UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 2003
or
[ ] Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission file number 1-7297
Birdsall, Inc. Retirement Savings Plan
A. Full title of the plan and address of the plan, if different from
that of the issuer named below:
Birdsall, Inc. Retirement Savings Plan
B. Name of the issuer of the securities held pursuant to the plan
and the address of its principal executive office:
Nicor Inc.
1844 Ferry Road
Naperville, Illinois 60563-9600
Table of Contents
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Financial Information
Birdsall, Inc. Retirement Savings Plan
Cover Page.................................................. 1
Report of Independent Registered Public Accounting Firm..... 2
Financial Statements........................................ 3
Notes to the Financial Statements........................... 5
Schedule of Assets Held at End of Year...................... 9
Other Information
Signature................................................... 11
Exhibit Index............................................... 12
BIRDSALL, INC. RETIREMENT SAVINGS PLAN
Financial Statements as of and for the
Years ended December 31, 2003 and 2002
Additional information required for Form 5500
for the year ended December 31, 2003
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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,
2003 and 2002, and the related statements of changes in net assets available for
benefits 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 standards of the Public Company
Accounting Oversight Board (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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2003 and 2002, 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 of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2003 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is 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. This schedule is the responsibility of the Plan's
management. Such schedule has been subjected to the auditing procedures applied
in our audit of the basic 2003 financial statements and, in our opinion, is
fairly stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
DELOITTE & TOUCHE LLP
Fort Lauderdale, Florida
June 25, 2004
2
Birdsall, Inc. Retirement Savings Plan
Statements of Assets Available for Benefits
December 31
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2003 2002
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Assets:
Participant-directed investments (Note 3) $43,096,233 $ 35,344,042
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Receivables:
Employer contributions 402,778 400,104
Participant contributions 48,014 62,242
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450,792 462,346
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Total assets 43,547,025 35,806,388
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Liabilities:
Operating payables 6,668 6,925
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Total liabilities 6,668 6,925
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Net assets available for benefits $43,540,357 $35,799,463
============ ============
The accompanying notes to the financial statements are an integral part
of these financial statements.
3
Birdsall, Inc. Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
Year Ended December 31
---------------------------
2003 2002
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Additions:
Investment income (loss)
Dividends $ 174,666 $ 113,583
Interest 539,990 653,467
Net appreciation (depreciation) in fair
value of Nicor Inc. common stock 79,332 (40,628)
Net investment gain from common/collective
trusts 378,393 261,159
Net investment gain (loss) from registered
investment companies 4,148,022 (3,518,176)
Other 2 (849)
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Net investment gain (loss) 5,320,405 (2,531,444)
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Contributions:
Participants 2,497,635 2,212,235
Employer 1,613,612 1,554,842
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4,111,247 3,767,077
Other 179 56
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Total additions 9,431,831 1,235,689
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Deductions:
Distributions to participants 1,590,833 1,840,673
Administrative expenses and other 100,104 118,762
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Total deductions 1,690,937 1,959,435
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Net Increase (decrease) 7,740,894 (723,746)
Net assets available for benefits at
beginning of year 35,799,463 36,523,209
------------ ------------
Net assets available for benefits at end
of year $43,540,357 $35,799,463
============ ============
The accompanying notes to the financial statements are an integral part
of these financial statements.
4
Birdsall, Inc. Retirement Savings Plan
Notes to the Financial Statements
For the Years Ended December 31, 2003 and 2002
1. DESCRIPTION OF THE PLAN
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 a defined contribution plan and is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended
("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. The Vanguard Fiduciary Trust Company serves as trustee
for the Trust and holds the investments of the Plan under the terms of a trust
agreement. The Vanguard Fiduciary Trust Company also acts as investment manager
for certain investments of the Plan. Administrative expenses associated with the
operation of the Plan are paid from Plan assets.
Contributions. The participants 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 contributes annual
discretionary profit sharing awards allocated equally to eligible participants,
which were $374,813 and $376,152 for the years ended December 31, 2003 and 2002,
respectively. In addition, the Plan accepts certain rollovers. Participants
direct the investment of their contributions and account balances into various
investment options offered by the Plan.
Investments. The Plan's investment options currently include the Nicor Company
Stock Fund, a Stated Return Fund, and approximately 20 mutual funds.
Participant accounts. Individual accounts are maintained for each Plan
participant. Each participant's account is increased by the participant's
contributions, Company contributions and allocated plan earnings, and decreased
by withdrawals, allocated plan investment losses and administrative expenses.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
5
Birdsall, Inc. Retirement Savings Plan
Notes to the Financial Statements
For the Years Ended December 31, 2003 and 2002
Participant loans. Participants may borrow up to the lesser of $50,000 or 50% of
their vested account balance from their accounts. Loans are repayable through
payroll deductions over periods ranging up to 60 months. The interest rate is
the prime rate plus 1 percent and is fixed over the term of the loan.
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 three 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. At December 31, 2003 and 2002, the Plan's assets included
forfeited nonvested accounts totaling $11,092 and $14,423 respectively, to be
used to reduce future Company contributions.
Payment of benefits. On termination of service due to retirement, disability, or
death, a participant may elect to receive either a lump-sum amount equal to the
participant's vested interest in his or her account balance, or annual
installments over a specified period. For termination of service for other
reasons, a participant has the option to receive the value of the vested
interest in his or her account as an immediate lump-sum distribution or defer
receipt to no later than the age of 70-1/2.
Suspensions and withdrawals. A participant may suspend contributions and will
not cease to be a participant during the suspension period.
A participant may elect, under certain conditions, to withdraw certain
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.
2. ACCOUNTING POLICIES
Basis of accounting. The financial statements of the Plan have been prepared on
the accrual basis of accounting.
6
Birdsall, Inc. Retirement Savings Plan
Notes to the Financial Statements
For the Years Ended December 31, 2003 and 2002
Use of estimates. The preparation of financial statements in accordance with
accounting policies generally accepted in the United States of America requires
management to make estimates that affect the reported amounts. Actual results
could differ from those estimates.
Investment valuation. The Plan states its investment in the Trust at the
underlying fair 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 Stated Return Fund is primarily composed of group annuity contracts and
investments in common/collective trusts. Group annuity contracts are fully
benefit responsive and 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 contract value of the
group annuity contracts at December 31, 2003 and 2002 approximated market 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. Of the years
ended December 31, 2003 and 2002, the average yield on the contracts, which
equals the average crediting interest, was 6.9% and 6.6 % respectively. There
are no reserves against contract value for credit risk of the issuers of
contracts or otherwise.
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.
Market risk. The Plan has investments that generally are exposed to various
risks, such as interest rate, credit and overall market volatility risks. Due to
the level of risk associated with certain investment securities, it is
reasonably possible that changes in their values will occur in the near term and
such changes could materially affect the amounts reported in the statements of
net assets available for benefits.
7
Birdsall, Inc. Retirement Savings Plan
Notes to the Financial Statements (concluded)
For the Years Ended December 31, 2003 and 2002
3. INVESTMENTS
Plan investments as of December 31 are as follows:
2003 2002
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Pacific Life Insurance Company group
annuity contract $ 4,650,330** $ 4,320,886**
Allstate Life Insurance Company group
annuity contract - 1,988,374**
Travelers Insurance Company group
annuity contract 1,779,564 1,779,274
Vanguard 500 Index Fund* 11,515,373** 8,145,302**
Vanguard Balanced Index Investment Fund* 5,469,768** 4,082,470**
Other registered investment companies 5,618,084** 3,697,343
NICOR Inc. common stock* 2,890,717** 3,173,263**
Vanguard Retirement Savings Trust* 9,988,520** 6,941,761**
Loans to participants 1,183,877 1,215,369
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Total $ 43,096,233 $ 35,344,042
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* Party-in-interest investment
** Indicates an investment that represents 5% or more of the
Plan's net assets
4. INCOME TAXES
The Internal Revenue Service has determined and informed the Company by a letter
dated June 26, 2003 that the Plan and related Trust as then designed was tax
exempt under Section 401(a) of the Internal Revenue Code (the "Code"). The Plan
has been amended since receiving the determination letter; however, 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. Therefore, no
provision for income taxes has been included in the Plan's financial statements.
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
Pending distributions are recorded as a liability in the Plan's Form 5500;
however, they are not recognized as liabilities for financial statement
purposes. These distributions are reflected in the statements of changes in net
assets available for benefits when actually paid.
8
Birdsall, Inc. Retirement Savings Plan
Form 5500 Schedule H, Part IV, Line 4(i) -
Schedule of Assets (Held at End of Year)
December 31, 2003
Identity of Issue,
Borrower
or Similar Party Description of Investment Current Value
- ------------------------- -------------------------------- ---------------
Pacific Life Insurance Group annuity contract: $ 4,650,330
Company maturing March 2005;
7.57% fixed interest rate
Travelers Insurance Group annuity contract: 1,779,564
Company maturing March 2004;
6.14% fixed interest rate
(A)Nicor Inc. Common stock at $2.50 par value 2,890,717
(A)Participant Notes Participant loans earning interest 1,183,877
Receivable from 5.00% - 10.50%
(A)AIM Aggressive Growth Registered investment company 22,370
Fund
(A)American Century Int'l Registered investment company 575,183
Growth
(A)American Century Registered investment company 25,273
Equity Growth
(A)Davis New York Venture Registered investment company 287,863
(A)Fidelity Blue Chip Registered investment company 77,663
Growth Fund
(A)INVESCO Dynamics Fund Registered investment company 140,527
(A)Janus Fund Registered investment company 197,924
(A)Liberty Acorn Int'l Registered investment company 37,420
(A)Liberty Acorn USA Fund Registered investment company 196,811
(A)Managers Special Equity Registered investment company 1,635,568
9
Birdsall, Inc. Retirement Savings Plan (Continued)
Form 5500 Schedule H, Part IV, Line 4(i) -
Schedule of Assets (Held at End of Year)
December 31, 2003
Identity of Issue,
Borrower
or Similar Party Description of Investment Current Value
- -------------------------- ------------------------------ ---------------
(A)Vanguard 500 Index Inv Registered investment company 11,515,373
(A)Vanguard Asset Registered investment company 22,941
Allocation Fund
(A)Vanguard Balanced Index Registered investment company 5,469,768
Fund
(A)Vanguard Devel Mkts Registered investment company 62,908
Index
(A)Vanguard GNMA Investors Registered investment company 122,599
Shares
(A)Vanguard Growth Equity Registered investment company 343,272
Fund
(A)Vanguard Growth Index Registered investment company 58,232
Inv
(A)Vanguard LT Treasury Registered investment company 297,420
Inv
(A)Vanguard PRIMECAP Fund Registered investment company 385,565
(A)Vanguard Total Bond Registered investment company 968,157
Market Ind
(A)Vanguard Prime Money Registered investment company 160,388
Mkt Fund
(A)Vanguard Retirement Common collective trust 9,988,520
Savings Trust
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Total $ 43,096,233
============
(A)Denotes party-in-interest investment
10
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Birdsall, Inc. Retirement Savings Plan
Date June 25, 2004 /s/ ROBERT MARK CHAPMAN
------------------ -----------------------------------
Robert Mark Chapman
Plan Administrator and
Vice President Pricing and
Organization Support,
Birdsall, Inc.
11
Exhibit Index
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Exhibit
Number Description of Document
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23.01 Independent Registered Public Accounting Firm
Consent - Birdsall, Inc. Retirement Savings Plan
12