UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2000
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission Registrant, State of Incorporation, I.R.S Employer
File Number Address and Telephone Number Identification
Number
-------------- ------------------------------------- -------------------
1-7297 Nicor Inc. 36-2855175
(An Illinois Corporation)
1844 Ferry Road
Naperville, Illinois 60563-9600
(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 July 31, 2000, were
45,905,152.
<PAGE>
Nicor Inc. Page i
Table of Contents
Part I - Financial Information
Item 1. Financial Statements (Unaudited) ............................... 1
Consolidated Statement of Income:
Three and six months ended
June 30, 2000 and 1999 ........................................ 2
Consolidated Statement of Cash Flows:
Six months ended
June 30, 2000 and 1999 ........................................ 3
Consolidated Balance Sheet:
June 30, 2000 and 1999, and
December 31, 1999 ............................................. 4
Notes to the Consolidated Financial Statements ................. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................... 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk ..... 13
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders..............13
Item 6. Exhibits and Reports on Form 8-K ............................... 13
Signature ...................................................... 14
Exhibit Index .................................................. 15
Glossary
Degree day.....The extent to which the daily average temperature falls
below 65 degrees Fahrenheit. Normal weather for Nicor Gas'
service territory is about 6,100 degree days per year.
ICC............Illinois Commerce Commission, the agency that regulates
investor-owned Illinois utilities.
Mcf, Bcf .....Thousand cubic feet, billion cubic feet.
PBR............Performance-based rate, a plan that provides economic
incentives based on performance.
TEU............Twenty-foot equivalent unit, a measure of volume in
containerized shipping equal to one 20-foot-long container.
<PAGE>
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.
Nicor Inc. Page 2
-------------------------------------------------------------------------------
Consolidated Statement of Income (Unaudited)
(millions, except per share data)
Three months ended Six months ended
June 30 June 30
--------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Operating revenues $ 348.4 $ 271.8 $ 1,007.7 $ 848.2
--------- --------- --------- ---------
Operating expenses
Cost of gas 146.8 95.4 537.0 421.4
Operating and maintenance 97.9 86.2 192.3 172.9
Depreciation 25.1 24.6 81.9 79.6
Taxes, other than income taxes 23.2 21.1 70.9 64.4
--------- --------- --------- ---------
293.0 227.3 882.1 738.3
--------- --------- --------- ---------
Operating income 55.4 44.5 125.6 109.9
Other income (expense), net 1.2 6.5 3.5 13.1
--------- --------- --------- ---------
Income before interest on debt
and income taxes 56.6 51.0 129.1 123.0
Interest on debt, net of amounts
capitalized 9.8 10.4 22.0 22.4
--------- --------- --------- ---------
Income before income taxes 46.8 40.6 107.1 100.6
Income taxes 16.2 14.1 37.7 35.1
--------- --------- --------- ---------
Net income 30.6 26.5 69.4 65.5
Dividends on preferred stock .1 .1 .1 .2
--------- --------- --------- ---------
Earnings applicable to
common stock $ 30.5 $ 26.4 $ 69.3 $ 65.3
========= ========= ========= =========
Average shares of common stock
outstanding
Basic 46.3 47.4 46.5 47.4
Diluted 46.4 47.5 46.6 47.6
Earnings per average share of
common stock
Basic $ .66 $ .56 $ 1.49 $ 1.38
Diluted .66 .56 1.49 1.37
Dividends declared per share of
common stock 0.415 0.390 0.830 0.780
The accompanying notes are an integral part of this statement.
Nicor Inc. Page 3
-------------------------------------------------------------------------------
Consolidated Statement of Cash Flows (Unaudited)
(millions)
Six months ended
June 30
--------------------
2000 1999
--------- ---------
Operating activities
Net income $ 69.4 $ 65.5
Adjustments to reconcile net income to net cash flow
provided from operating activities:
Depreciation 81.9 79.6
Deferred income tax expense 6.5 11.8
Change in assets and liabilities:
Receivables, less allowances 128.9 124.1
Gas in storage 2.0 94.7
Deferred/accrued gas costs (25.6) (27.9)
Accounts payable 32.1 (11.9)
Temporary LIFO liquidation 105.7 59.2
Postretirement benefits (14.4) (8.4)
Other 16.2 (9.3)
--------- ---------
Net cash flow provided from operating activities 402.7 377.4
--------- ---------
Investing activities
Capital expenditures (71.0) (63.1)
Short-term investments (3.2) 25.3
Other (4.8) (3.8)
--------- ---------
Net cash flow used for investing activities (79.0) (41.6)
--------- ---------
Financing activities
Net proceeds from issuing long-term debt 49.9 100.6
Disbursements to retire long-term debt (50.2) (102.7)
Short-term borrowings (repayments), net (288.2) (217.0)
Dividends paid (37.8) (36.2)
Disbursements to reacquire stock (31.8) (8.1)
Other .9 (.2)
--------- ---------
Net cash flow used for financing activities (357.2) (263.6)
--------- ---------
Net (decrease) increase in cash and cash equivalents (33.5) 72.2
Cash and cash equivalents, beginning of period 42.5 13.0
--------- ---------
Cash and cash equivalents, end of period $ 9.0 $ 85.2
========= =========
Supplemental information
Income taxes paid, net of refunds $ 20.1 $ 25.6
Interest paid, net of amounts capitalized 23.6 22.4
The accompanying notes are an integral part of this statement.
Nicor Inc. Page 4
-------------------------------------------------------------------------------
Consolidated Balance Sheet (Unaudited)
(millions)
June 30 December 31 June 30
2000 1999 1999
----------- ----------- ----------
Assets
Current assets
Cash and cash equivalents $ 9.0 $ 42.5 $ 85.2
Short-term investments, at cost which
approximates market 32.9 29.7 30.5
Receivables, less allowances of $9.7,
$7.1 and $8.7, respectively 230.9 359.8 139.9
Gas in storage 29.0 31.0 10.8
Deferred gas costs 41.5 15.9 -
Other 34.3 29.1 26.5
----------- ----------- ----------
377.6 508.0 292.9
----------- ----------- ----------
Property, plant and equipment, at cost
Gas distribution 3,240.3 3,200.3 3,144.6
Shipping 291.3 280.8 270.6
Other 1.9 2.0 1.8
----------- ----------- ----------
3,533.5 3,483.1 3,417.0
Less accumulated depreciation 1,813.1 1,747.9 1,703.5
----------- ----------- ----------
1,720.4 1,735.2 1,713.5
----------- ----------- ----------
Other assets 228.9 208.6 185.2
----------- ----------- ----------
$ 2,326.9 $ 2,451.8 $ 2,191.6
=========== =========== ==========
Liabilities and Capitalization
Current liabilities
Long-term obligations due within one year $ 74.2 $ 74.2 $ 51.2
Short-term borrowings 56.0 344.2 17.5
Accounts payable 314.5 282.4 258.4
Temporary LIFO liquidation 105.7 - 59.2
Accrued gas costs - - 2.0
Other 51.4 44.9 37.2
----------- ----------- ----------
601.8 745.7 425.5
----------- ----------- ----------
Deferred credits and other liabilities
Deferred income taxes 278.4 266.6 253.3
Regulatory income tax liability 72.8 74.8 76.6
Unamortized investment tax credits 41.9 42.7 43.0
Other 102.1 91.9 98.9
----------- ----------- ----------
495.2 476.0 471.8
----------- ----------- ----------
Capitalization
Long-term debt 435.9 436.1 508.7
Preferred stock 6.3 6.3 6.3
Common equity
Common stock 115.0 117.2 118.3
Retained earnings 672.7 670.5 661.0
----------- ----------- ----------
1,229.9 1,230.1 1,294.3
----------- ----------- ----------
$ 2,326.9 $ 2,451.8 $ 2,191.6
=========== =========== ==========
The accompanying notes are an integral part of this statement.
<PAGE>
Nicor Inc. Page 5
Notes to the Consolidated Financial Statements (Unaudited)
ACCOUNTING POLICIES
Weather insurance. On an interim basis, estimated weather insurance benefits are
recorded based on a comparison of actual year-to-date degree days to an
allocation of annual insured degree days. Second quarter and year-to-date
operating revenues include $.4 million and $7.3 million of estimated insurance
benefits that will partially reverse if the weather remains normal for the
remainder of the year.
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. The gas distribution segment's inventory is carried at cost on a
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 and in
current liabilities as a temporary LIFO liquidation.
Receivable credit risk. Nicor's major subsidiaries have diversified customer
bases and prudent credit policies to mitigate risk. At June 30, 2000,
approximately $34 million of Nicor's accounts receivable balance was due from
one natural gas marketing company. Appropriate assurance has been obtained for
this receivable.
NEW ACCOUNTING PRONOUNCEMENT
In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities. The company has
substantially completed an evaluation of the statement, as amended, and plans to
adopt it on January 1, 2001. Implementation is not expected to have a material
impact on the company's financial condition or results of operations.
At Nicor Gas, derivative instruments are primarily utilized in the natural gas
procurement function. Realized gains or losses are passed directly through to
customers through operation of the company's Uniform Purchased Gas Adjustment
Clause. As such, changes in the fair value of these derivative instruments will
be deferred or accrued as a regulatory asset or liability until realized.
Nicor's wholesale natural gas trading business will continue its practice of
marking energy-related contracts and physical inventory to fair value.
PERFORMANCE-BASED RATE PLAN
On January 1, 2000, Nicor Gas' performance-based rate (PBR) plan for natural gas
costs went into effect. Under the PBR, Nicor Gas' total gas supply costs will be
compared to a market-sensitive benchmark. Savings and losses relative to the
benchmark will be shared equally with customers. After two years, the plan will
be subject to Illinois Commerce Commission (ICC) review.
Results of the company's PBR plan are determined annually. On an interim basis,
the company records an estimate of results attributable to the period. Nicor
recorded $1.0 million and $2.2 million of estimated PBR results as operating
revenue for the three- and six-month periods, respectively.
<PAGE>
Nicor Inc. Page 6
Notes to the Consolidated Financial Statements (Unaudited)(Continued)
BUSINESS SEGMENT INFORMATION
Financial data by business segment is presented below:
Three months ended Six months ended
June 30 June 30
-------------------- -------------------
(millions) 2000 1999 2000 1999
--------- --------- --------- ---------
Operating revenues
Gas distribution $ 263.1 $ 203.4 $ 836.7 $ 716.1
Shipping 61.2 54.7 120.5 108.5
Other Nicor ventures 24.2 13.7 50.7 23.6
Corporate and eliminations (.1) - (.2) -
========== ========= ========= =========
$ 348.4 $ 271.8 $1,007.7 $ 848.2
========== ========= ========= =========
Operating income (loss)
Gas distribution $ 47.5 $ 40.0 $ 112.5 $ 101.6
Shipping 5.9 5.0 11.5 9.4
Other Nicor ventures 3.6 (.2) 3.6 -
Corporate and eliminations (1.6) (.3) (2.0) (1.1)
========= ========= ========= =========
$ 55.4 $ 44.5 $ 125.6 $ 109.9
========= ========= ========= =========
LONG-TERM DEBT
In January 2000, Nicor Gas issued $50 million of adjustable rate unsecured notes
due in 2001 at an initial rate of 6.11% to fund the redemption of $50 million of
unsecured notes at 5.065% that matured in January 2000.
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.
<PAGE>
Nicor Inc. Page 7
Notes to the Consolidated Financial Statements (Unaudited) (Concluded)
On December 20, 1995, Nicor Gas filed suit in the Circuit Court of Cook County
against certain insurance carriers seeking recovery of environmental cleanup
costs of certain former manufactured gas plant sites. Nicor Gas has reached a
settlement with one of the insurance carriers. In February 2000, the court
dismissed the company's case on summary judgment motions by certain defendants.
The company filed an appeal in March 2000. Management cannot predict the outcome
of the lawsuit against the remaining insurance carriers. Any recoveries will be
refunded 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.
SUBSEQUENT EVENT
In July 2000, Nicor Gas sold real estate at a gain of $3.8 million, which will
be included in other income during the third quarter of 2000.
<PAGE>
Nicor Inc. Page 8
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 1999 Annual Report on Form 10-K.
SUMMARY
Nicor's diluted earnings per share for the three- and six-month periods ended
June 30, 2000, are $.66 and $1.49, respectively, compared to diluted earnings
per share of $.56 and $1.37, respectively, for the same periods in 1999. Second
quarter net income was $30.6 million in 2000 compared to $26.5 million in 1999.
Net income for the six-month period increased to $69.4 from $65.5 million a year
ago. Results for both the quarter and six-month period reflect improvements in
all business segments including gas distribution, shipping and Nicor's other
energy-related ventures. Per share results were also favorably affected by the
company's common stock repurchase program.
Operating income (loss) by major business segment was:
Three months ended Six months ended
June 30 June 30
------------------- -------------------
(millions) 2000 1999 2000 1999
-------- --------- --------- ---------
Gas distribution $ 47.5 $ 40.0 $ 112.5 $ 101.6
Shipping 5.9 5.0 11.5 9.4
Corporate and other 2.0 (.5) 1.6 (1.1)
======== ========= ========= =========
$ 55.4 $ 44.5 $ 125.6 $ 109.9
======== ========= ========= =========
The following summarizes operating income comparisons for major business
segments:
o Gas distribution operating income for the three- and six-month periods ended
June 30, 2000, increased $7.5 million and $10.9 million, respectively.
Improvements for both periods reflect income related to a significant
construction project, customer additions and contributions from the gas cost
performance-based rate plan. The quarter comparison also reflects the impact of
colder weather. Although weather for the six-month period was warmer than last
year, its adverse effect on operating results was more than offset by the
company's weather insurance coverage in 2000. The insurance limits earnings
volatility and ensures that the net impact of weather in 2000 will be an
improvement over 1999.
o Containerized shipping operating income increased $.9 million for the three
months and $2.1 million for the six months ended June 30, 2000. Improvements in
both periods are primarily a result of an increase in volumes shipped and
charter income.
o Improvements in other operating income reflect a contribution from Nicor's
technology business for both the quarter and six-month periods.
Other income for the quarter is $1.2 million, down from $6.5 million a year ago.
For the six months ended June 30, other income decreased to $3.5 million in 2000
from $13.1 million in 1999. Nicor's nonregulated retail energy services joint
venture posted improved results in both periods, while 1999 included significant
contributions from various items such as interest benefits on tax related
matters and a gain on the sale of Nicor's interest in an electronic energy
trading system.
<PAGE>
Nicor Inc. Page 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
In July 2000, Nicor Gas sold real estate at a gain of $3.8 million, which will
be included in other income during the third quarter of 2000. The Company
continues to assess its nonstrategic real estate holdings, and is evaluating the
potential to maximize the value from these holdings through additional property
sales or development over the next several years.
RESULTS OF OPERATIONS
Details of various financial and operating information by segment can be found
in the tables on pages 11 and 12. The following discussion summarizes the major
items impacting Nicor's earnings.
Operating revenues. Operating revenues by major business segment were:
Three months ended Six months ended
June 30 June 30
------------------- -------------------
(millions) 2000 1999 2000 1999
-------- -------- --------- ---------
Gas distribution $ 263.1 $ 203.4 $ 836.7 $ 716.1
Shipping 61.2 54.7 120.5 108.5
Corporate and other 24.1 13.7 50.5 23.6
======== ======== ========= =========
$ 348.4 $ 271.8 $1,007.7 $ 848.2
======== ======== ========= =========
For the second quarter, gas distribution revenues increased $59.7 million
primarily due to higher natural gas prices, which are passed directly through to
customers, and the impact of colder weather. Year-to-date gas distribution
revenue increased $120.6 million. The impact of higher natural gas prices more
than offset the effect of warmer weather during the six-month period.
Year-to-date gas distribution revenues also include $7.3 million of estimated
weather insurance benefits that will partially reverse if the weather remains
normal for the rest of the year. Shipping revenues rose for the three- and
six-month periods due to increased volumes, charter revenues and fuel cost
surcharges. Revenues generated from Nicor's wholesale natural gas trading and
technology businesses accounted for the increase in corporate and other for both
periods.
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, increased for the three- and six-month periods by $ 8.1 million to
$111.3 million and $14.1 million to $274.5 million, respectively. Improvements
for both periods reflect income related to a significant construction project,
customer additions and contributions from the gas cost performance-based rate
plan. Quarter results also reflect the impact of colder weather. Although
weather for the six-month period was warmer than last year, its adverse effect
on operating results was more than offset by the company's weather insurance
coverage in 2000.
Operating and maintenance. Operating and maintenance expense increased $11.7
million to $97.9 million, and $19.4 million to $192.3 million, respectively, in
the three- and six-month periods ended June 30, 2000, due largely to higher
volume-related expenses in the shipping segment. The increase is also due to
higher costs related to Nicor's technology business.
<PAGE>
Nicor Inc. Page 10
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 increased $25.3 million to
$402.7 million for the six months ended June 30, 2000, due primarily to changes
in working capital items in the gas distribution segment. Working capital can
swing sharply due 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.
Investing. In the second quarter of 2000, Nicor has committed an additional $10
million to expand its cargo container leasing investment.
Financing. Nicor and its gas distribution subsidiary maintain short-term credit
agreements with major domestic and foreign banks. At June 30, 2000, these
agreements, which serve as backup for the issuance of commercial paper, totaled
$342.5 million and the company had $56.0 million of commercial paper
outstanding.
In January 2000, Nicor Gas issued $50 million of adjustable rate unsecured notes
due in 2001 at an initial rate of 6.11% to fund the redemption of $50 million of
unsecured notes at 5.065% that matured in January 2000.
Under an existing common stock repurchase program, Nicor purchased and retired
630,000 common shares during the second quarter of 2000 at an aggregate cost of
$21.8 million. For the six-month period, Nicor purchased 916,000 common shares
at an aggregate cost of $31.3 million. In July of 2000, Nicor announced another
$50 million common stock repurchase program. Purchases are being made as market
conditions permit through open market transactions and to the extent cash flow
is available after other investment opportunities.
Effective with the dividend paid on May 1, 2000, Nicor's quarterly dividend on
common stock was increased to 41.5 cents per share. This payment represents an
annual rate of $1.66 per share, which is 6.4 percent higher than the $1.56 rate
established with the May 1, 1999 dividend.
OTHER
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, 1999.
New Accounting Pronouncement. In June 1998, the Financial Accounting Standards
Board issued Statement No. 133, Accounting for Derivative Instruments and
Hedging Activities. The company has substantially completed an evaluation of the
impact the statement will have on the company's financial condition and results
of operations and has concluded that it will not be material. For further
information see New Accounting Pronouncement on page 5.
Nicor Inc. Page 11
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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.
Three months ended Six months ended
June 30 June 30
--------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Operating revenues (millions):
Sales
Residential $ 171.1 $ 128.2 $ 558.4 $ 472.4
Commercial 30.1 25.1 106.0 101.7
Industrial 4.3 3.2 15.4 15.0
--------- --------- --------- ---------
205.5 156.5 679.8 589.1
--------- --------- --------- ---------
Transportation
Residential 1.3 .3 2.2 .3
Commercial 15.6 13.8 40.4 36.3
Industrial 10.9 9.8 22.8 21.4
Other 1.4 1.1 3.7 2.2
--------- --------- --------- ---------
29.2 25.0 69.1 60.2
--------- --------- --------- ---------
Revenue taxes and other 28.4 21.9 87.8 66.8
--------- --------- --------- ---------
$ 263.1 $ 203.4 $ 836.7 $ 716.1
========= ========= ========= =========
Deliveries (Bcf):
Sales
Residential 28.7 26.3 118.9 126.7
Commercial 5.2 5.4 22.3 26.5
Industrial .7 .6 3.4 4.2
--------- --------- --------- ---------
34.6 32.3 144.6 157.4
--------- --------- --------- ---------
Transportation
Residential .5 .1 1.4 .1
Commercial 13.5 12.0 50.2 46.1
Industrial 37.2 41.0 81.4 87.0
--------- --------- --------- ---------
51.2 53.1 133.0 133.2
--------- --------- --------- ---------
85.8 85.4 277.6 290.6
========= ========= ========= =========
Customers at end of period (thousands):
Sales
Residential 1,722.9 1,729.7
Commercial 93.0 104.2
Industrial 6.2 7.1
--------- ---------
1,822.1 1,841.0
--------- ---------
Transportation
Residential 55.9 17.0
Commercial 72.5 59.6
Industrial 7.7 6.9
--------- ---------
136.1 83.5
--------- ---------
1,958.2 1,924.5
========= =========
Other statistics:
Degree days 619 491 3,204 3,365
Colder (warmer) than normal (10)% (29)% (17)% (13)%
Average gas cost per Mcf sold $ 3.80 $ 2.54 $ 3.44 $ 2.53
Nicor Inc. Page 12
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Concluded)
SHIPPING STATISTICS
Three months ended Six months ended
June 30 June 30
--------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
TEUs shipped (thousands):
Southbound 34.5 29.7 67.7 59.9
Northbound 4.5 4.6 8.6 9.2
Interisland 1.7 2.3 3.6 4.5
--------- --------- --------- ---------
40.7 36.6 79.9 73.6
========= ========= ========= =========
Other statistics:
Revenue per TEU $ 1,488 $ 1,493 $ 1,496 $ 1,475
Ports served 24 23
Vessels owned 13 13
<PAGE>
Nicor Inc. Page 13
Item 3. Quantitative and Qualitative Disclosures about Market Risk
For disclosures about market risk, see Market Risk on page 10, which is
incorporated herein by reference.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of the company was held on April 20, 2000,
for the purpose of electing the Board of Directors. Proxies for the meeting were
solicited pursuant to Section 14(a) of the Securities Exchange Act of 1934 and
there has been no solicitation in opposition to management's solicitation. The
results of the voting as reported below are for shares eligible to vote as of
the record date, February 23, 2000. There were no "broker nonvotes."
All of management's nominees for directors as listed in the proxy statement were
elected as indicated below:
Shares Shares
Voted Voted
Nominee FOR WITHHELD
-------------------------- ------------- ------------
Robert M. Beavers, Jr. 40,774,952 509,643
Bruce P. Bickner 40,795,399 492,805
John H. Birdsall, III 40,778,197 505,687
Thomas A. Donahoe 40,769,646 510,424
Thomas L. Fisher 40,759,564 526,924
John E. Jones 40,730,124 542,404
Dennis J. Keller 40,775,542 509,021
William A. Osborn 40,764,430 519,760
Sidney R. Petersen 40,683,691 583,808
John Rau 40,769,489 513,485
Patricia A. Wier 40,741,783 536,714
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index on page 15 filed herewith.
(b) The company did not file a report on Form 8-K during the second quarter
of 2000.
<PAGE>
Nicor Inc. Page 14
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Nicor Inc.
Date August 8, 2000 By KATHLEEN L. HALLORAN
-------------- ---------------------------
Kathleen L. Halloran
Executive Vice President,
Finance and Administration
and Secretary
<PAGE>
Nicor Inc. Page 15
Exhibit Index
Exhibit
Number Description of Document
10.01 Form of Change-in-Control Agreement, dated June 2, 2000, between Nicor and
Mr. Fisher, Mr. Cali and Ms. Halloran.
10.02 Retirement Agreement, dated May 2, 2000, between Nicor and Mr. Cyranoski.
27.01 Financial Data Schedule.
