of January 1, 1954. (File No. 1-7296, Form 10-K for 1997, Nicor
Gas, Exhibit 4.19.)

Other debt instruments are omitted in accordance with Item
601(b)(4)(iii)(A) of Regulation S-K. Copies of such agreements
will be furnished to the Commission upon request.

10.01 * Security Payment Plan. (File No. 1-7297, Form 10-K for 1980,
Nicor Inc., Exhibit 10-09.)

10.02 * 1984 Nicor Officers' Capital Accumulation Plan Participation
Agreement. (File No. 1-7297, Form 10-K for 1988, Nicor Inc.,
Exhibit 10-10.)

10.02(a)* 1985 Nicor Officers' Capital Accumulation Plan Participation
Agreement. (File No. 1-7297, Form 10-K for 1988, Nicor Inc.,
Exhibit 10-10(a).)

10.03 * 1984 Nicor Directors' Capital Accumulation Plan Participation
Agreement. (File No. 1-7297, Form 10-K for 1983, Nicor Inc.,
Exhibit 10-13.)

Nicor Inc. Page 44

Exhibit Index (continued)

Exhibit
Number Description of Document

10.03(a) * 1985 Nicor Directors' Capital Accumulation Plan Participation
Agreement. (File No. 1-7297, Form 10-K for 1984, Nicor Inc.,
Exhibit 10-13(a).)

10.04 * Directors' Deferred Compensation Plan. (File No. 1-7297,
Form 10-K for 1983, Nicor Inc., Exhibit 10-16.)

10.05 * Directors' Pension Plan. (File No. 1-7297, Form 10-K for 1985,
Nicor Inc., Exhibit 10-18.)

10.06 * Flexible Spending Account for Executives. (File No. 1-7297,
Form 10-K for 1986, Nicor Inc., Exhibit 10-20.)

10.07 * Amendment and Restatement of the Nicor Gas Incentive Compensation
Plan. (File No. 1-7297, Form 10-K for 1986, Nicor Inc.,
Exhibit 10-21.)

10.08 * Nicor Inc. 1989 Long-Term Incentive Plan. (Filed with Nicor Inc.
Proxy Statement, dated April 20, 1989, Exhibit A.)

10.09 * Nicor Gas Supplementary Retirement Plan. (File No. 1-7297,
Form 10-K for 1989, Nicor Inc., Exhibit 10-24.)

10.10 * Nicor Gas Supplementary Savings Plan. (File No. 1-7297,
Form 10-K for 1989, Nicor Inc., Exhibit 10-25.)

10.11 * Nicor Salary Deferral Plan. (File No. 1-7297, Form 10-K for
1989, Nicor Inc., Exhibit 10-29.)

10.12 * 1995 Long-Term Incentive Program. (File No. 1-7297, Form 10-K
for 1994, Nicor Inc., Exhibit 10.17.)

10.13 * 1996 Nicor Incentive Compensation Plan. (File No. 1-7297,
Form 10-K for 1995, Nicor Inc., Exhibit 10.17.)

10.14 * 1996 Nicor Gas Incentive Compensation Plan. (File No. 1-7297,
Form 10-K for 1995, Nicor Inc., Exhibit 10.18.)

10.15 * 1996 Long-Term Incentive Program. (File No. 1-7297, Form 10-K
for 1995, Nicor Inc., Exhibit 10.19.)

10.16 * Nicor Inc. Stock Deferral Plan. (File No. 1-7297, Form 10-Q for
September 1996, Nicor Inc., Exhibit 10.01.)

10.17 * Nicor Inc. 1995 Directors' Stock Plan. (File No. 1-7297,
Form 10-Q for September 1996, Nicor Inc., Exhibit 10.02.)

10.18 * 1997 Nicor Inc. Incentive Compensation Plan. (File No. 1-7297,
Form 10-K for 1996, Nicor Inc., Exhibit 10.17.)

Nicor Inc. Page 45

Exhibit Index (concluded)

Exhibit
Number Description of Document

10.19 * 1997 Nicor Gas Incentive Compensation Plan. (File No. 1-7297,
Form 10-K for 1996, Nicor Inc., Exhibit 10.18.)

10.20 * 1997 Long-Term Incentive Program. (File No. 1-7297, Form 10-Q
for March 1997, Nicor Inc., Exhibit 10.01.)

10.21 * Nicor Inc. 1997 Long-Term Incentive Plan. (Filed as an appendix
to the Nicor Inc. Proxy Statement, dated March 6, 1997.)

10.22 Amendment to Nicor Inc. Stock Deferral Plan.

10.23 1998 Nicor Incentive Compensation Plan.

10.24 1998 Nicor Gas Incentive Compensation Plan.

10.25 1998 Long-Term Incentive Program.

Exhibits 10.01 through 10.25 constitute management contracts and
compensatory plans and arrangements required to be filed as exhibits to this
Form pursuant to Item 14(c) of Form 10-K.

21.01 Subsidiaries.

23.01 Consent of Independent Public Accountants.

23.02 Consent of Independent Public Accountants--Nicor Gas Savings
Investment Plan, Nicor Gas Thrift Plan and Birdsall, Inc.
Retirement Savings Plan.

24.01 Powers of Attorney.

27.01 Financial Data Schedule.

99.01 * Form of Letter to Shareholders relating to Shareholder Rights
Agreement. (File No. 1-7297, Form 8-K for September 1997, Nicor
Inc., Exhibit 2.)

99.02 Financial Statements of the Nicor Gas Savings Investment Plan
for 1997.

99.03 Financial Statements of the Nicor Gas Thrift Plan for 1997.

99.04 Financial Statements of the Birdsall, Inc. Retirement Savings
Plan for 1997.

* These exhibits have been previously filed with the Securities and Exchange
Commission as exhibits to registration statements or to other filings with
the Commission and are incorporated herein as exhibits by reference. The
file number and exhibit number of each such exhibit, where applicable, are
stated, in parentheses, in the description of such exhibit.

Upon written request, the company will furnish free of charge a copy of any
exhibit. Requests should be sent to Investor Relations at the corporate
headquarters.

Nicor Inc.
Form 10-K/A
Exhibit 23.02

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
by reference of our reports on the financial statements of the Nicor Gas
Savings Investment Plan, the Nicor Gas Thrift Plan and the Birdsall, Inc.
Retirement Savings Plan, dated June 26, 1998, included in Nicor Inc.'s
Form 10-K/A, Amendment No. 1, for the year ended December 31, 1997, into the
company's previously filed Form S-3 Registration Statement in connection
with the Nicor Automatic Dividend Reinvestment and Stock Purchase Plan
(No. 33-56871), and Form S-8 Registration Statements in connection with the
Nicor Employee Stock Purchase Plan (No. 33-1732), the Nicor Gas Savings
Investment Plan (No. 33-56867), the Nicor Gas Thrift Plan (No. 33-60689), the
Birdsall, Inc. Retirement Savings Plan (No. 333-28579), the Nicor 1989 Long-
Term Incentive Plan (No. 33-31029) and the Nicor 1997 Long-Term Incentive
Plan (No. 333-28699).

ARTHUR ANDERSEN LLP

Chicago, Illinois
June 26, 1998

Nicor Inc.
Form 10-K/A
Exhibit 99.02

INDEPENDENT AUDITORS' REPORT

To the Nicor Gas Savings Investment
Plan Committee:

We have audited the accompanying statements of net assets available for
benefits, with fund information, of the Nicor Gas Savings Investment Plan
(the Plan) as of December 31, 1997 and 1996, and the related statements of
changes in net assets available for benefits, with fund information, for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan
as of December 31, 1997 and 1996, and the changes in net assets available
for benefits for the years then ended in conformity with generally accepted
accounting principles.

Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The fund information in the
statements of net assets available for benefits and the statements of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets available for
benefits and changes in net assets available for benefits of each fund. The
fund information has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.

ARTHUR ANDERSEN LLP

Chicago, Illinois
June 26, 1998

- 1 -

<TABLE>

Nicor Gas Savings Investment Plan
Statements of Net Assets Available for Benefits, with Fund Information

<CAPTION>
December 31, 1997
Nicor Stated Common Stock International Balanced Small
Stock Fund Return Fund Index Fund Stock Fund Fund Stock Fund Total
Assets:

<S> <C> <C> <C> <C> <C> <C> <C>
Investment in the Trust $ 10,071,716 $ 69,664,204 $ 23,294,159 $ 5,565,800 $ 10,048,138 $ 9,616,220 $128,260,237

Miscellaneous receivable 12,090 23,022 37,998 16,790 22,470 24,676 137,046

Net assets available for benefits$ 10,083,806$ 69,687,226 $ 23,332,157 $ 5,582,590 $ 10,070,608 $ 9,640,896 $128,397,283

December 31, 1996
Nicor Stated Common Stock International Balanced Small
Stock Fund Return Fund Index Fund Stock Fund Fund Stock Fund Total
Assets:

Investment in the Trust $ 9,566,839 $ 73,069,160 $ 16,205,906 $ 6,277,979 $ 7,167,606 $ 6,599,091 $118,886,581

Miscellaneous receivable 27,575 131,031 - - - 107,581 266,187
9,594,414 73,200,191 16,205,906 6,277,979 7,167,606 6,706,672 119,152,768

Liabilities:

Miscellaneous payable 40 547 219,975 24,268 73,205 1,296 319,331

Net assets available for benefits$ 9,594,374$ 73,199,644 $ 15,985,931 $ 6,253,711 $ 7,094,401 $ 6,705,376 $118,833,437

<F1>
The accompanying notes are an integral part of these statements.
</TABLE>

- 2 -

<TABLE>
Nicor Gas Savings Investment Plan
Statements of Changes in Net Assets Available for Benefits, with Fund Information

<CAPTION>
Year ended December 31, 1997
Nicor Stated Common Stock International Balanced Small
Stock Fund Return Fund Index Fund Stock Fund Fund Stock Fund Total
Net increase (decrease) in Plan
assets from investment activities
<S> <C> <C> <C> <C> <C> <C> <C> <C>
of the Trust $ 2,183,063 $ 4,883,167 $ 5,480,834 $ (19,957)$ 1,709,400 $ 1,695,297 $ 15,931,804

Contributions:
Participants 326,626 954,095 831,710 377,431 470,792 565,619 3,526,273
Employer 143,006 394,893 329,223 152,267 194,097 214,913 1,428,399

Distributions to participants (702,533) (7,530,626) (1,475,006) (949,828) (633,576) (783,675) (12,075,244)

Transfers, net (1,460,730) (2,213,947) 2,179,465 (231,034) 1,235,494 1,243,366 752,614

Net increase (decrease) 489,432 (3,512,418) 7,346,226 (671,121) 2,976,207 2,935,520 9,563,846

Net assets available for benefits
at beginning of year 9,594,374 73,199,644 15,985,931 6,253,711 7,094,401 6,705,376 118,833,437

Net assets available for benefits
at end of year $ 10,083,806 $ 69,687,226 $ 23,332,157 $ 5,582,590 $ 10,070,608 $ 9,640,896 $128,397,283

Year ended December 31, 1996
Nicor Stated Common Stock International Balanced Small
Stock Fund Return Fund Index Fund Stock Fund Fund Stock Fund Total
Net increase in Plan assets from
investment activities of the
Trust $ 2,566,434 $ 5,063,075 $ 2,933,700 $ 371,728 $ 888,781 $ 904,497 $ 12,728,215

Contributions:
Participants 333,904 1,150,734 693,010 393,534 426,110 487,986 3,485,278
Employer 147,463 497,799 287,491 157,184 175,765 199,295 1,464,997

Distributions to participants (435,576) (5,257,857) (962,345) (593,372) (750,547) (416,920) (8,416,617)

Transfers, net (31,840) (1,693,231) 460,051 138,892 1,015,721 1,015,778 905,371

Net increase (decrease) 2,580,385 (239,480) 3,411,907 467,966 1,755,830 2,190,636 10,167,244

Net assets available for benefits
at beginning of year 7,013,989 73,439,124 12,574,024 5,785,745 5,338,571 4,514,740 108,666,193

Net assets available for benefits
at end of year $ 9,594,374 $ 73,199,644 $ 15,985,931 $ 6,253,711 $ 7,094,401 $ 6,705,376 $118,833,437

<F1>
The accompanying notes are an integral part of these statements.
</TABLE>

- 3 -

NICOR GAS SAVINGS INVESTMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS

PLAN INFORMATION

In conjunction with the sponsor's name change from Northern Illinois Gas
Company to Nicor Gas Company, the NI-Gas Savings Investment Plan, NI-Gas
Thrift Plan and NI-Gas Savings Investment and Thrift Trust have been
designated as the Nicor Gas Savings Investment Plan, Nicor Gas Thrift Plan
and Nicor Gas Savings Investment and Thrift Trust, respectively.

The following description of the Nicor Gas Savings Investment Plan (the
Plan) provides only general information. Participants should refer to the
Plan agreement for more detailed information.

The Plan. The Plan is a defined contribution plan which was established on
July 1, 1973, to provide supplemental retirement security to substantially
all employees of Nicor Gas Company (the Company), not represented by a
collective bargaining agreement. The funds of the Plan are commingled with
the funds of the Nicor Gas Thrift Plan and held for safekeeping and
investment by the Nicor Gas Savings Investment and Thrift Trust (the Trust).
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).

Plan Administration. Authority to control and manage the operation and
administration of the Plan is vested in a committee appointed by the Board
of Directors of the Company. Under the terms of a trust agreement, the
Northern Trust Company acts as trustee for the Trust and holds the
investments of the Plan. The Northern Trust Company also acts as investment
manager for certain investments of the Plan. Administrative expenses
associated with operation of the Plan are paid from Plan assets.

Contributions. The participant may elect to make either tax-deferred or
after-tax contributions, or any combination thereof, by payroll deduction,
that are partially matched by the Company.

Investment Options. A participant may direct contributions in any of six
investment options.

Nicor Stock Fund. The Nicor Stock Fund offers participants the
opportunity to acquire the common stock of Nicor Inc., the parent company
of Nicor Gas Company. The fund is an Employee Stock Ownership Plan.
Dividends on shares are paid in cash to Plan participants rather than
being reinvested in additional shares.

Stated Return Fund. The Stated Return Fund seeks stability of principal
and competitive returns by investing primarily in group annuity contracts
issued by life insurance companies.

Common Stock Index Fund. The Common Stock Index Fund seeks to earn
investment returns which, over time, approximate those of the Standard &
Poor's 500 Stock Index. The fund invests solely in common stocks of
companies included in that index.

- 4 -

NICOR GAS SAVINGS INVESTMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS (Continued)

PLAN INFORMATION (Concluded)

International Stock Fund. The International Stock Fund seeks to earn
investment returns which, over time, approximate those of the Morgan
Stanley Capital International Europe, Australia and Far East Stock Index.
The fund invests in a large number of common stocks of foreign companies
included in that index.

Balanced Fund. The Balanced Fund invests in a diversified mix of common
stocks and bonds. The fund seeks to achieve a rate of return which
approximates the weighted average returns of a diversified mix of three
indices comprising a cross section of U.S. markets for common stocks and
bonds.

Small Stock Fund. The Small Stock Fund seeks to earn investment returns
which, over time, approximate the returns of small stock indices such as
the Russell 2000 Stock Index and CRSP 6-10 Stock Index. The fund invests
in a diverse group of common stocks of smaller U.S. companies included
within those indices.

The Common Stock Index Fund, International Stock Fund, Balanced Fund and
Small Stock Fund utilize registered investment companies and common/
collective trusts to meet the objectives stated above.

Vesting and Forfeitures. The participant's contributions and earnings
thereon are immediately vested. The Company's contributions and earnings
thereon are vested after the participant's completion of five years of
service, the participant's death while employed by the Company or
retirement.

If the participant's interest in the Company's contributions and earnings
thereon is not vested, such interest will be forfeited if the participant's
employment with the Company or an affiliate is terminated and the
participant is not reemployed within five years by the Company or an
affiliate. Any amounts forfeited by a participant are applied to reduce the
amount of the Company's contributions under the Plan. Forfeitures for 1997
and 1996 totalled $81,890 and $26,938, respectively.

Suspensions and Withdrawals. The participant may suspend contributions by
written notification filed with the Plan administration committee. The
participant will not cease to be a participant during the suspension period.

The participant may elect, under certain conditions, to withdraw participant
contributions and earnings thereon prior to termination of employment. The
Company's matching contributions and earnings thereon will not be
distributed until the vested participant's attainment of age 59-1/2 or
employment has been terminated.

Plan Termination. The Company expects to continue the Plan indefinitely,
but reserves the right to amend or discontinue it at any time subject to the
provisions of ERISA. In the event of plan termination, participants will
become fully vested in their account balances.

- 5 -

NICOR GAS SAVINGS INVESTMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS (Continued)

ACCOUNTING POLICIES

Investment Valuation. The Plan states its investment in the Trust at the
underlying value of the investments of the Trust as follows:

Group annuity contracts are recorded at contract value. Contract value
represents contributions made plus interest at the various contract rates,
less Plan withdrawals and administrative expenses. The aggregate market
value of the group annuity contracts at December 31, 1997 and 1996,
approximated contract value. Estimated market value is based on a variety
of factors, such as contract terms, interest rate, maturity date and credit
worthiness of the issue. For the year ended December 31, 1997 and 1996, the
average return was approximately 7.1 percent and 7.3 percent, respectively.

The market value for Nicor Inc. common stock is based on the closing price
on the New York Stock Exchange Composite Tape.

The market value of the units of the common/collective trusts and registered
investment companies are determined based on the underlying market value of
the investments of the funds.

Allocation Provisions. The Trust's net investment gain is allocated monthly
to the Plan based on the beginning ratio of the Plan's investment balance to
total Trust investments.

Use of Estimates. The preparation of financial statements requires
management to make estimates that affect the reported amounts. Actual
results could differ from those estimates.

INCOME TAXES

The Internal Revenue Service has determined and informed the Company by a
letter dated January 16, 1997, that the Plan is qualified and the Trust
established under the Plan is tax exempt under Section 401(a) of the
Internal Revenue Code (the Code). The Plan's management believes that the
Plan and related Trust continue to be designed and operated in compliance
with the requirements of the Code.

NET TRANSFER FROM NICOR GAS THRIFT PLAN

If an employee transfers between the Plans, their account balance is
transferred into a new account in their current plan. During 1997 and 1996,
a net transfer of $752,614 and $905,371, respectively, was made from the
Nicor Gas Thrift Plan to the Nicor Gas Savings Investment Plan.

- 6 -

NICOR GAS SAVINGS INVESTMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS (Continued)

RECONCILIATION TO FORM 5500

At December 31, 1997 and 1996, the Plan had $1,077,672 and $1,618,705,
respectively, of pending participant distributions. Pending distributions
are recorded as a liability in the Plan's Form 5500; however, they are not
recognized as liabilities in the accompanying financial statements. These
distributions are reflected in the statement of changes in net assets
available for benefits when actually paid.

TRUST FINANCIAL INFORMATION

The following schedules present the Trust's net assets as of December 31,
1997 and 1996, the increase in the Trust net assets derived from investment
activities for the years then ended and the Plan's share of each:

Net Assets in Trust

December 31
1997 1996
Assets

General Investments:
Group annuity contracts $126,065,845 $137,602,036
Common/collective trusts* 54,609,441 47,102,917
Nicor Inc. common stock* 26,313,652 25,273,440
Registered investment companies* 25,885,654 11,177,015
Interest bearing cash 6,384,056 2,080,636

Other assets 5,348,369 164,038

244,607,017 223,400,082
Liabilities

Operating payables 5,147,656 264,439

Net assets in Trust $239,459,361 $223,135,643

Plan's interest in Trust net assets $128,260,237 $118,886,581

* Includes Party-in-Interest Investments.

- 7 -

NICOR GAS SAVINGS INVESTMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS (Concluded)

TRUST FINANCIAL INFORMATION (Concluded)

Trust Investment Activities

Year Ended December 31
1997 1996
Investment income:
Interest $ 9,485,841 $ 10,253,039
Dividends 1,197,270 952,860
Net appreciation in market value
of investments 4,233,500 5,926,190
Net investment gain from common/
collective trusts 13,087,463 6,792,574
Net investment gain from registered
investment companies 1,419,925 1,160,926

29,423,999 25,085,589

Administrative expenses (319,366) (283,470)

Increase in Trust net assets
derived from investment activities $ 29,104,633 $ 24,802,119

Plan's interest in Trust investment
activities $ 15,931,804 $ 12,728,215

- 8 -

Nicor Inc.
Form 10-K/A
Exhibit 99.03

INDEPENDENT AUDITORS' REPORT

To the Nicor Gas Thrift
Plan Committee:

We have audited the accompanying statements of net assets available for
benefits, with fund information, of the Nicor Gas Thrift Plan (the Plan) as
of December 31, 1997 and 1996, and the related statements of changes in net
assets available for benefits, with fund information, for the years then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

ARTHUR ANDERSEN LLP

Chicago, Illinois
June 26, 1998

- 1 -

<TABLE>
Nicor Gas Thrift Plan
Statements of Net Assets Available for Benefits, with Fund Information

<CAPTION>
December 31, 1997
Nicor Stated Common Stock International Balanced Small
Stock Fund Return Fund Index Fund Stock Fund Fund Stock Fund Total
Assets:

Investment in the
<S> <C> <C> <C> <C> <C> <C> <C>
Trust $ 16,227,189 $ 62,080,666 $ 15,427,387 $ 3,276,134 $ 7,184,593 $ 7,003,155 $111,199,124

Miscellaneous
receivable 26,407 75,702 35,139 13,823 19,822 24,104 194,997

Net assets available
for benefits $ 16,253,596 $ 62,156,368 $ 15,462,526 $ 3,289,957 $ 7,204,415 $ 7,027,259 $111,394,121

December 31, 1996
Nicor Stated Common Stock International Balanced Small
Stock Fund Return Fund Index Fund Stock Fund Fund Stock Fund Total
Assets:

Investment in the
Trust $ 16,255,106 $ 65,457,642 $ 9,999,426 $ 3,288,793 $ 4,642,166 $ 4,605,929 $104,249,062

Miscellaneous
receivable 46,284 122,407 - - - 70,180 238,871
16,301,390 65,580,049 9,999,426 3,288,793 4,642,166 4,676,109 104,487,933

Liabilities:

Miscellaneous payable - - 133,844 13,269 44,275 1,311 192,699

Net assets available
for benefits $ 16,301,390 $ 65,580,049 $ 9,865,582 $ 3,275,524 $ 4,597,891 $ 4,674,798 $104,295,234

<F1>
The accompanying notes are an integral part of these statements.
</TABLE>

- 2 -

<TABLE>
Nicor Gas Thrift Plan
Statements of Changes in Net Assets Available for Benefits, with Fund Information
<CAPTION>
Year ended December 31, 1997
Nicor Stated Common Stock International Balanced Small
Stock Fund Return Fund Index Fund Stock Fund Fund Stock Fund Total
Net increase
(decrease) in Plan
assets from invest-
ment activities
<S> <C> <C> <C> <C> <C> <C> <C> <C>
of the Trust $ 3,246,438 $ 4,360,511 $ 3,312,653 $ (28,908) $ 1,124,125 $ 1,158,010 $ 13,172,829

Contributions:
Participants 566,744 1,538,030 602,301 260,290 356,129 447,219 3,770,713
Employer 221,432 622,565 221,433 97,425 127,867 157,351 1,448,073

Distributions to
participants (1,463,001) (6,981,534) (982,699) (217,736) (470,202) (424,942) (10,540,114)

Transfers, net (2,619,407) (2,963,253) 2,443,256 (96,638) 1,468,605 1,014,823 (752,614)

Net increase
(decrease) (47,794) (3,423,681) 5,596,944 14,433 2,606,524 2,352,461 7,098,887

Net assets available
for benefits at
beginning of year 16,301,390 65,580,049 9,865,582 3,275,524 4,597,891 4,674,798 104,295,234

Net assets available
for benefits at
end of year $ 16,253,596 $ 62,156,368 $ 15,462,526 $ 3,289,957 $ 7,204,415 $ 7,027,259 $111,394,121

Year ended December 31, 1996
Nicor Stated Common Stock International Balanced Small
Stock Fund Return Fund Index Fund Stock Fund Fund Stock Fund Total
Net increase in Plan
assets from invest-
ment activities of
the Trust $ 4,306,830 $ 4,655,772 $ 1,783,920 $ 193,204 $ 544,253 $ 589,925 $ 12,073,904

Contributions:
Participants 576,713 1,825,685 479,541 267,019 329,517 355,645 3,834,120
Employer 233,246 734,281 178,294 98,493 116,392 127,099 1,487,805

Distributions to
participants (1,335,867) (8,755,831) (776,158) (300,054) (449,412) (303,998) (11,921,320)

Transfers, net (726,240) (2,784,569) 945,747 (14,556) 813,476 860,771 (905,371)

Net increase
(decrease) 3,054,682 (4,324,662) 2,611,344 244,106 1,354,226 1,629,442 4,569,138

Net assets available
for benefits at
beginning of year 13,246,708 69,904,711 7,254,238 3,031,418 3,243,665 3,045,356 99,726,096

Net assets available
for benefits at
end of year $ 16,301,390 $ 65,580,049 $ 9,865,582 $ 3,275,524 $ 4,597,891 $ 4,674,798 $104,295,234
<F1>
The accompanying notes are an integral part of these statements.
</TABLE>

- 3 -

NICOR GAS THRIFT PLAN
NOTES TO THE FINANCIAL STATEMENTS

PLAN INFORMATION

In conjunction with the sponsor's name change from Northern Illinois Gas Com-
pany to Nicor Gas Company, the NI-Gas Thrift Plan, NI-Gas Savings Investment
Plan and NI-Gas Savings Investment and Thrift Trust have been designated as the
Nicor Gas Thrift Plan, Nicor Gas Savings Investment Plan and Nicor Gas
Savings Investment and Thrift Trust, respectively.

The following description of the Nicor Gas Thrift Plan (the Plan) provides
only general information. Participants should refer to the Plan agreement
for more detailed information.

The Plan. The Plan is a defined contribution plan which was established on
January 1, 1978, to provide supplemental retirement security to
substantially all employees of Nicor Gas Company (the Company), represented
by a collective bargaining agreement. The funds of the Plan are commingled
with the funds of the Nicor Gas Savings Investment Plan and held for
safekeeping and investment by the Nicor Gas Savings Investment and Thrift
Trust (the Trust). The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).

Contributions. The participant may elect to make either tax-deferred or
after-tax contributions, or any combination thereof, by payroll deduction,
that are partially matched by the Company.

Investment Options. A participant may direct contributions in any of six
investment options.

Stated Return Fund. The Stated Return Fund seeks stability of principal
and competitive returns by investing primarily in group annuity contracts
issued by life insurance companies.

- 4 -

NICOR GAS THRIFT PLAN
NOTES TO THE FINANCIAL STATEMENTS (Continued)

PLAN INFORMATION (Concluded)

The Common Stock Index Fund, International Stock Fund, Balanced Fund and
Small Stock Fund utilize registered investment companies and common/
collective trusts to meet the objectives stated above.

Plan Termination. The Company expects to continue the Plan indefinitely,
but reserves the right to amend or discontinue it at any time in a manner
consistent with any collective bargaining agreement and subject to the
provisions of ERISA. In the event of plan termination, participants will
become fully vested in their account balances.

- 5 -

NICOR GAS THRIFT PLAN
NOTES TO THE FINANCIAL STATEMENTS (Continued)

ACCOUNTING POLICIES

Investment Valuation. The Plan states its investment in the Trust at the
underlying value of the investments of the Trust as follows:

The market value for Nicor Inc. common stock is based on the closing price
on the New York Stock Exchange Composite Tape.

The market value of the units of the common/collective trusts and registered
investment companies are determined based on the underlying market value of
the investments of the funds.

Allocation Provisions. The Trust's net investment gain is allocated monthly
to the Plan based on the beginning ratio of the Plan's investment balance to
total Trust investments.

Use of Estimates. The preparation of financial statements requires
management to make estimates that affect the reported amounts. Actual
results could differ from those estimates.

INCOME TAXES

NET TRANSFER TO NICOR GAS SAVINGS INVESTMENT PLAN

- 6 -

NICOR GAS THRIFT PLAN
NOTES TO THE FINANCIAL STATEMENTS (Continued)

RECONCILIATION TO FORM 5500

At December 31, 1997 and 1996, the Plan had $571,278 and $1,143,341,
respectively, of pending participant distributions. Pending distributions
are recorded as a liability in the Plan's Form 5500; however, they are not
recognized as liabilities in the accompanying financial statements. These
distributions are reflected in the statement of changes in net assets
available for benefits when actually paid.

TRUST FINANCIAL INFORMATION

Net Assets in Trust

December 31
1997 1996
Assets

Other assets 5,348,369 164,038

244,607,017 223,400,082
Liabilities

Operating payables 5,147,656 264,439

Net assets in Trust $239,459,361 $223,135,643

Plan's interest in Trust net assets $111,199,124 $104,249,062

* Includes Party-in-Interest Investments.

- 7 -

NICOR GAS THRIFT PLAN
NOTES TO THE FINANCIAL STATEMENTS (Concluded)

TRUST FINANCIAL INFORMATION (Concluded)

Trust Investment Activities

29,423,999 25,085,589

Administrative expenses (319,366) (283,470)

Increase in Trust net assets
derived from investment activities $ 29,104,633 $ 24,802,119

Plan's interest in Trust investment
activities $ 13,172,829 $ 12,073,904

- 8 -

Nicor Inc.
Form 10-K/A
Exhibit 99.04

INDEPENDENT AUDITORS' REPORT

To the Birdsall, Inc. Retirement
Savings Plan Committee:

We have audited the accompanying statements of net assets available for
benefits, with fund information, of the Birdsall, Inc. Retirement Savings
Plan (the Plan) as of December 31, 1997 and 1996, and the related statements
of changes in net assets available for benefits, with fund information, for
the years then ended. These financial statements and the schedules referred
to below are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements and schedules based on
our audits.

Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The fund
information in the statements of net assets available for benefits and the
statements of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets
available for benefits and changes in net assets available for benefits of
each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

West Palm Beach, Florida
June 26, 1998

- 1 -

<TABLE>
Birdsall, Inc. Retirement Savings Plan
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1997

<CAPTION>
Participant-Directed
Nicor Stated Common Inter- Small
Stock Return Stock national Balanced Stock Loan
Fund Fund Index Fund Stock Fund Fund Fund Fund Other Total

Assets:
Cash and cash
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
equivalents $ - $ - $ - $ - $ - $ - $ - $ 248,193 $ 248,193

Investments:
Nicor Inc.
common stock 184,051 - - - - - - - 184,051
Group annuity
contracts - 9,981,275 - - - - - - 9,981,275
Value of interest
in common/
collective trusts - - 10,005,491 - 3,218,846 - - - 13,224,337
Value of interest
in registered
investment
companies - - - 249,096 161,267 739,365 - - 1,149,728
Short-term invest-
ment fund - 178,583 - - - - - - 178,583
184,051 10,159,858 10,005,491 249,096 3,380,113 739,365 - - 24,717,974

Receivables:
Employer - - - - - - - 300,346 300,346
Participants - - - - - - 160,896 - 160,896
- - - - - - 160,896 300,346 461,242

Total assets 184,051 10,159,858 10,005,491 249,096 3,380,113 739,365 160,896 548,539 25,427,409

Liabilities:
Forfeitures payable
to Birdsall, Inc. - - - - - - - 189,171 189,171
Other 2,007 - - - - - - 13,796 15,803

Total liabili-
ties 2,007 - - - - - - 202,967 204,974

Net assets available
for benefits $ 182,044 $10,159,858 $10,005,491 $ 249,096 $ 3,380,113 $739,365 $160,896 $ 345,572 $25,222,435

<F1>
The accompanying notes are an integral part of this statement.
</TABLE>

- 2 -

<TABLE>
Birdsall, Inc. Retirement Savings Plan
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1996

<CAPTION>
Participant-Directed
Balanced Stated
Equity Fund Fund Return Fund Other Total

Assets:
Investments:
<S> <C> <C> <C> <C> <C>
Group annuity contracts $ - $ - $ 10,343,012 $ - $ 10,343,012
Value of interest in pooled
separate account 7,727,396 - - - 7,727,396
Value of interest in common/
collective trusts - 1,872,563 - - 1,872,563
7,727,396 1,872,563 10,343,012 - 19,942,971

Receivables - employer - - - 276,957 276,957

Total assets 7,727,396 1,872,563 10,343,012 276,957 20,219,928

Liabilities:
Forfeitures payable to Birdsall, Inc. - - - 105,274 105,274
Other - - 8,128 - 8,128

Total liabilities - - 8,128 105,274 113,402

Net assets available for benefits $ 7,727,396 $ 1,872,563 $ 10,334,884 $ 171,683 $ 20,106,526

<F1>
The accompanying notes are an integral part of this statement.
</TABLE>

- 3 -

<TABLE>
Birdsall, Inc. Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year Ended December 31, 1997

<CAPTION>
Participant-Directed
Nicor Stated Common Inter- Small
Stock Return Stock national Balanced Stock Loan
Fund Fund Index Fund Stock Fund Fund Fund Fund Other Total

Additions:
Investment Income:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend income $ 2,801 $ - $ - $ - $ - $ -$ -$ - $ 2,801
Interest income - 636,547 - - - - 4,289 4,152 644,988
Net appreciation
in market value
of investments 19,593 - - - - - - - 19,593
Net investment
gain from common/
collective trusts - - 2,511,697 - 526,647 - - - 3,038,344
Net investment gain
(loss) from
registered
investment
companies - - - (20,639) 18,539 55,582 - - 53,482
Net investment gain
from pooled
separate accounts - - 130,374 - - - - - 130,374
Other income - 2,659 - - - - - 840 3,499
22,394 639,206 2,642,071 (20,639) 545,186 55,582 4,289 4,992 3,893,081

Contributions:
Participants 18,564 626,185 735,088 33,288 325,573 64,732 - - 1,803,430
Employer 6,735 370,686 329,202 12,711 127,603 22,892 - 306,372 1,176,201
25,299 996,871 1,064,290 45,999 453,176 87,624 - 306,372 2,979,631

Total additions 47,693 1,636,077 3,706,361 25,360 998,362 143,206 4,289 311,364 6,872,712

Deductions:
Distributions to
participants 5,714 710,841 690,312 2,971 121,272 20,747 - 65,024 1,616,881
Forfeiture payments - - - - - - - 83,897 83,897
Administrative
expenses and
other 129 16,119 14,514 298 4,290 649 - 20,026 56,025

Total deductions 5,843 726,960 704,826 3,269 125,562 21,396 - 168,947 1,756,803

Transfers, net 140,194 (1,084,143) (723,440) 227,005 634,750 617,555 156,607 31,472 -

Net increase (decrease) 182,044 (175,026) 2,278,095 249,096 1,507,550 739,365 160,896 173,889 5,115,909

Net assets available
for benefits at
beginning of year - 10,334,884 7,727,396 - 1,872,563 - - 171,683 20,106,526

Net assets available
for benefits at
end of year $ 182,044 $10,159,858 $10,005,491 $ 249,096 $ 3,380,113 $ 739,365$ 160,896$ 345,572 $25,222,435

<F1>
The accompanying notes are an integral part of this statement.
</TABLE>

- 4 -

<TABLE>
Birdsall, Inc. Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year Ended December 31, 1996

<CAPTION>
Participant-Directed
Balanced Stated
Equity Fund Fund Return Fund Other Total

Additions:
Investment income:
<S> <C> <C> <C> <C> <C>
Interest income $ - $ - $ 570,418 $ - $ 570,418
Net investment gain from pooled
separate accounts 1,178,737 - - - 1,178,737
Net investment gain from common/
collective trusts - 228,203 - - 228,203
Other income - - 25 - 25
1,178,737 228,203 570,443 - 1,977,383

Contributions:
Participants 651,916 245,814 703,490 - 1,601,220
Employer 275,483 82,264 403,003 276,957 1,037,707
927,399 328,078 1,106,493 276,957 2,638,927

Total additions 2,106,136 556,281 1,676,936 276,957 4,616,310

Deductions:
Distribution to participants 411,043 130,432 739,760 - 1,281,235
Forfeiture payments - - - 88,261 88,261

Total deductions 411,043 130,432 739,760 88,261 1,369,496

Transfers, net 562,714 250,278 (312,443) (500,549) -

Net increase (decrease) 2,257,807 676,127 624,733 (311,853) 3,246,814

Net assets available for benefits
at beginning of year 5,469,589 1,196,436 9,710,151 483,536 16,859,712

Net assets available for benefits
at end of year $ 7,727,396 $ 1,872,563 $ 10,334,884 $ 171,683 $ 20,106,526

<F1>
The accompanying notes are an integral part of this statement.
</TABLE>

- 5 -

BIRDSALL, INC. RETIREMENT SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS

PLAN INFORMATION

The following description of the Birdsall, Inc. Retirement Savings Plan
provides only general information. Participants should refer to the Plan
agreement for more detailed information.

The Plan. Birdsall, Inc. (the Company) established the Tropical Shipping
Savings Investment Plan (the Savings Investment Plan) on September 1, 1983,
to provide its eligible employees with an opportunity to accumulate
retirement savings. Effective January 1, 1990, the Birdsall, Inc. Profit
Sharing Plan was merged into the Savings Investment Plan and redesignated as
the Birdsall, Inc. Retirement Savings Plan (the Plan). The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).

Plan Administration. Authority to control and manage the operation and
administration of the Plan is vested in a committee appointed by the Board
of Directors of the Company. Under the terms of a trust agreement, the
Northern Trust Company acts as trustee for the Trust and holds the
investments of the Plan. The Northern Trust Company also acts as investment
manager for certain investments of the Plan. Effective in 1997,
administrative expenses associated with operation of the Plan are paid from
Plan assets.

Contributions. The participant may elect to make either tax-deferred or
after-tax contributions, or any combination thereof, by payroll deduction,
that are partially matched by the Company. The Company also pays an annual
discretionary lump sum contribution allocated equally to eligible
participants.

Investment Options. A participant may direct contributions in any of six
investment options.

Nicor Stock Fund. The Nicor Stock Fund offers participants the opportunity
to acquire the common stock of Nicor Inc., the parent company of Birdsall,
Inc. The fund is an Employee Stock Ownership Plan. Dividends on shares
are paid in cash to Plan participants rather than being reinvested in
additional shares.

Stated Return Fund. The Stated Return Fund seeks stability of principal
and competitive returns by investing primarily in group annuity contracts
issued by life insurance companies.

- 6 -

BIRDSALL, INC. RETIREMENT SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS (Continued)

PLAN INFORMATION (Concluded)

The Common Stock Index Fund, International Stock Fund, Balanced Fund and
Small Stock Fund utilize registered investment companies and common/
collective trusts to meet the objectives stated above.

Plan Termination. The Company expects to continue the Plan indefinitely,
but reserves the right to amend or discontinue it at any time subject to
the provisions of ERISA. In the event of plan termination, participants
will become fully vested in their account balances.

- 7 -

BIRDSALL, INC. RETIREMENT SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS (Continued)

ACCOUNTING POLICIES

Investment Valuation. The Plan states its investment in the Trust at the
underlying value of the investments of the Trust as follows:

The market value for Nicor Inc. common stock is based on the closing price
on the New York Stock Exchange Composite Tape.

The market value of the units of the common/collective trusts and registered
investment companies are determined based on the underlying market value of
the investments of the funds.

Use of Estimates. The preparation of financial statements requires
management to make estimates that affect the reported amounts. Actual
results could differ from those estimates.

INCOME TAXES

The Internal Revenue Service has determined and informed the Company by a
letter dated July 21, 1995, that the Plan is qualified and the Trust
established under the Plan is tax exempt under Section 401(a) of the
Internal Revenue Code (the Code). The Plan's management believes that the
Plan and related Trust continue to be designed and operated in compliance
with the requirements of the Code.

RECONCILIATION TO FORM 5500

At December 31, 1997 and 1996, the Plan had $238,711 and $153,393,
respectively, of pending participant distributions. Pending distributions
are recorded as a liability in the Plan's Form 5500; however, they are not
recognized as liabilities in the accompanying financial statements. These
distributions are reflected in the statement of changes in net assets
available for benefits when actually paid.

The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.

In addition, forfeiture payments shown separately on the statement of
changes in net assets available for benefits, are netted against employer
contributions on the Plan's Form 5500.

- 8 -

BIRDSALL, INC. RETIREMENT SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS (Concluded)

INVESTMENTS

Balances at December 31 are as follows:

1997 1996
Group Annuity Contracts:
John Hancock Financial Services, 6.37% $ 3,344,571 $ 3,144,280
Providian Capital Management, 6.44% 2,529,509 1,867,423
Life of Virginia Insurance Company, 7.17% 1,539,649 1,915,522
Metropolitan Life Insurance Company, 5.86% 1,090,100 2,059,513
Transamerica Asset Management, 6.87% 764,521 -
Protective Life Insurance Company, 5.13% 712,925 1,356,274

Interest in common/collective trusts:
Collective stock index fund* 11,771,167 -
Collective aggregate bond index fund* 1,453,170 -
Collective balanced fund - 1,872,563

Interest in registered investment companies* 1,149,728 -

Interest in pooled separate account:
Pooled equity fund - 7,727,396

Nicor Inc. common stock* 184,051 -

Short-term investment fund 178,583 -

$ 24,717,974 $ 19,942,971

*Includes Party-in-Interest Investments.

- 9 -

<TABLE>
Birdsall, Inc. Retirement Savings Plan
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997

<CAPTION>
Description of investment including maturity
Identity of issue, borrower, date, rate of interest, collateral, par
lessor, or similar party or maturity value Cost Current value
(a) (b) (c) (d) (e)

Metropolitan Life Insurance Company Group annuity contract; maturing March 1998;
<S> <C> <C>
5.86% fixed interest rate $ 1,090,100 $ 1,090,100

Protective Life Insurance Company Group annuity contract; maturing March 1998;
5.13% fixed interest rate 712,925 712,925

Life of Virginia Insurance Company Group annuity contract; maturing March 2000;
7.17% fixed interest rate 1,539,649 1,539,649

Providian Capital Management Group annuity contract; maturing March 2002;
6.44% fixed interest rate 2,529,509 2,529,509

John Hancock Financial Services Group annuity contract; maturing March 2002;
6.37% fixed interest rate 3,344,571 3,344,571

Transamerica Asset Management Group annuity contract; maturing April 2002;
6.87% fixed interest rate 764,521 764,521

(A) Northern Trust Company Short-term investment fund 178,583 178,583

(A) Northern Trust Company Collective stock index fund (B) 11,771,167

(A) Northern Trust Company Collective aggregate bond index fund (B) 1,453,170

(A) Northern Trust Company Benchmark international equity index fund (B) 249,096

(A) Northern Trust Company Benchmark funds small company index (B) 161,267

Dimensional Fund Advisors Inc. Dimensional investment group 6-10
institutional portfolio (B) 739,365

(A) Nicor Inc. Common stock at $2.50 par value (B) 184,051

(A) Birdsall, Inc. Participant loans earning interest
from 9.25% - 9.50% (B) 160,896

<F1>
(A) Denotes Party-in-Interest Investment.
<F2>
(B) Historical cost information could not be provided by the custodian.
</TABLE>

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<TABLE>

Birdsall, Inc. Retirement Savings Plan
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1997

Current
Description of asset Expense value Net
(include interest rate incurred of asset on gain
Identity of and maturity in case Purchase Selling Lease with Cost transaction or
party involved of a loan) price price rental transaction of asset date (loss)
(a) (b) (c) (d) (e) (f) (g) (h) (i)

Metropolitan Life
<S> <C> <C> <C> <C>
Insurance Company Group annuity contract $ 1,044,552 $ 1,044,552 $ 1,044,552 $ -

Transamerica
Accidental Life
Insurance Company Group annuity contract $ 1,900,000 1,900,000 1,900,000
</TABLE>

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