NICOR Inc. (GAS, Financial) filed Quarterly Report for the period ended 2010-03-31.
Nicor Inc. has a market cap of $1.97 billion; its shares were traded at around $43.51 with a P/E ratio of 14.65 and P/S ratio of 0.74. The dividend yield of Nicor Inc. stocks is 4.27%. Nicor Inc. had an annual average earning growth of 0.7% over the past 10 years.GAS is in the portfolios of Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Jeremy Grantham of GMO LLC.
Gas distribution operating revenues are impacted by changes in natural gas costs, which are passed directly through to customers without markup, subject to ICC review. Gas distribution operating revenues increased $84.8 million for the three months ended March 31, 2010 compared to the prior year due primarily to higher natural gas costs (approximately $115 million increase) and the impact of the increase in base rates (approximately $14 million increase), partially offset by warmer weather (approximately $50 million decrease).
Gas distribution margin increased $14.0 million for the three months ended March 31, 2010 compared to the prior year due to the impact of the increase in base rates (approximately $14 million increase) and higher revenue from cost recovery riders ($5.6 million attributable to the energy efficiency program and $3.4 million attributable to the bad debt rider), partially offset by the impact of warmer weather (approximately $5 million decrease) and lower interest on customer balances (approximately $2 million decrease).
Gas distribution operating and maintenance expense. Gas distribution operating and maintenance expense decreased $26.8 million for the three months ended March 31, 2010 compared to the prior year due primarily to lower bad debt expense ($22.7 million decrease) and lower company use and storage-related gas costs ($6.5 million decrease), partially offset by costs associated with the energy efficiency program ($5.6 million). Bad debt expense for three months ended March 31, 2010 was $1.4 million compared to $24.1 million in the prior year. Bad debt expense in 2010 includes the recognition of the $31.7 million benefit associated with the net under recovery of bad debt expense from 2008 and 2009; $29.7 million, based on gas distribution revenues recognized in the quarter, of the approximately $63 million annual expense assumed to be collected through base rates; and $3.4 million of expense which is equal to the revenue billed under the bad debt rider.
Shipping operating expenses. Shipping operating expenses increased $1.2 million for the three months ended March 31, 2010 compared to the prior year due to higher transportation-related costs ($3.5 million increase, largely attributable to higher fuel prices) and higher repairs and maintenance costs ($0.7 million increase), partially offset by lower charter costs ($3.0 million decrease).
Income tax expense. In 2006, the company reorganized certain shipping and related operations. The reorganization allows the company to take advantage of certain provisions of the Jobs Act that provide the opportunity for tax savings subsequent to the date of the reorganization. Generally, to the extent foreign shipping earnings are not repatriated to the United States, such earnings are not expected to be subject to current taxation. In addition, to the extent such earnings are determined to be indefinitely reinvested offshore, no deferred income tax expense would be recorded by the company. For the three months ended March 31, 2010 and 2009, income tax expense (benefit) has not been provided on approximately ($3) million and $5 million, respectively, of foreign company shipping earnings (loss). As of March 31, 2010, Nicor has not recorded deferred income taxes of approximately $57 million on approximately $162 million of cumulative undistributed foreign earnings.
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Nicor Inc. has a market cap of $1.97 billion; its shares were traded at around $43.51 with a P/E ratio of 14.65 and P/S ratio of 0.74. The dividend yield of Nicor Inc. stocks is 4.27%. Nicor Inc. had an annual average earning growth of 0.7% over the past 10 years.GAS is in the portfolios of Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
Health Care Reform Legislation. The Health Care Act contains a provision that eliminates the tax deduction related to Medicare Part D subsidies received after 2012. Federal subsidies are provided to sponsors of retiree health benefit plans, such as Nicor Gas, that provide a benefit at least actuarially equivalent to the benefits under Medicare Part D. Such subsidies have reduced the company s actuarially determined projected benefit obligation and annual net periodic benefit costs. Due to the change in taxation, in the first quarter of 2010 Nicor Gas reduced deferred tax assets by $17.5 million, reversed an existing regulatory income tax liability of $10.0 million, established a regulatory income tax asset of $7.0 million and recognized a $0.5 million charge to income tax expense. Beginning in 2010, the change in taxation will also reduce earnings by an estimated $1.5 million annually for periods subsequent to the enactment date.Gas distribution operating revenues are impacted by changes in natural gas costs, which are passed directly through to customers without markup, subject to ICC review. Gas distribution operating revenues increased $84.8 million for the three months ended March 31, 2010 compared to the prior year due primarily to higher natural gas costs (approximately $115 million increase) and the impact of the increase in base rates (approximately $14 million increase), partially offset by warmer weather (approximately $50 million decrease).
Gas distribution margin increased $14.0 million for the three months ended March 31, 2010 compared to the prior year due to the impact of the increase in base rates (approximately $14 million increase) and higher revenue from cost recovery riders ($5.6 million attributable to the energy efficiency program and $3.4 million attributable to the bad debt rider), partially offset by the impact of warmer weather (approximately $5 million decrease) and lower interest on customer balances (approximately $2 million decrease).
Gas distribution operating and maintenance expense. Gas distribution operating and maintenance expense decreased $26.8 million for the three months ended March 31, 2010 compared to the prior year due primarily to lower bad debt expense ($22.7 million decrease) and lower company use and storage-related gas costs ($6.5 million decrease), partially offset by costs associated with the energy efficiency program ($5.6 million). Bad debt expense for three months ended March 31, 2010 was $1.4 million compared to $24.1 million in the prior year. Bad debt expense in 2010 includes the recognition of the $31.7 million benefit associated with the net under recovery of bad debt expense from 2008 and 2009; $29.7 million, based on gas distribution revenues recognized in the quarter, of the approximately $63 million annual expense assumed to be collected through base rates; and $3.4 million of expense which is equal to the revenue billed under the bad debt rider.
Shipping operating expenses. Shipping operating expenses increased $1.2 million for the three months ended March 31, 2010 compared to the prior year due to higher transportation-related costs ($3.5 million increase, largely attributable to higher fuel prices) and higher repairs and maintenance costs ($0.7 million increase), partially offset by lower charter costs ($3.0 million decrease).
Income tax expense. In 2006, the company reorganized certain shipping and related operations. The reorganization allows the company to take advantage of certain provisions of the Jobs Act that provide the opportunity for tax savings subsequent to the date of the reorganization. Generally, to the extent foreign shipping earnings are not repatriated to the United States, such earnings are not expected to be subject to current taxation. In addition, to the extent such earnings are determined to be indefinitely reinvested offshore, no deferred income tax expense would be recorded by the company. For the three months ended March 31, 2010 and 2009, income tax expense (benefit) has not been provided on approximately ($3) million and $5 million, respectively, of foreign company shipping earnings (loss). As of March 31, 2010, Nicor has not recorded deferred income taxes of approximately $57 million on approximately $162 million of cumulative undistributed foreign earnings.
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