Nicor Inc.
Form 10-K/A
Exhibit 99.04
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Birdsall, Inc. Retirement
Savings Plan Committee:
We have audited the accompanying statements of net assets available for benefits
of the Birdsall, Inc. Retirement Savings Plan (the Plan) as of December 31, 1999
and 1998, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements and the
supplemental schedules referred to below are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements and supplemental schedules based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the changes in net assets available for benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the 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 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 supplemental schedules 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
Arthur Andersen LLP
West Palm Beach, Florida,
June 23, 2000.
BIRDSALL, INC. RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
December 31
-----------------------------
1999 1998
------------ ------------
Assets:
Cash and cash equivalents $ 993,927 $ 615,875
Investments 34,093,114 29,590,961
Receivables
Employer 275,800 438,734
Participants 287,834 248,869
------------ ------------
563,634 687,603
------------ ------------
Total Assets 35,650,675 30,894,439
------------ ------------
Liabilities:
Forfeitures 235,840 301,465
Other 9,327 31,321
------------ ------------
Total Liabilities 245,167 332,786
------------ ------------
Net assets available for benefits $ 35,405,508 $ 30,561,653
============ ============
The accompanying notes are an integral part of these statements.
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BIRDSALL, INC. RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
Year ended December 31
----------------------------
1999 1998
------------- ------------
Additions
Investment income:
Dividend income $ 68,589 $ 13,098
Interest income 642,991 689,786
Net appreciation/(depreciation) in
market value of Nicor Inc.
common stock (285,619) 8,473
Net investment gain from common/
collective trusts 3,336,356 3,700,955
Net investment gain/(loss) from
registered investment company 199,910 (23,055)
------------ ------------
3,962,227 4,389,257
Contributions:
Participant 2,010,097 2,018,249
Employer 1,348,949 1,259,426
------------ ------------
3,359,046 3,277,675
------------ ------------
Total additions 7,321,273 7,666,932
------------ ------------
Deductions
Distributions to participants 2,441,145 2,245,827
Administrative expenses and other 36,273 81,887
------------ ------------
Total deductions 2,477,418 2,327,714
------------ ------------
Net increase 4,843,855 5,339,218
Net assets available for benefits
at beginning of year 30,561,653 25,222,435
------------ ------------
Net assets available for benefits
at end of year $ 35,405,508 $ 30,561,653
============ ============
The accompanying notes are an integral part of this statement.
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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 re-designated as the Birdsall, Inc.
Retirement Savings Plan (the Plan). The funds of the Plan are held for
safekeeping and investment by the Birdsall, Inc. Retirement Savings Plan 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, by payroll deduction, either
tax-deferred or after-tax contributions, or any combination thereof that are
partially matched by the Company. The Company also pays an annual discretionary
lump sum contribution allocated equally to eligible participants. In addition,
the Plan accepts certain rollovers. Participants direct the investment of their
contributions into various investment options offered by the Plan.
Employee contributions include amounts in excess of maximum contribution levels
for certain participants. Excess contributions are refunded to participants. A
liability for excess contributions payable of $9,327 and $16,881 has been
reflected in the statements of net assets available for benefits as of December
31, 1999 and 1998, respectively.
Participant loans. Participants may borrow a minimum of $1,000 up to a maximum
equal to the lesser of $50,000 or 50 percent of their vested account balance.
Loans are repayable through payroll deductions over periods ranging from one
year to five years, and are secured by the balance in the participant's account.
The interest rate is based on the Northern Trust prime rate plus 1 percent and
is fixed over the life of the loan. The average interest rate for outstanding
participant loans for the years ended December 31, 1999 and 1998, was 8.83 and
9.4 percent, respectively.
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.
Suspensions and withdrawals. The participant may suspend contributions and will
not cease to be a participant during the suspension period.
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Birdsall, Inc. Retirement Savings Plan
Notes to the Financial Statements (Continued)
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.
<PAGE>
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, 1999 and 1998 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
years ended December 31, 1999 and 1998, the average return was approximately 6.5
and 6.3 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.
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.
Reclassifications. Certain reclassifications were made to conform the prior
year's financial statements to the current year's presentation.
INVESTMENTS
Balances at December 31 are as follows:
1999 1998
------------ ------------
Group annuity contracts $ 9,685,741 $ 9,911,891
Common/collective trusts* 20,107,686 17,802,982
Registered investment companies 966,624 727,756
Nicor Inc. common stock* 1,459,000 377,431
Interest bearing cash* 1,874,063 770,901
------------ ------------
$ 34,093,114 $ 29,590,961
============ ============
* Includes Party-in-Interest Investment.
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Birdsall, Inc. Retirement Savings Plan
Notes to the Financial Statements (Concluded)
The fair value of fund investments that represent 5% or more of the Plan's net
assets are as follows:
1999 1998
------------ ------------
John Hancock Financial Services group
annuity contract $ 2,748,654 $ 3,557,620
Providian Capital Management group
annuity contract 2,149,074 2,692,409
Travelers group annuity contract 1,778,111 0
Allstate Life Insurance group annuity
contract 1,952,013 1,988,703
Interest bearing cash* 1,874,063 770,901
Collective stock index fund* 17,429,908 15,350,931
Collective aggregate bond index fund* 1,949,751 1,890,341
* Includes Party-in-Interest Investment.
INCOME TAXES
The Internal Revenue Service has determined and informed the Company by a letter
dated January 23, 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.
RECONCILIATION TO FORM 5500
At December 31, 1999 and 1998, the Plan had $80,908 and $47,114, 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 statements 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 (losses) and the unrealized
appreciation (depreciation) on those investments.
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BIRDSALL, INC. RETIREMENT SAVINGS PLAN
Schedule H, Part IV, Line 4i - Schedule of Assets Held for Investment Purposes
December 31, 1999
<CAPTION>
Description of investment including maturity
Identity of issue, borrower date, rate of interest, collateral, par
or similar party or maturity value Cost Current Value
---------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
<S> <C> <C> <C>
John Hancock Financial Services Group annuity contract: due March 2002; 6.37% $ 2,748,654 $ 2,748,654
Providian Capital Management Group annuity contract: due March 2002; 6.44% 2,149,074 2,149,074
Travelers Group annuity contract: due March 2004; 6.14% 1,778,111 1,778,111
Allstate Life Insurance Company Group annuity contract: due March 2003; 6.22% 1,952,013 1,952,013
Life of Virginia Insurance Company Group annuity contract: due March 2000; 7.17% 589,479 589,479
Transamerica Asset Management Group annuity contract: due April 2002; 6.87% 468,410 468,410
(A) The Northern Trust Company Short-term investment fund (B) 1,874,063
(A) The Northern Trust Company Collective stock index fund (B) 17,429,908
(A) The Northern Trust Company Collective aggregate bond index fund (B) 1,949,751
(A) The Northern Trust Company Benchmark international equity index fund (B) 455,853
(A) The Northern Trust Company Benchmark small company index fund (B) 272,174
(A) DFA Investment Dimensions Group Inc. Dimensional inv. group 6-10 inst. portfolio (B) 966,624
(A) Nicor Inc. Common stock at $2.50 par value (B) 1,459,000
(A) Participant Notes Receivable Participant loans earning interest 8.75%-9.50% (B) 278,028
(A) Denotes party-in-interest investment
(B) Historical cost information could not be provided by the custodian.
</TABLE>
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BIRDSALL, INC. RETIREMENT SAVINGS PLAN
Schedule H, Part IV, Line 4j - Schedule of Reportable Transactions
December 31, 1999
<CAPTION>
Description of asset Expense
(include interest rate incurred Current value
Identity of and maturity in case Purchase Selling Lease with Cost of asset on Net gain
party involved of a loan) price price rental trans. of asset trans. date or (loss)
-----------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Category A - a single transaction in excess of 5% of plan assets:
<S> <C> <C> <C> <C>
Collective Short Term Investment $ 2,521,358 $ 2,521,358 $ 2,521,358
Collective Short Term Investment $ 1,614,594 $ 1,614,594 $ 1,614,594
Travelers Insurance Company $ 1,698,300 $ 1,698,300 $ 1,698,300
Category C - a series of transactions which amount in the aggregate to more than 5% of the current value of plan assets:
The Northern Trust Co. Collective S.T. Inv. Fd $18,342,168 $16,874,723
Number of transactions 256 235
Travelers Insurance Co Group annuity contract $ 1,778,111
Number of transactions 12
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