Nicor Inc.
                                                                  Form 10-K/A
                                                                  Exhibit 99.02





                   Report of Independent Public Accountants



To the Nicor Gas Savings Investment
  Plan Committee:


We have audited the accompanying statements of net assets available for benefits
of the Nicor Gas Savings  Investment 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 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 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.


ARTHUR ANDERSEN LLP
Arthur Andersen LLP



Chicago, Illinois
June 23, 2000










                                    - 1 -

                    Nicor Gas Savings Investment Plan

             Statements of Net Assets Available for Benefits

                                                    December 31
                                          ---------------------------------
                                              1999                1998
                                          -------------       -------------
Assets:
    Investment in the Trust               $ 146,193,352       $ 135,845,823

    Receivables:
      Participant contributions                 156,448             135,039
      Employer contributions                     86,898              76,976
                                          -------------       -------------
                                                243,346             212,015
                                          -------------       -------------

Net assets available for benefits         $ 146,436,698       $ 136,057,838
                                          =============       =============




        Statements of Changes in Net Assets Available for Benefits

                                               Year ended December 31
                                          ---------------------------------
                                              1999                1998
                                          -------------       -------------
Net increase in Plan assets from
  investment activities of the Trust      $  14,045,350       $  13,842,952

Contributions:
  Participant                                 5,091,528           3,793,375
  Employer                                    2,251,401           1,943,374
                                          -------------       -------------
                                              7,342,929           5,736,749

Distributions to participants               (11,774,889)        (12,274,845)

Transfers, net and other                        765,470             355,699
                                          -------------       -------------
Net increase                                 10,378,860           7,660,555

Net assets available for benefits at
  beginning of year                         136,057,838         128,397,283
                                          -------------       -------------
Net assets available for benefits at
  end of year                             $ 146,436,698       $ 136,057,838
                                          =============       =============


The accompanying notes are an integral part of these statements.




                                  -2-




                      Nicor Gas Savings Investment Plan
                      Notes to the Financial Statements

PLAN INFORMATION

The following  description of the Nicor Gas Savings  Investment  Plan (the Plan)
provides  only  general  information.  Participants  should  refer  to the  Plan
agreement for more detailed information.

The Plan. The Plan is a defined  contribution plan which was established on July
1, 1973,  to provide  supplemental  retirement  security  to  substantially  all
employees of Nicor Gas Company (the  Company),  not  represented by a collective
bargaining agreement. The funds of the Plan are commingled with the funds of the
Nicor Gas Thrift Plan and held for  safekeeping  and investment by the Nicor Gas
Savings  Investment  and Thrift  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  either  tax-deferred  or
after-tax contributions,  or any combination thereof, by payroll deduction, that
are partially  matched by the Company.  For employees hired on and after January
1, 1998, the Company makes an additional annual contribution. Beginning in 1998,
the Plan began to accept certain rollovers.  Participants  direct the investment
of their contributions into various investment options offered by the Plan.

Participant  loans.  Beginning  in 1998,  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 six months 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  interest
rate at December 31, 1999 and 1998 was 9.5 percent.

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.  Forfeitures for 1999 and 1998 totaled $25,875 and
$53,517, respectively.

Suspensions and withdrawals.  The participant may suspend contributions and will
not cease to be a participant during the suspension period.

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.


                                    - 3 -


<PAGE>



                      Nicor Gas Savings Investment Plan
                Notes to the Financial Statements (Continued)


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.

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 6.8
percent.

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.

Allocation provisions. The Trust's net investment gain (loss) is allocated daily
to the Plan based on the  beginning  ratio of the Plan's  investment  balance to
total Trust investments.

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.

INCOME TAXES

The Internal Revenue Service has determined and informed the Company by a letter
dated  January 16, 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.

NET TRANSFER FROM NICOR GAS THRIFT PLAN

If an employee transfers between the Plans, their account balance is transferred
into a new account in their current  plan.  During 1999 and 1998, a net transfer
of $822,994 and $165,468,  respectively, was made from the Nicor Gas Thrift Plan
to the Nicor Gas Savings Investment Plan.





                                    - 4 -


<PAGE>


                      Nicor Gas Savings Investment Plan
                Notes to the Financial Statements (Continued)


TRUST FINANCIAL INFORMATION

The following  schedules  present the Trust's net assets as of December 31, 1999
and 1998,  the  increase  in the  Trust's  net assets  derived  from  investment
activities for the years then ended and the Plan's share of each:

                             Net Assets in Trust

                                                  December 31
                                        --------------------------------
                                            1999               1998
                                       --------------     -------------
         Assets:

         General Investments:
            Group annuity contracts     $ 112,587,125     $ 118,233,043
            Common/collective trusts*      21,990,550        21,115,362
            Nicor Inc. common stock*       23,080,168        23,011,419
            Registered investment
              companies*                  104,432,679        87,804,603
            Loans to participants*          3,797,948         3,051,418

         Other assets                         349,741           425,832
                                        -------------     -------------

                                          266,238,211       253,641,677

         Liabilities:

         Operating payables                    94,739           240,545
                                        -------------     -------------

         Net assets in Trust            $ 266,143,472     $ 253,401,132
                                        =============     =============

         Plan's interest in Trust net
           assets                       $ 146,193,352     $ 135,845,823
                                        =============     =============

* Includes Party-in-Interest Investments.










                                  - 5 -

<PAGE>


                      Nicor Gas Savings Investment Plan
                Notes to the Financial Statements (Concluded)


                         Trust Investment Activities



                                             Year Ended December 31
                                        -------------------------------
                                             1999              1998
                                         ------------      ------------
    Investment income:
      Interest                           $  8,388,351      $  8,400,725
      Dividends                               967,266           844,741
      Net change in market value
        of Nicor Inc. common stock         (5,779,130)          (65,239)
      Net investment gain from
        common/collective trusts              193,751           996,540
      Net investment gain from
        registered investment companies    19,329,540        14,475,016
                                         ------------      ------------

                                           23,099,778        24,651,783

      Administrative expenses                (308,720)         (223,153)
                                        -------------     -------------

      Increase in Trust net assets
        derived from investment
        activities                      $  22,791,058     $  24,428,630
                                        =============     =============

      Plan's interest in Trust
        investment activities           $  14,045,350     $  13,842,952
                                        =============     =============










                                    - 6 -