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 1-7297
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
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 April 30, 1999,
were 47,376,553.
Nicor Inc. 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
Item 3. Quantitative and Qualitative Disclosures
about Market Risk .................................... 15
Part II. Other Information
Item 1. Legal Proceedings ...................................... 15
Item 6. Exhibits and Reports on Form 8-K ....................... 15
Signature .............................................. 16
Exhibit Index .......................................... 17
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.
TEU - Twenty-foot equivalent unit.
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. 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 Inc. Page 2
Consolidated Statement of Income (Unaudited)
(millions, except per share data)
<CAPTION>
Three months ended
March 31
1999 1998
<S> <C> <C> <C> <C>
Operating revenues $ 576.4 $ 562.3
Operating expenses
Cost of gas 326.0 318.2
Operating and maintenance 86.6 82.2
Depreciation 55.1 53.3
Taxes, other than income taxes 43.3 43.7
511.0 497.4
Operating income 65.4 64.9
Other income (expense), net 6.7 3.7
Income before interest on debt and income taxes 72.1 68.6
Interest on debt, net of amounts capitalized 12.0 13.1
Income before income taxes 60.1 55.5
Income taxes 21.1 19.3
Net income 39.0 36.2
Dividends on preferred stock .1 .1
Earnings applicable to common stock $ 38.9 $ 36.1
Average shares of common stock outstanding
Basic 47.5 48.1
Diluted 47.6 48.3
Earnings per average share of common stock
Basic $ .82 $ .75
Diluted .82 .75
Dividends declared per share of common stock $ .39 $ .37
<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>
Three months ended
March 31
1999 1998
Operating activities
<S> <C> <C> <C> <C>
Net income $ 39.0 $ 36.2
Adjustments to reconcile net income to net cash flow
provided from operating activities:
Depreciation 55.1 53.3
Deferred income tax expense 4.2 4.4
Change in assets and liabilities:
Receivables, less allowances 1.0 65.3
Gas in storage 97.6 116.0
Deferred/accrued gas costs 10.0 5.6
Accounts payable (67.3) (34.4)
Temporary LIFO liquidation 67.4 53.6
Other 11.9 (11.0)
Net cash flow provided from operating activities 218.9 289.0
Investing activities
Capital expenditures (28.4) (21.3)
Short-term investments 26.7 (4.9)
Other 4.3 .2
Net cash flow provided from (used for) investing activities 2.6 (26.0)
Financing activities
Net proceeds from issuing long-term debt 100.7 49.4
Disbursements to retire long-term debt (102.7) (104.5)
Short-term borrowings (repayments), net (173.9) (174.9)
Dividends paid (17.7) (17.0)
Disbursements to reacquire stock (2.4) (7.9)
Other (.1) (.5)
Net cash flow used for financing activities (196.1) (255.4)
Net increase in cash and cash equivalents 25.4 7.6
Cash and cash equivalents, beginning of period 13.0 5.2
Cash and cash equivalents, end of period $ 38.4 $ 12.8
Supplemental information
Income taxes paid, net of refunds $ - $ 2.8
Interest paid, net of amounts capitalized 14.9 18.0
<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
Nicor Inc. Page 4
Consolidated Balance Sheet (Unaudited)
(millions)
<CAPTION>
March 31 December 31 March 31
1999 1998 1998
Assets
Current assets
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 38.4 $ 13.0 $ 12.8
Short-term investments, at cost
which approximates market 29.1 55.8 25.1
Receivables, less allowances of $9.2,
$6.3 and $9.4, respectively 263.0 264.0 289.3
Gas in storage, at last-in, first-out (LIFO) cost 7.9 105.5 11.8
Other 27.8 26.4 27.9
366.2 464.7 366.9
Property, plant and equipment, at cost
Gas distribution 3,131.8 3,119.7 3,042.8
Shipping 264.7 258.9 241.3
Other 1.7 1.2 .6
3,398.2 3,379.8 3,284.7
Less accumulated depreciation 1,693.8 1,648.0 1,581.7
1,704.4 1,731.8 1,703.0
Other assets 174.6 168.1 133.9
$ 2,245.2 $ 2,364.6 $ 2,203.8
Liabilities and capitalization
Current liabilities
Long-term obligations due within one year $ 51.2 $ 1.2 $ 25.4
Short-term borrowings 60.6 234.5 104.0
Accounts payable 203.0 270.3 209.7
Temporary LIFO liquidation 67.4 - 53.6
Accrued gas costs 39.9 29.9 30.7
Other 62.2 43.0 56.4
484.3 578.9 479.8
Deferred credits and other liabilities
Deferred income taxes 244.8 238.9 221.1
Regulatory income tax liability 77.6 78.6 81.0
Unamortized investment tax credits 43.6 44.1 45.7
Other 102.9 101.5 114.5
468.9 463.1 462.3
Capitalization
Long-term debt 508.6 557.3 500.5
Preferred stock 6.3 6.3 6.4
Common equity
Common stock 118.6 118.8 120.1
Retained earnings 658.5 640.2 634.7
1,292.0 1,322.6 1,261.7
$ 2,245.2 $ 2,364.6 $ 2,203.8
<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.
BUSINESS SEGMENT INFORMATION
Financial data by business segment is presented below:
Three months ended
March 31
(millions) 1999 1998
Operating revenues
Gas distribution $ 512.6 $ 504.2
Shipping 53.8 55.1
Other Nicor ventures 10.0 3.0
$ 576.4 $ 562.3
Operating income (loss)
Gas distribution $ 61.6 $ 59.6
Shipping 4.4 6.4
Other Nicor ventures .2 (.5)
Corporate and eliminations (.8) (.6)
$ 65.4 $ 64.9
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.
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 ICC
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
The following discussion should be read in conjunction with the Management's
Discussion and Analysis section of the Nicor 1998 Annual Report on Form 10-K.
SUMMARY
Nicor's first quarter 1999 diluted earnings per common share were $.82, up
from $.75 in 1998 due to improved gas distribution operating results and a
gain on the sale of Nicor's interest in QuickTrade, an electronic energy
trading system. This increase was partially offset by lower operating
results in the shipping segment. Net income was $39 million compared with
$36.2 million in 1998.
Operating income (loss) by major business segment was:
Three months ended
March 31
(millions) 1999 1998
Gas distribution $ 61.6 $ 59.6
Shipping 4.4 6.4
Corporate and other (.6) (1.1)
$ 65.4 $ 64.9
The following summarizes operating income comparisons for major business
segments:
Gas distribution operating income increased $2 million 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.
Shipping operating income decreased $2 million as the positive impact of
4 percent higher volumes was more than offset by lower average prices
resulting primarily from increased competition in selected markets and
lower charter revenues.
RESULTS OF OPERATIONS
Details of various financial and operating information by segment can be
found in the tables on pages 13 and 14. The following discussion
summarizes the major items impacting Nicor's earnings.
Nicor Inc. Page 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
Operating revenues. Operating revenues by major business segment were:
Three months ended
March 31
(millions) 1999 1998
Gas distribution $ 512.6 $ 504.2
Shipping 53.8 55.1
Corporate and other 10.0 3.0
$ 576.4 $ 562.3
Operating revenues increased $14.1 million due to higher revenues in the gas
distribution segment and revenues generated from Nicor's wholesale gas
trading business. Gas distribution revenues increased as the impact of
higher deliveries more than offset lower gas prices, which are passed
directly through to customers.
Gas distribution margin. Gas distribution 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
$4.4 million in the first quarter to $86.6 million due primarily to higher
information technology and bad debt expenses in the gas distribution segment.
The company anticipates that 1998's reduction in operating and maintenance
expenses in the gas distribution segment may be offset in 1999.
Nonoperating items. Other income increased due to a gain on the sale of
Nicor's interest in QuickTrade, an electronic energy trading system, and
improved financial results at Nicor's retail energy joint venture with
Houston-based Dynegy Inc. These positive factors exceeded the prior period's
gain on real estate sales.
Interest expense decreased due to reduced average borrowing levels and lower
interest rates.
Nicor Inc. Page 9
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 $70.1 million
for the quarter due primarily to changes in working capital items in the gas
distribution segment. Working capital can swing sharply due primarily to
certain gas distribution 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. Nicor and its gas distribution subsidiary maintain 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 $330 million and the company had $60.6 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.
Under an existing common stock repurchase program, Nicor purchased and
retired 56,000 common shares during the first quarter of 1999 at an aggregate
cost of $2.2 million.
In March 1999, the company declared a quarterly dividend on common stock of
39 cents per share, payable May 1, 1999. This payment represents an annual
rate of $1.56 per share, which is 5.4 percent higher than the $1.48 per share
established with the May 1, 1998 dividend.
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's
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 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 Inc. Page 10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
Nicor Gas. 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.
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
Nicor Inc. Page 11
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
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.
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.
Nicor Inc. Page 12
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
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.
Other Nicor Affiliates. Affiliates other than Nicor Gas are also managed as
part of the Year 2000 project with similar action plans. Most of the Year
2000 issues in these businesses are similar to those of Nicor Gas. These
affiliates, being relatively small ventures, appear to be impacted in only
minor ways, with the exception of Tropical Shipping. Tropical Shipping has
remediated its main cargo-tracking program and has particular concerns with
Caribbean interisland communications. Tropical's overall schedule calls for
remediation activities to be completed by mid-1999, and testing and
contingency plans to be completed by the end of the third quarter of 1999.
Costs for remediation are not expected to be significant.
OTHER
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.
Power Generation. Through an alliance with Dynegy, Nicor has the ability to
pursue large electric power generation projects in the Midwest. In February
1999, the companies announced that construction had begun on a 250-megawatt,
natural gas-fired, electric generation plant in northern Illinois. The plant
will use natural gas delivered through Nicor Gas' system to generate
electricity that will provide more reliable electric service during high-
demand periods. The Nicor/Dynegy partnership for this project is still being
negotiated so no investment has been made by Nicor to date; however,
construction of the plant is well underway, and current plans call for it to
be in operation during the peak summer months this year.
Market Risk. The company is exposed to market risk in the normal course of
its business operations, including the risk of loss arising from adverse
changes in natural gas commodity prices and interest rates. There has been
no material change in the company's exposure to market risk since
December 31, 1998.
<TABLE>
Nicor Inc. Page 13
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
GAS DISTRIBUTION 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>
<TABLE>
Nicor Inc. Page 14
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Concluded)
<CAPTION>
SHIPPING STATISTICS
Three months ended
March 31
1999 1998
TEUs shipped (thousands):
<S> <C> <C>
Southbound 30.2 29.4
Northbound 4.5 3.2
Interisland 2.2 2.9
36.9 35.5
Other statistics:
Ports served 25 25
Vessels owned 13 14
Revenue per TEU $ 1,457 $ 1,504
</TABLE>
Nicor Inc. Page 15
Item 3. Quantitative and Qualitative Disclosures about Market Risk
For quantitative and qualitative disclosures about market risk, see Market
Risk on page 12, which is incorporated herein by reference.
PART II - Other Information
Item 1. Legal Proceedings
For information concerning legal proceedings, see Regulatory Matters on page
5 and Contingencies on page 6, which are incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index on page 17 filed herewith.
(b) The company did not file a report on Form 8-K during the first
quarter of 1999.
Nicor Inc. Page 16
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 May 13, 1999 By DAVID L. CYRANOSKI
David L. Cyranoski
Senior Vice President,
Secretary and Treasurer
Nicor Inc. Page 17
Exhibit Index
Exhibit
Number Description of Document
27.01 Financial Data Schedule.
<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
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<TOTAL-CURRENT-ASSETS> 366
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 175
<TOTAL-ASSETS> 2,245
<COMMON> 119
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 658
<TOTAL-COMMON-STOCKHOLDERS-EQ> 777
6
0
<LONG-TERM-DEBT-NET> 471
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 37
<COMMERCIAL-PAPER-OBLIGATIONS> 61
<LONG-TERM-DEBT-CURRENT-PORT> 51
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 842
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<GROSS-OPERATING-REVENUE> 576
<INCOME-TAX-EXPENSE> 21
<OTHER-OPERATING-EXPENSES> 511
<TOTAL-OPERATING-EXPENSES> 532
<OPERATING-INCOME-LOSS> 44
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<INCOME-BEFORE-INTEREST-EXPEN> 51
<TOTAL-INTEREST-EXPENSE> 12
<NET-INCOME> 39
0
<EARNINGS-AVAILABLE-FOR-COMM> 39
<COMMON-STOCK-DIVIDENDS> 19
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 219
<EPS-PRIMARY> .82
<EPS-DILUTED> .82
</TABLE>
