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**FORM        10-K**

| [X]    | ANNUAL                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
|--------|----------------------------------------------------------------------------------|
|   | EXCHANGE                  ACT OF 1934                                            |

**For        the fiscal year ended December 31, 2006**

| [                  ] | TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
|----------------------|---------------------------------------------------------------------------|
|                 | SECURITIES                  EXCHANGE ACT OF 1934                          |

**NORTHERN        ILLINOIS GAS COMPANY**

**(Doing        Business as NICOR GAS COMPANY)**

| **Illinois**                                               |   | **36-2863847**                                         |
|------------------------------------------------------------|--------|--------------------------------------------------------|
| (State                  of Incorporation)                  |   | (I.R.S.                  Employer                      |
|                                                       |   | Identification                  Number)                |
|                                                       |   |                                                   |
| **1844                  Ferry Road**                       |   |                                                   |
| **Naperville,                  Illinois 60563-9600**  |   | **(630)                  983-8888**                    |
| (Address                  of principal executive offices)  |   | (Registrant’s                  telephone number) |

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**Nicor        Gas Company**

**Table        of Contents**

| **Item                  No.**** ** | **Description**                                                                                                                                                       | **Page                  No.** |
|-----------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|
|                                    |                                                                                                                                                                  |                          |
|                                    | **Glossary**                                                                                                                                                          | ii                            |
|                                    |                                                                                                                                                                  |                          |
|                                    | **Part                  I**                                                                                                                                           |                          |
| 1.                                      | Business                                                                                                                                                              | 1                             |
| 1A.                                     | Risk                  Factors                                                                                                                                         | 4                             |
| 1B.                                     | Unresolved                  Staff                  Comments                                                                                                           | 7                             |
| 2.                                      | Properties                                                                                                                                                            | 7                             |
| 3.                                      | Legal                  Proceedings                                                                                                                                    | 8                             |
| 4.                                      | Submission                  of Matters to a Vote of Security Holders                                                                                                  | *                             |
|                                    |                                                                                                                                                                  |                          |
|                                    | **Part                  II**                                                                                                                                          |                          |
| 5.                            | Market                  for Registrant’s Common Equity,                  Related Stockholder Matters and Issuer Purchases of Equity                  Securities | 8                             |
| 6.                                      | Selected                  Financial Data                                                                                                                              | *                             |
| 7.                                      | Management’s                  Discussion and Analysis of Financial                  Condition and Results of Operations                                         | 8                             |
| 7A.                                     | Quantitative                  and Qualitative Disclosures about Market                  Risk                                                                          | 20                            |
| 8.                                      | Financial                  Statements and Supplementary Data                                                                                                          | 22                            |
| 9.                                      | Changes                  in and Disagreements with                  Accountants on Accounting and Financial Disclosure                                                | 48                            |
| 9A.                                     | Controls                  and Procedures                                                                                                                              | 48                            |
| 9B.                                     | Other                  Information                                                                                                                                    | 49                            |
|                                    |                                                                                                                                                                  |                          |
|                                    | **Part                  III**                                                                                                                                         |                          |
| 10.                                     | Directors                  and Executive Officers of the Registrant                                                                                                   | *                             |
| 11.                                     | Executive                  Compensation                                                                                                                               | *                             |
| 12.                                     | Security                  Ownership of Certain Beneficial Owners and Management and Related                  Stockholder Matters                                      | *                             |
| 13.                                     | Certain                  Relationships and Related Transactions                                                                                                       | *                             |
| 14.                                     | Principal                  Accountant Fees and                  Services                                                                                              | 50                            |
|                                    |                                                                                                                                                                  |                          |
|                                    | **Part                  IV**                                                                                                                                          |                          |
| 15.                                     | Exhibits                  and Financial Statement Schedules                                                                                                           | 51                            |
|                                    | Signatures                                                                                                                                                            | 53                            |
|                                    | Supplemental                  Information                                                                                                                             | 54                            |
|                                    | Exhibit                  Index                                                                                                                                        | 55                            |

| * | The                  Registrant meets the conditions set forth in General Instruction                  I(1)(a)                  and (b) of Form 10-K and is therefore omitting the information                  called for                  by the otherwise required item. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table            of Contents

**Nicor        Gas Company**

**Glossary**

**ARO.**

**Chicago        Hub. **

**Degree        day.**

**FASB.        **

**FERC.        **

**FSP.        **

**ICC.        **

**IRS.**

**LIFO.**

**Mcf,        MMcf, Bcf. **

**MMBtus.        **

**Nicor        Gas. **

**Nicor.        **

**PBR.        **

**PGA.        **

**SEC.        **

**SFAS.        **

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Table            of Contents

**PART        I **

**Item        1.    **
**Business**

**GENERAL**

**SOURCES        OF NATURAL GAS SUPPLY**

**Natural        gas supply.**

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**Pipeline        transportation. **

|                                                   |   | Availability |   | Contract                  Expiration                |
|--------------------------------------------------------|--------|--------------|--------|-----------------------------------------------------|
| Natural                  Gas Pipeline Company (NGPL)   |   | 968,000      |   | Various                  dates through March 2012   |
| Horizon                  Pipeline                      |   | 300,000      |   | May                  2012                           |
| Tennessee                  Gas Pipeline Company (TGPC) |   | 253,000      |   | October                  2009                       |
| Midwestern                  Gas Transmission Company   |   | 297,000      |   | Various                  dates through October 2009 |
| Northern                  Natural Gas Company          |   | 206,000      |   | October                  2008                       |
| ANR                  Pipeline                          |   | 100,000      |   | Various                  dates through March 2010   |
| Texas                  Gas                             |   | 47,000       |   | March                  2009                         |

**Storage.**

**COMPETITION/DEMAND**

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**REGULATION**

| **·  ** | Base                  rates, which are set by the ICC, are designed to allow the company                  an                  opportunity to recover its costs and earn a fair return for investors.                  In                  the fourth quarter of 2005, the company received approval from                  the ICC for                  a base rate increase. For additional information about the rate                  order, see                  Item 7 - Management’s Discussion and Analysis of Financial Condition and                  Results of Operations and Item 8 - Notes to the Consolidated Financial                  Statements - Note 14 - Rate                  proceeding. |
|------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                  company’s ICC-approved tariffs provide that the cost of natural gas                  purchased for customers will be fully charged to customers without                  markup.                  Therefore, the company does not profit from the sale of natural                  gas.                  Rather, the company earns income from fixed monthly charges and                  from                  variable transportation charges for delivering natural gas to customer                  premises. Annually, the ICC initiates a review of the company’s natural                  gas purchasing practices for prudence, and may disallow the pass-through                  of costs considered imprudent. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | As                  with the cost of natural gas, the company has a tariff that provides                  for                  the pass-through of prudently incurred environmental costs related                  to                  former manufactured gas plant sites. This pass-through is also                  subject to                  annual ICC review. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**AVAILABLE        INFORMATION**

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**Item        1A.    ****Risk        Factors**

***Regulation        of Nicor Gas, including changes in the regulatory environment in general,        may        adversely affect the company’s results of operations, cash flows and financial        condition.***

***A        change in the ICC’s approved rate mechanisms for recovery of environmental        remediation costs at former manufactured gas sites, or adverse decisions        with        respect to the prudence of costs actually incurred, could adversely affect        the        company’s results of operations, cash flows and financial        condition.***

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***An        adverse decision in the proceedings concerning Nicor Gas’ PBR Plan could result        in a refund obligation which could adversely affect the company’s results of        operations, cash flows and financial condition.***

***Nicor        Gas relies on direct connections to eight interstate pipelines and extensive        underground storage capacity. If these pipelines or storage facilities were        unable to deliver natural gas for any reason it could impair Nicor Gas’ ability        to meet its customers’ full requirements.***

***Fluctuations        in weather have the potential to adversely affect the company’s results of        operations, cash flows and financial condition.***

***Natural        gas commodity price changes may affect the company’s operating costs and        competitive position, which could adversely affect its results of operations,        cash flows and financial condition.***

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***Nicor        Gas’ use of derivative instruments could adversely affect the company’s results        of operations.***

*Accounting        for Derivative Instruments and Hedging Activities*

***Adverse        decisions in lawsuits seeking a variety of damages allegedly caused by mercury        spillage could adversely affect the company’s results of operations, cash flows        and financial condition.***

***Transporting        and storing natural gas involves numerous risks that may result in accidents        and        other operating risks and costs that could adversely affect the company’s        results of operations, cash flows and financial        condition.***

***An        inability to access financial markets could affect the execution of Nicor        Gas’business plan and could adversely affect the company’s results of operations,        cash flows and financial condition.***

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***Nicor        Gas has credit risk that could adversely affect the company’s results of        operations, cash flows and financial condition.***

***The        company is involved in legal or administrative proceedings before various        courts        and agencies that could adversely affect the company’s results of operations,        cash flows and financial condition.***

**Item        1B.    ****Unresolved        Staff Comments**

**Item        2.      ****Properties**

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**Item        3.    ****Legal        Proceedings**

**PART        II**

**Item        5.    ****Market        for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases        of Equity Securities**

**Item        7.    ****Management's        Discussion and Analysis of Financial Condition and Results of        Operations**

**SUMMARY**

**Rate        proceeding.**

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**RESULTS        OF OPERATIONS**

**Operating        revenues. **

**Margin.        **

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|                                 |   | **2006** |         | 2005   |   | 2004     |   |
|--------------------------------------|--------|----------|--------------|--------|--------|----------|--------|
|                                 |   |     |         |   |   |     |   |   |   |   |
| Revenues                             |   | **$**    | **2,452.3**  |   | $      | 2,909.6  |   | $ | 2,363.9 |   |
| Cost                  of gas         |   |     | **(1,743.7** | **)**  |   | (2,212.4 | )      |   | (1,695.0 | ) |
| Revenue                  tax expense |   |     | **(144.4**   | **)**  |   | (152.0   | )      |   | (139.4 | ) |
| Margin                               |   | **$**    | **564.2**    |   | $      | 545.2    |   | $ | 529.5 |   |

**Operating        and maintenance expense.**

** **
** **

**Mercury-related        costs (recoveries), net. **

**Other        income (expense), net. **

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**Income        tax expense. **

**Interest        expense.**

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| **Nicor                  Gas Company**                                                                                                                         |   |     |        |   |   |    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-------------|--------|--------|---------|--------|
|                                                                                                                                                           |   |     |        |   |   |    |   |
| **Operating                  Statistics**                                                                                                                      |   |     |        |   |   |    |   |
|                                                                                                                                                           |   |     |        |   |   |    |   |
|                                                                                                                                                           |   | **2006** |        | 2005   |   | 2004    |   |
|                                                                                                                                                           |   |     |        |   |   |    |   |   |   |   |
| **Operating                  revenues**(millions)                                                                                                              |   |     |        |   |   |    |   |   |   |   |
| Sales                                                                                                                                                          |   |     |        |   |   |    |   |   |   |   |
| Residential                                                                                                                                                    |   | **$**    | **1,671.1** |   | $      | 2,031.4 |   | $ | 1,625.5 |   |
| Commercial                                                                                                                                                     |   |     | **373.9**   |   |   | 453.5   |   |   | 349.9 |   |
| Industrial                                                                                                                                                     |   |     | **42.8**    |   |   | 61.8    |   |   | 49.3 |   |
|                                                                                                                                                           |   |     | **2,087.8** |   |   | 2,546.7 |   |   | 2,024.7 |   |
| Transportation                                                                                                                                                 |   |     |        |   |   |    |   |   |   |   |
| Residential                                                                                                                                                    |   |     | **32.0**    |   |   | 27.9    |   |   | 23.6 |   |
| Commercial                                                                                                                                                     |   |     | **82.1**    |   |   | 73.1    |   |   | 69.9 |   |
| Industrial                                                                                                                                                     |   |     | **41.0**    |   |   | 39.2    |   |   | 39.9 |   |
| Other                                                                                                                                                          |   |     | **3.7**     |   |   | 11.7    |   |   | 14.0 |   |
|                                                                                                                                                           |   |     | **158.8**   |   |   | 151.9   |   |   | 147.4 |   |
| Other                  revenues                                                                                                                                |   |     |        |   |   |    |   |   |   |   |
| Revenue                  taxes                                                                                                                                 |   |     | **147.7**   |   |   | 156.4   |   |   | 143.5 |   |
| Environmental                  cost recovery                                                                                                                   |   |     | **11.6**    |   |   | 21.0    |   |   | 20.6 |   |
| Chicago                  Hub                                                                                                                                   |   |     | **26.4**    |   |   | 11.5    |   |   | 7.9 |   |
| Other                                                                                                                                                          |   |     | **20.0**    |   |   | 22.1    |   |   | 19.8 |   |
|                                                                                                                                                           |   |     | **205.7**   |   |   | 211.0   |   |   | 191.8 |   |
|                                                                                                                                                           |   | **$**    | **2,452.3** |   | $      | 2,909.6 |   | $ | 2,363.9 |   |
|                                                                                                                                                           |   |     |        |   |   |    |   |   |   |   |
| **Deliveries**(Bcf)                                                                                                                                            |   |     |        |   |   |    |   |   |   |   |
| Sales                                                                                                                                                          |   |     |        |   |   |    |   |   |   |   |
| Residential                                                                                                                                                    |   |     | **185.9**   |   |   | 200.2   |   |   | 204.8 |   |
| Commercial                                                                                                                                                     |   |     | **41.8**    |   |   | 44.7    |   |   | 44.3 |   |
| Industrial                                                                                                                                                     |   |     | **5.0**     |   |   | 6.3     |   |   | 6.4 |   |
|                                                                                                                                                           |   |     | **232.7**   |   |   | 251.2   |   |   | 255.5 |   |
| Transportation                                                                                                                                                 |   |     |        |   |   |    |   |   |   |   |
| Residential                                                                                                                                                    |   |     | **17.0**    |   |   | 18.9    |   |   | 16.6 |   |
| Commercial                                                                                                                                                     |   |     | **80.4**    |   |   | 87.5    |   |   | 84.1 |   |
| Industrial                                                                                                                                                     |   |     | **108.6**   |   |   | 113.0   |   |   | 117.0 |   |
|                                                                                                                                                           |   |     | **206.0**   |   |   | 219.4   |   |   | 217.7 |   |
|                                                                                                                                                           |   |     | **438.7**   |   |   | 470.6   |   |   | 473.2 |   |
|                                                                                                                                                           |   |     |        |   |   |    |   |   |   |   |
| **Year-end                  customers**(thousands)                  (1)                                                                                        |   |     |        |   |   |    |   |   |   |   |
| Sales                                                                                                                                                          |   |     |        |   |   |    |   |   |   |   |
| Residential                                                                                                                                                    |   |     | **1,807**   |   |   | 1,796   |   |   | 1,777 |   |
| Commercial                                                                                                                                                     |   |     | **123**     |   |   | 120     |   |   | 117 |   |
| Industrial                                                                                                                                                     |   |     | **7**       |   |   | 8       |   |   | 7 |   |
|                                                                                                                                                           |   |     | **1,937**   |   |   | 1,924   |   |   | 1,901 |   |
| Transportation                                                                                                                                                 |   |     |        |   |   |    |   |   |   |   |
| Residential                                                                                                                                                    |   |     | **166**     |   |   | 157     |   |   | 148 |   |
| Commercial                                                                                                                                                     |   |     | **57**      |   |   | 58      |   |   | 60 |   |
| Industrial                                                                                                                                                     |   |     | **6**       |   |   | 6       |   |   | 6 |   |
|                                                                                                                                                           |   |     | **229**     |   |   | 221     |   |   | 214 |   |
|                                                                                                                                                           |   |     | **2,166**   |   |   | 2,145   |   |   | 2,115 |   |
|                                                                                                                                                           |   |     |        |   |   |    |   |   |   |   |
| **Other                  statistics**                                                                                                                          |   |     |        |   |   |    |   |   |   |   |
| Degree                  days                                                                                                                                   |   |     | **5,174**   |   |   | 5,783   |   |   | 5,637 |   |
| Warmer                  than normal (2)                                                                                                                        |   |     | **(11**     | **%)** |   | (1      | %)     |   | (6 | %) |
| Average                  gas cost per Mcf sold                                                                                                                 |   | **$**    | **7.44**    |   | $      | 8.74    |   | $ | 6.56 |   |
|                                                                                                                                                           |   |     |        |   |   |    |   |   |   |   |
| (1)                  The company has redefined the customer count methodology in 2006                  in                  conjunction with its new            |   |     |
| customer                  care and billing system.                                                                                                             |   |     |        |   |   |    |   |   |   |   |
|                                                                                                                                                           |   |     |        |   |   |    |   |   |   |   |
| (2)                  Normal weather for Nicor Gas' service territory, for purposes of                  this                  report, is considered to be 5,830 |   |
| degree                  days per year for 2006 and 2005, and 6,000 degree days for 2004.                  On a                  6,000 degree day basis,        |   |     |
| 2006                  and 2005 would have been 14% and 4% warmer than normal,                  respectively.                                                   |   |     |        |   |   |

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Table          of Contents

**FINANCIAL      CONDITION AND LIQUIDITY**

**Operating      cash flows. **

**Investing      activities. **
** **

** **

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Table            of Contents

**Financing      activities. **

|                                     |   |   | Standard                  & Poor’s |   | Moody’s |   | Fitch  |
|------------------------------------------|--------|--------|----------------------------------------------|--------|---------------|--------|--------|
|                                     |   |   |                                         |   |          |   |   |
| Commercial                  Paper        |   |   |                    A-1+                 |   | P-1           |   | F-1+   |
| Senior                  Secured Debt     |   |   | AA                                           |   | A1            |   | AA-    |
| Senior                  Unsecured Debt   |   |   |                    AA-                  |   | A2            |   | A+     |
| Corporate                  Credit Rating |   |   | AA                                           |   | n/a           |   | n/a    |

|                                                                                                           |   | **2006** |     | 2005   |   | 2004 |   |
|----------------------------------------------------------------------------------------------------------------|--------|----------|----------|--------|--------|------|--------|
| Long-term                obligations, net of current maturities, as                a percent of capitalization |   |     | **43.1** | **%**  |   | 40.7 | %      |   | 43.9 | % |
| Times                interest earned, before income taxes                                                      |   |     | **2.9**  |   |   | 2.8  |   |   | 3.5 |   |

*Long-term      debt.*

* *

*Short-term      debt.*

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*Common      stock.*

*Other.*

**Off-balance      sheet arrangements.**

**Contractual      obligations.**

|                                                           |   | Lessthan                1year |   |  1-3years |   |  3-5years |   | Morethan                5years |   |   Total |   |
|----------------------------------------------------------------|--------|-------------------------------|--------|----------------|--------|----------------|--------|--------------------------------|--------|-------------------|--------|
|                                                           |   |                          |   |           |   |           |   |                           |   |              |   |   |   |   |   |   |
| Purchase                obligations                            |   | $                             | 767.0  |           | $      | 410.1          |   | $                              | 48.6   |              | $      | 6.2 |   | $ | 1,231.9 |   |
| Long-term                debt                                  |   |                          | -      |           |   | 125.0          |   |                           | 75.0   |              |   | 300.0 |   |   | 500.0 |   |
| Fixed                interest on long-term                debt |   |                          | 30.7   |           |   | 52.8           |   |                           | 42.6   |              |   | 302.7 |   |   | 428.8 |   |
| Operating                leases                                |   |                          | 1.1    |           |   | 2.0            |   |                           | 1.7    |              |   | 9.2 |   |   | 14.0 |   |
| Other                long-term obligations                     |   |                          | .5     |           |   | 1.0            |   |                           | .7     |              |   | 1.6 |   |   | 3.8 |   |
|                                                           |   | $                             | 799.3  |           | $      | 590.9          |   | $                              | 168.6  |              | $      | 619.7 |   | $ | 2,178.5 |   |

**OUTLOOK**

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**CONTINGENCIES**

*PBR      plan*

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*SEC      and U.S. Attorney Inquiries.*

*Mercury.*

*Manufactured      gas plant sites.*

*Other      contingencies.*
** **

**CRITICAL        ACCOUNTING ESTIMATES**

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**Loss      contingencies. **

**Derivative      instruments. **

**Pension      and other postretirement benefits. **

**Credit        risk. **

**Unbilled        revenues. **

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**Regulatory      assets and liabilities.**
*Accounting      for the Effects of Certain Types of Regulation*

**NEW      ACCOUNTING PRONOUNCEMENTS**

*Employers’      Accounting for Defined Benefit Pension and Other Postretirement Plans,*
*Accounting      for Uncertainty in Income Taxes*
*Fair      Value Measurements*
*Share-Based      Payment. *

**CAUTION      CONCERNING FORWARD-LOOKING STATEMENTS**

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**Item        7A.**     **Quantitative        and Qualitative Disclosures about Market Risk**

*Commodity        price risk.*

*Credit      risk.*

*Interest      rate risk. *

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**Nicor      Gas Company**

**Item      8.    **
**Financial      Statements and Supplementary Data**

|                                                                                  |                                                                          | Page   |
|---------------------------------------------------------------------------------------|-------------------------------------------------------------------------------|--------|
|                                                                                  |                                                                          |   |
| Report                of Independent Registered Public Accounting                Firm | 23                                                                            |
|                                                                                  |                                                                          |   |
| Financial                Statements:                                                  |                                                                          |
|                                                                                  |                                                                          |   |
|                                                                                  | Consolidated                Statements of                Operations           | 25     |
|                                                                                  |                                                                          |   |
|                                                                                  | Consolidated                Statements of Cash                Flows           | 26     |
|                                                                                  |                                                                          |   |
|                                                                                  | Consolidated                Balance Sheets                                    | 27     |
|                                                                                  |                                                                          |   |
|                                                                                  | Consolidated                Statements of                Capitalization       | 28     |
|                                                                                  |                                                                          |   |
|                                                                                  | Consolidated                Statements of Retained                Earnings    | 29     |
|                                                                                  |                                                                          |   |
|                                                                                  | Consolidated                Statements of Comprehensive                Income | 29     |
|                                                                                  |                                                                          |   |
|                                                                                  | Notes                to the Consolidated Financial                Statements  | 30     |

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**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING      FIRM**

*Internal      Control—Integrated Framework *

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Table            of Contents

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM      (concluded)**

*Internal      Control—Integrated Framework *
*Internal      Control—Integrated Framework *
*.*

*/s/      DELOITTE & TOUCHE LLP*

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| **Nicor                Gas Company**                                                           |   |                                  |        |   |   |    |   |
|------------------------------------------------------------------------------------------------|--------|---------------------------------------|-------------|--------|--------|---------|--------|
|                                                                                           |   |                                  |        |   |   |    |   |
| **Consolidated                Statements of                Operations**                        |   |                                  |        |   |   |    |   |
| **(millions)**                                                                                 |   |                                  |        |   |   |    |   |
|                                                                                           |   |                                  |        |   |   |    |   |
|                                                                                           |   | Year                ended December 31 |        |
|                                                                                           |   | **2006**                              |        | 2005   |   | 2004    |   |
| Operating                revenues (includes revenue taxes of                                   |   |                                  |        |   |   |    |   |   |   |   |
| $147.7,                $156.4, and $143.5, respectively)                                       |   | **$**                                 | **2,452.3** |   | $      | 2,909.6 |   | $ | 2,363.9 |   |
|                                                                                           |   |                                  |        |   |   |    |   |   |   |   |
| Operating                expenses                                                              |   |                                  |        |   |   |    |   |   |   |   |
| Cost                of gas                                                                     |   |                                  | **1,743.7** |   |   | 2,212.4 |   |   | 1,695.0 |   |
| Operating                and maintenance                                                       |   |                                  | **267.2**   |   |   | 253.6   |   |   | 233.6 |   |
| Depreciation                                                                                   |   |                                  | **160.1**   |   |   | 154.5   |   |   | 148.8 |   |
| Taxes,                other than income taxes                                                  |   |                                  | **163.1**   |   |   | 171.0   |   |   | 158.5 |   |
| Income                tax expense, net                                                         |   |                                  | **23.6**    |   |   | 24.6    |   |   | 31.7 |   |
| Mercury-related                costs (recoveries), net                                         |   |                                  | **(3.6**    | **)**  |   | .5      |   |   | - |   |
|                                                                                           |   |                                  | **2,354.1** |   |   | 2,816.6 |   |   | 2,267.6 |   |
|                                                                                           |   |                                  |        |   |   |    |   |   |   |   |
| Operating                income                                                                |   |                                  | **98.2**    |   |   | 93.0    |   |   | 96.3 |   |
|                                                                                           |   |                                  |        |   |   |    |   |   |   |   |
| Other                income (expense), net                                                     |   |                                  |        |   |   |    |   |   |   |   |
| Property                sale gains                                                             |   |                                  | **3.3**     |   |   | .4      |   |   | 5.9 |   |
| Interest                income                                                                 |   |                                  | **6.3**     |   |   | 4.3     |   |   | 1.0 |   |
| Other                income                                                                    |   |                                  | **.8**      |   |   | .8      |   |   | .8 |   |
| Other                expense                                                                   |   |                                  | **(1.5**    | **)**  |   | (1.5    | )      |   | (1.5 | ) |
| Performance-based                rate plan                                                     |   |                                  | **-**       |   |   | -       |   |   | (1.8 | ) |
| Income                tax expense on other income                                              |   |                                  | **(4.2**    | **)**  |   | (1.5    | )      |   | (1.4 | ) |
|                                                                                           |   |                                  | **4.7**     |   |   | 2.5     |   |   | 3.0 |   |
|                                                                                           |   |                                  |        |   |   |    |   |   |   |   |
| Interest                expense                                                                |   |                                  |        |   |   |    |   |   |   |   |
| Interest                on debt, net of amounts capitalized                                    |   |                                  | **38.6**    |   |   | 37.0    |   |   | 36.9 |   |
| Other                                                                                          |   |                                  | **5.7**     |   |   | 5.0     |   |   | .3 |   |
|                                                                                           |   |                                  | **44.3**    |   |   | 42.0    |   |   | 37.2 |   |
|                                                                                           |   |                                  |        |   |   |    |   |   |   |   |
| Net                income                                                                      |   | **$**                                 | **58.6**    |   | $      | 53.5    |   | $ | 62.1 |   |
|                                                                                           |   |                                  |        |   |   |    |   |   |   |   |
|                                                                                           |   |                                  |        |   |   |    |   |   |   |   |
| The                accompanying notes are an integral part of these                statements. |   |                                  |        |   |   |    |   |   |   |   |

----

Table          of Contents

| **Nicor                Gas Company**                                                           |   |                                  |       |   |   |   |   |
|------------------------------------------------------------------------------------------------|--------|---------------------------------------|------------|--------|--------|--------|--------|
|                                                                                           |   |                                  |       |   |   |   |   |
| **Consolidated                Statements of Cash                Flows**                        |   |                                  |       |   |   |   |   |
| **(millions)**                                                                                 |   |                                  |       |   |   |   |   |
|                                                                                           |   |                                  |       |   |   |   |   |
|                                                                                           |   | Year                ended December 31 |       |
|                                                                                           |   | **2006**                              |       | 2005   |   | 2004   |   |
| Operating                activities                                                            |   |                                  |       |   |   |   |   |   |   |   |
| Net                income                                                                      |   | **$**                                 | **58.6**   |   | $      | 53.5   |   | $ | 62.1 |   |
| Adjustments                to reconcile net income to net cash flow                            |   |                                  |       |   |   |   |   |   |   |   |
| provided                from operating activities:                                             |   |                                  |       |   |   |   |   |   |   |   |
| Depreciation                                                                              |   |                                  | **160.1**  |   |   | 154.5  |   |   | 148.8 |   |
| Deferred                income tax expense (benefit)                                      |   |                                  | **(48.6**  | **)**  |   | (79.3  | )      |   | 20.2 |   |
| Gain                on sale of property, plant and equipment                              |   |                                  | **(3.3**   | **)**  |   | (.4    | )      |   | (5.9 | ) |
| Changes                in assets and liabilities:                                         |   |                                  |       |   |   |   |   |   |   |   |
|    Receivables,                less allowances                                       |   |                                  | **278.2**  |   |   | (270.9 | )      |   | (104.4 | ) |
|    Gas                in storage                                                     |   |                                  | **68.0**   |   |   | (32.0  | )      |   | 18.1 |   |
|    Deferred/accrued                gas costs                                         |   |                                  | **(173.4** | **)**  |   | 155.1  |   |   | 21.2 |   |
|    Pension                benefits                                                   |   |                                  | **26.6**   |   |   | (6.1   | )      |   | (4.4 | ) |
|    Regulatory                postretirement asset                                    |   |                                  | **(113.5** | **)**  |   | -      |   |   | - |   |
|    Other                assets                                                       |   |                                  | **37.6**   |   |   | (1.1   | )      |   | 6.0 |   |
|    Accounts                payable                                                   |   |                                  | **(77.2**  | **)**  |   | 137.7  |   |   | 101.4 |   |
|    Health                care and other postretirement benefits                      |   |                                  | **89.1**   |   |   | 12.6   |   |   | 11.2 |   |
|    Other                liabilities                                                  |   |                                  | **36.4**   |   |   | (11.4  | )      |   | 5.2 |   |
| Other                items                                                                |   |                                  | **(4.1**   | **)**  |   | 5.2    |   |   | 4.8 |   |
| Net                cash flow provided from operating activities                                |   |                                  | **334.5**  |   |   | 117.4  |   |   | 284.3 |   |
|                                                                                           |   |                                  |       |   |   |   |   |   |   |   |
| Investing                activities                                                            |   |                                  |       |   |   |   |   |   |   |   |
| Additions                to property, plant and equipment                                      |   |                                  | **(164.3** | **)**  |   | (188.2 | )      |   | (178.2 | ) |
| Decrease                in deposits in Nicor cash management pool                              |   |                                  | **-**      |   |   | .1     |   |   | 97.4 |   |
| Net                proceeds from sale of property, plant and equipment                         |   |                                  | **3.6**    |   |   | .8     |   |   | 7.6 |   |
| Other                investing activities                                                      |   |                                  | **5.7**    |   |   | 3.1    |   |   | - |   |
| Net                cash flow used for investing activities                                     |   |                                  | **(155.0** | **)**  |   | (184.2 | )      |   | (73.2 | ) |
|                                                                                           |   |                                  |       |   |   |   |   |   |   |   |
| Financing                activities                                                            |   |                                  |       |   |   |   |   |   |   |   |
| Proceeds                from issuing long-term debt                                            |   |                                  | **50.0**   |   |   | -      |   |   | - |   |
| Disbursements                to retire long-term obligations                                   |   |                                  | **(50.5**  | **)**  |   | (.5    | )      |   | (.5 | ) |
| Commercial                paper repayments with maturities over 90 days                        |   |                                  | **-**      |   |   | -      |   |   | (540.0 | ) |
| Net                issuances (repayments) of commercial paper with                             |   |                                  |       |   |   |   |   |   |   |   |
|                   maturities of 90 days or less                                      |   |                                  | **(140.0** | **)**  |   | 115.0  |   |   | 340.0 |   |
| Dividends                paid                                                                  |   |                                  | **(47.1**  | **)**  |   | (37.1  | )      |   | (54.1 | ) |
| Other                financing activities                                                      |   |                                  | **(.4**    | **)**  |   | (.4    | )      |   | - |   |
| Net                cash flow provided from (used for) financing activities                     |   |                                  | **(188.0** | **)**  |   | 77.0   |   |   | (254.6 | ) |
|                                                                                           |   |                                  |       |   |   |   |   |   |   |   |
| Net                increase (decrease) in cash and cash equivalents                            |   |                                  | **(8.5**   | **)**  |   | 10.2   |   |   | (43.5 | ) |
|                                                                                           |   |                                  |       |   |   |   |   |   |   |   |
| Cash                and cash equivalents, beginning of year                                    |   |                                  | **10.2**   |   |   | -      |   |   | 43.5 |   |
|                                                                                           |   |                                  |       |   |   |   |   |   |   |   |
| Cash                and cash equivalents, end of year                                          |   | **$**                                 | **1.7**    |   | $      | 10.2   |   | $ | - |   |
|                                                                                           |   |                                  |       |   |   |   |   |   |   |   |
| Supplemental                information                                                        |   |                                  |       |   |   |   |   |   |   |   |
| Income                taxes paid, net                                                          |   | **$**                                 | **84.9**   |   | $      | 102.6  |   | $ | 14.1 |   |
| Interest                paid, net of amounts capitalized                                       |   |                                  | **36.1**   |   |   | 34.8   |   |   | 34.7 |   |
|                                                                                           |   |                                  |       |   |   |   |   |   |   |   |
|                                                                                           |   |                                  |       |   |   |   |   |   |   |   |
| The                accompanying notes are an integral part of these                statements. |   |                                  |       |   |   |   |   |   |   |   |

----

Table          of Contents

| **Nicor                Gas Company**                                                           |   |                       |        |   |   |
|------------------------------------------------------------------------------------------------|--------|----------------------------|-------------|--------|--------|
|                                                                                           |   |                       |        |   |   |
| **Consolidated                Balance                Sheets**                                  |   |                       |        |   |   |
| **(millions)**                                                                                 |   |                       |        |   |   |
|                                                                                           |   | December                31 |        |
|                                                                                           |   | **2006**                   |        | 2005   |   |
| **Assets**                                                                                     |   |                       |        |   |   |   |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Gas                distribution plant, at cost                                                 |   | **$**                      | **4,157.1** |   | $      | 4,043.2 |   |
| Less                accumulated depreciation                                              |   |                       | **1,576.4** |   |   | 1,513.1 |   |
| Gas                distribution plant, net                                                     |   |                       | **2,580.7** |   |   | 2,530.1 |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Current                assets                                                                  |   |                       |        |   |   |   |   |
| Cash                and cash equivalents                                                  |   |                       | **1.7**     |   |   | 10.2 |   |
| Receivables,                less allowances of $30.9 and $30.1, respectively              |   |                       | **457.1**   |   |   | 753.0 |   |
| Receivables                - affiliates                                                   |   |                       | **36.2**    |   |   | 18.5 |   |
| Gas                in storage, at last-in, first-out cost                                 |   |                       | **153.0**   |   |   | 221.0 |   |
| Deferred                income taxes                                                      |   |                       | **25.1**    |   |   | - |   |
| Other                                                                                     |   |                       | **26.6**    |   |   | 53.1 |   |
| Total                current assets                                                            |   |                       | **699.7**   |   |   | 1,055.8 |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Pension                benefits                                                                |   |                       | **161.0**   |   |   | 187.6 |   |
| Other                assets                                                                    |   |                       | **151.1**   |   |   | 46.8 |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Total                assets                                                                    |   | **$**                      | **3,592.5** |   | $      | 3,820.3 |   |
|                                                                                           |   |                       |        |   |   |   |   |
| **Capitalization                and Liabilities**                                              |   |                       |        |   |   |   |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Capitalization                                                                                 |   |                       |        |   |   |   |   |
| Long-term                obligations                                                      |   |                       |        |   |   |   |   |
|    Long-term                debt, net of unamortized discount                        |   | **$**                      | **497.5**   |   | $      | 445.8 |   |
|    Mandatorily                redeemable preferred stock                             |   |                       | **3.6**     |   |   | 4.1 |   |
| Total                long-term obligations                                                |   |                       | **501.1**   |   |   | 449.9 |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Preferred                stock                                                            |   |                       |        |   |   |   |   |
|    Non-redeemable                preferred stock                                     |   |                       | **1.4**     |   |   | 1.4 |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Common                equity                                                              |   |                       |        |   |   |   |   |
|    Common                stock                                                       |   |                       | **76.2**    |   |   | 76.2 |   |
|    Paid-in                capital                                                    |   |                       | **108.1**   |   |   | 108.1 |   |
|    Retained                earnings                                                  |   |                       | **480.3**   |   |   | 470.7 |   |
|    Accumulated                other comprehensive loss, net                          |   |                       | **(3.2**    | **)**  |   | (.3 | ) |
| Total                common equity                                                        |   |                       | **661.4**   |   |   | 654.7 |   |
| Total                capitalization                                                            |   |                       | **1,163.9** |   |   | 1,106.0 |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Current                liabilities                                                             |   |                       |        |   |   |   |   |
| Long-term                obligations due within one year                                  |   |                       | **.5**      |   |   | 50.5 |   |
| Short-term                debt                                                            |   |                       | **350.0**   |   |   | 490.0 |   |
| Accounts                payable                                                           |   |                       | **466.5**   |   |   | 543.7 |   |
| Accrued                gas costs                                                          |   |                       | **50.0**    |   |   | 223.3 |   |
| Deferred                income taxes                                                      |   |                       | **-**       |   |   | 24.4 |   |
| Derivative                instruments                                                     |   |                       | **51.1**    |   |   | 5.1 |   |
| Dividends                payable                                                          |   |                       | **13.0**    |   |   | 11.0 |   |
| Other                                                                                     |   |                       | **64.9**    |   |   | 53.3 |   |
| Total                current liabilities                                                       |   |                       | **996.0**   |   |   | 1,401.3 |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Deferred                credits and other liabilities                                          |   |                       |        |   |   |   |   |
| Regulatory                retirement cost liability                                       |   |                       | **676.7**   |   |   | 631.7 |   |
| Deferred                income taxes                                                      |   |                       | **281.7**   |   |   | 296.1 |   |
| Health                care and other postretirement benefits                              |   |                       | **181.6**   |   |   | 101.6 |   |
| Asset                retirement obligation                                                |   |                       | **169.0**   |   |   | 164.0 |   |
| Regulatory                income tax liability                                            |   |                       | **53.8**    |   |   | 41.3 |   |
| Unamortized                investment tax credits                                         |   |                       | **29.6**    |   |   | 31.7 |   |
| Other                                                                                     |   |                       | **40.2**    |   |   | 46.6 |   |
| Total                deferred credits and other liabilities                                    |   |                       | **1,432.6** |   |   | 1,313.0 |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Commitments                and contingencies                                                   |   |                       |        |   |   |   |   |
|                                                                                           |   |                       |        |   |   |   |   |
| Total                capitalization and liabilities                                            |   | **$**                      | **3,592.5** |   | $      | 3,820.3 |   |
|                                                                                           |   |                       |        |   |   |   |   |
| The                accompanying notes are an integral part of these                statements. |   |                       |        |   |   |   |   |

----

Table          of Contents

| **Nicor                Gas Company**                                                           |   |         |   |                       |      |    |   |         |     |
|------------------------------------------------------------------------------------------------|--------|--------------|--------|----------------------------|-----------|--------------|--------|--------------|----------|
|                                                                                           |   |    |   |                       |      |         |   |    |     |   |   |
| **Consolidated                Statements of                Capitalization**                    |   |    |   |                       |      |         |   |    |     |   |   |
| **(millions,                except share data)**                                               |   |         |   |                       |      |    |   |         |     |
|                                                                                           |   |    |   |                       |      |         |   |    |     |   |   |
|                                                                                           |   |    |   | December                31 |      |
|                                                                                           |   |    |   | **2006**                   |      |  2005   |   |
|                                                                                           |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
| First                Mortgage Bonds                                                            |   |         |   |                       |      |         |   |         |     |   |   |   |
| 5.55%                Series due 2006                                                           |   |         |   |                       | **$**     | **-**        |   |         |     |   | $ | 50.0 |   |   |   |   |
| 5.875%                Series due 2008                                                          |   |         |   |                       |      | **75.0**     |   |         |     |   |   | 75.0 |   |   |   |   |
| 5.37%                Series due 2009                                                           |   |         |   |                       |      | **50.0**     |   |         |     |   |   | 50.0 |   |   |   |   |
| 6.625%                Series due 2011                                                          |   |         |   |                       |      | **75.0**     |   |         |     |   |   | 75.0 |   |   |   |   |
| 7.20%                Series due 2016                                                           |   |         |   |                       |      | **50.0**     |   |         |     |   |   | 50.0 |   |   |   |   |
| 5.80%                Series due 2023                                                           |   |         |   |                       |      | **50.0**     |   |         |     |   |   | 50.0 |   |   |   |   |
| 6.58%                Series due 2028                                                           |   |         |   |                       |      | **50.0**     |   |         |     |   |   | 50.0 |   |   |   |   |
| 5.90%                Series due 2032                                                           |   |         |   |                       |      | **50.0**     |   |         |     |   |   | 50.0 |   |   |   |   |
| 5.90%                Series due 2033                                                           |   |         |   |                       |      | **50.0**     |   |         |     |   |   | 50.0 |   |   |   |   |
| 5.85%                Series due 2036                                                           |   |         |   |                       |      | **50.0**     |   |         |     |   |   | - |   |   |   |   |
|                                                                                           |   |         |   |                       |      | **500.0**    |   |         |     |   |   | 500.0 |   |   |   |   |
| Less:                 Amount due within one year                                          |   |         |   |                       |      | **-**        |   |         |     |   |   | 50.0 |   |   |   |   |
|                       Unamortized debt discount, net of premium  |   |         |   |                       |      | **2.5**      |   |         |     |   |   | 4.2 |   |   |   |   |
|                                                                                           |   |         |   |                       |      | **497.5**    |   |         | **42.8** | **%** |   | 445.8 |   |   | 40.3 | % |
|                                                                                           |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
| Preferred                stock, cumulative, $100 par value, 800,000                            |   |         |   |                       |      |         |   |         |     |   |   |   |
| shares                authorized                                                               |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
| Mandatorily                redeemable preferred stock, 4.48% and 5.00%                         |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
|  series,                41,000 shares outstanding in 2006                                 |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
|  and                46,000 shares outstanding in 2005                                     |   |         |   |                       |      | **4.1**      |   |         |     |   |   | 4.6 |   |   |   |   |
| Less:                Amount due within one year                                                |   |         |   |                       |      | **.5**       |   |         |     |   |   | .5 |   |   |   |   |
|                                                                                           |   |         |   |                       |      | **3.6**      |   |         | **.3**   |   |   | 4.1 |   |   | .4 |   |
|                                                                                           |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
| Nonredeemable                preferred stock, 4.60% and 5.00%                                  |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
|  convertible                series, 14,008 shares outstanding                             |   |         |   |                       |      | **1.4**      |   |         | **.1**   |   |   | 1.4 |   |   | .1 |   |
|                                                                                           |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
| Common                equity                                                                   |   |         |   |                       |      |         |   |         |     |   |   |   |
| Common                stock, $5 par value, 25,000,000 shares                                   |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
|                  authorized, 32,365 shares reserved for share-based                       |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
|                  awards and 15,232,414 shares outstanding                                 |   |         |   |                       |      | **76.2**     |   |         |     |   |   | 76.2 |   |   |   |   |
| Paid-in                capital                                                                 |   |         |   |                       |      | **108.1**    |   |         |     |   |   | 108.1 |   |   |   |   |
| Retained                earnings                                                               |   |         |   |                       |      | **480.3**    |   |         |     |   |   | 470.7 |   |   |   |   |
| Accumulated                other comprehensive loss, net                                       |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
| Cash                flow hedges                                                                |   |         |   |                       |      | **(.1**      | **)**  |         |     |   |   | - |   |   |   |   |
| Unrecognized                postretirement loss (includes $2.9                                 |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
|   SFAS                158 transition amount)                                         |   |         |   |                       |      | **(3.1**     | **)**  |         |     |   |   | - |   |   |   |   |
| Minimum                pension liability                                                       |   |         |   |                       |      | **-**        |   |         |     |   |   | (.3 | ) |   |   |   |
| Total                common equity                                                             |   |         |   |                       |      | **661.4**    |   |         | **56.8** |   |   | 654.7 |   |   | 59.2 |   |
|                                                                                           |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
| Total                capitalization                                                            | **$**  | **1,163.9**  |   |                       | **100.0** | **% **  | $      | 1,106.0      |     |   | 100.0 | % |
|                                                                                           |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
|                                                                                           |   |         |   |                       |      |         |   |         |     |   |   |   |   |   |   |   |
| The                accompanying notes are an integral part of these                statements. |   |         |   |                       |      |         |   |         |     |

----

Table          of Contents

| **Nicor                Gas Company**                                                           |   |                                        |      |   |   |   |   |
|------------------------------------------------------------------------------------------------|--------|---------------------------------------------|-----------|--------|--------|--------|--------|
|                                                                                           |   |                                        |      |   |   |   |   |
| **Consolidated                Statements of Retained                Earnings**                 |   |                                        |      |   |   |   |   |
| **(millions)**                                                                                 |   |                                        |      |   |   |   |   |
|                                                                                           |   |                                        |      |   |   |   |   |
|                                                                                           |   | Year                ended December 31       |      |
|                                                                                           |   | **2006**                                    |      | 2005   |   | 2004   |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
| Balance                at beginning of year                                                    |   | **$**                                       | **470.7** |   | $      | 455.3  |   | $ | 442.3 |   |
| Net                income                                                                      |   |                                        | **58.6**  |   |   | 53.5   |   |   | 62.1 |   |
| Dividends                declared on common stock                                              |   |                                        | **(48.9** | **)**  |   | (38.0  | )      |   | (49.0 | ) |
| Dividends                declared on preferred stock                                           |   |                                        | **(.1**   | **)**  |   | (.1    | )      |   | (.1 | ) |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
| Balance                at end of year                                                          |   | **$**                                       | **480.3** |   | $      | 470.7  |   | $ | 455.3 |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
| **Consolidated                Statements of Comprehensive                Income**              |   |                                        |      |   |   |   |   |   |   |   |
| **(millions)**                                                                                 |   |                                        |      |   |   |   |   |   |   |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
|                                                                                           |   | Year                ended December 31  |
|                                                                                           |   |                                        | **2006**  |   |   | 2005   |   |   | 2004 |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
| Net                income                                                                      |   | **$**                                       | **58.6**  |   | $      | 53.5   |   | $ | 62.1 |   |
| Other                comprehensive income (loss), before tax                                   |   |                                        |      |   |   |   |   |   |   |   |
| Loss                on cash flow hedges                                                        |   |                                        | **(.1**   | **)**  |   | -      |   |   | - |   |
| Decrease                to minimum pension liability                                           |   |                                        | **-**     |   |   | 2.2    |   |   | - |   |
|                                                                                           |   |                                        | **(.1**   | **)**  |   | 2.2    |   |   | - |   |
| Related                income tax expense                                                 |   |                                        | **-**     |   |   | (.9    | )      |   | - |   |
| Other                comprehensive income (loss), net of tax                                   |   |                                        | **(.1**   | **)**  |   | 1.3    |   |   | - |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
| Comprehensive                income                                                            |   | **$**                                       | **58.5**  |   | $      | 54.8   |   | $ | 62.1 |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
|                                                                                           |   |                                        |      |   |   |   |   |   |   |   |
| The                accompanying notes are an integral part of these                statements. |   |                                        |      |   |   |   |   |   |   |   |

----

Table          of Contents

**Notes      to the Consolidated Financial      Statements**

**1.       **
**ACCOUNTING      POLICIES**

**General.      **

**Consolidation.**

**Income      statement presentation.**

**Use      of estimates.**

**Reclassifications.**

**Cash      and cash equivalents.**

**Regulatory      assets and liabilities.**
*Accounting      for the Effects of Certain Types of Regulation*

----

Table            of Contents

|                                                             |   | **2006** |      | 2005   |   |
|------------------------------------------------------------------|--------|----------|-----------|--------|--------|
| **Regulatory                assets**                             |   |     |      |   |   |   |   |
| Regulatory                postretirement asset - current         |   | **$**    | **8.8**   |   | $      | - |   |
| Regulatory                postretirement asset - noncurrent      |   |     | **104.7** |   |   | - |   |
| Deferred                environmental costs                      |   |     | **16.0**  |   |   | 15.1 |   |
| Unamortized                losses on reacquired debt             |   |     | **17.6**  |   |   | 18.7 |   |
| Deferred                rate case costs                          |   |     | **3.0**   |   |   | 3.5 |   |
| Other                                                            |   |     | **1.0**   |   |   | .3 |   |
|                                                             |   | **$**    | **151.1** |   | $      | 37.6 |   |
|                                                             |   |     |      |   |   |   |   |
| **Regulatory                liabilities**                        |   |     |      |   |   |   |   |
| Regulatory                retirement cost liability - current    |   | **$**    | **8.0**   |   | $      | 9.0 |   |
| Regulatory                retirement cost liability - noncurrent |   |     | **676.7** |   |   | 631.7 |   |
| Accrued                gas costs                                 |   |     | **50.0**  |   |   | 223.3 |   |
| Regulatory                income tax liability                   |   |     | **53.8**  |   |   | 41.3 |   |
| Other                                                            |   |     | **-**     |   |   | 1.8 |   |
|                                                             |   | **$**    | **788.5** |   | $      | 907.1 |   |

**Asset      retirement obligations.**

**Derivative      instruments.**

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Table            of Contents

**Credit      risk.**

**Operating      revenues and gas costs.**

**Legal      defense costs.**

**Depreciation.      **

**Revenue      taxes.**

**Income      taxes. **

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Table            of Contents

**2.       **
**NEW      ACCOUNTING PRONOUNCEMENTS**

**Share-based      payment**
*Share-Based      Payment *
*Accounting      for Stock-Based Compensation*

*Accounting      for Stock Issued to Employees *

**Defined      benefit pension and other postretirement plans.**
*Employers’*
*Accounting      for Defined Benefit Pension and Other Postretirement Plans*

|                                                         |   | Before                application |   | Adjustments |   | After                application |   |
|--------------------------------------------------------------|--------|-----------------------------------|--------|-------------|--------|----------------------------------|--------|
|                                                         |   |                              |   |        |   |                             |   |   |   |   |
| Current                deferred income taxes                 |   | $                                 | 22.2   |        | $      | 2.9                              |   | $ | 25.1 |   |
| Current                other assets (1)                      |   |                              | 17.8   |        |   | 8.8                              |   |   | 26.6 |   |
| Pension                benefits                              |   |                              | 197.4  |        |   | (36.4                            | )      |   | 161.0 |   |
| Noncurrent                other assets (1)                   |   |                              | 46.7   |        |   | 104.4                            |   |   | 151.1 |   |
| Current                other liabilities                     |   |                              | (55.8  | )           |   | (9.1                             | )      |   | (64.9 | ) |
| Noncurrent                deferred income taxes              |   |                              | (297.0 | )           |   | 15.3                             |   |   | (281.7 | ) |
| Health                care and other postretirement benefits |   |                              | (108.3 | )           |   | (73.3                            | )      |   | (181.6 | ) |
| Regulatory                income tax liability               |   |                              | (38.3  | )           |   | (15.5                            | )      |   | (53.8 | ) |
| Accumulated                other comprehensive loss, net     |   |                              | 0.3    |        |   | 2.9                              |   |   | 3.2 |   |

|  (1)   | “Adjustments”                  to these line items primarily represent the establishment of a                  regulatory                  asset. |
|-----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table            of Contents

**Uncertain      tax positions. **
*Accounting      for Uncertainty in Income Taxes*

**Fair      value measurements. **
*Fair      Value Measurements*

**3.       **
**ASSET      RETIREMENT OBLIGATIONS **

*Accounting      for Conditional Asset Retirement Obligations *
*,      *

| Beginning                of period                    |   | **$**  | **164.4** |   |
|-------------------------------------------------------|--------|--------|-----------|--------|
| Liabilities                incurred during the period |   |   | **2.2**   |   |
| Liabilities                settled during the period  |   |   | **(3.2**  | **)**  |
| Accretion                                             |   |   | **9.5**   |   |
| Revision                in estimated cash flows       |   |   | **(2.7**  | **)**  |
| End                of period                          |   | **$**  | **170.2** |   |

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Table            of Contents

**4.       **
**GAS      IN STORAGE **

**5.       **
**SHORT-TERM      AND LONG-TERM DEBT**

**6.       **
**ACCRUED      UNBILLED REVENUES**

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Table            of Contents

**7.       **
**FAIR      VALUE OF FINANCIAL INSTRUMENTS**

|                                        |   | **2006** |     | 2005   |   |
|---------------------------------------------|--------|----------|----------|--------|--------|
|                                        |   |     |     |   |   |   |   |
| Current                other assets         |   | **$**    | **.3**   |   | $      | 25.7 |   |
| Noncurrent                other assets      |   |     | **.1**   |   |   | 1.0 |   |
|                                        |   | **$**    | **.4**   |   | $      | 26.7 |   |
|                                        |   |     |     |   |   |   |   |
| Derivative                instruments       |   | **$**    | **48.0** |   | $      | .8 |   |
| Noncurrent                other liabilities |   |     | **.7**   |   |   | .1 |   |
|                                        |   | **$**    | **48.7** |   | $      | .9 |   |

**8.       **
**INCOME      AND OTHER TAXES**

|                                                       |   | **2006** |      | 2005   |   | 2004   |   |
|------------------------------------------------------------|--------|----------|-----------|--------|--------|--------|--------|
|                                                       |   |     |      |   |   |   |   |   |   |   |
| Current                                                    |   |     |      |   |   |   |   |   |   |   |
| Federal                                                    |   | **$**    | **62.0**  |   | $      | 87.1   |   | $ | 11.7 |   |
| State                                                      |   |     | **16.5**  |   |   | 20.4   |   |   | 3.0 |   |
|                                                       |   |     | **78.5**  |   |   | 107.5  |   |   | 14.7 |   |
| Deferred                                                   |   |     |      |   |   |   |   |   |   |   |
| Federal                                                    |   |     | **(37.6** | **)**  |   | (64.0  | )      |   | 16.4 |   |
| State                                                      |   |     | **(11.0** | **)**  |   | (15.3  | )      |   | 3.8 |   |
|                                                       |   |     | **(48.6** | **)**  |   | (79.3  | )      |   | 20.2 |   |
|                                                       |   |     |      |   |   |   |   |   |   |   |
| Amortization                of investment tax credits, net |   |     | **(2.1**  | **)**  |   | (2.1   | )      |   | (1.8 | ) |
| Income                tax expense, net                     |   | **$**    | **27.8**  |   | $      | 26.1   |   | $ | 33.1 |   |

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|                                              |   | **2006** |      | 2005   |   |
|---------------------------------------------------|--------|----------|-----------|--------|--------|
|                                              |   |     |      |   |   |   |   |
| Deferred                tax liabilities           |   |     |      |   |   |   |   |
| Property,                plant and equipment      |   | **$**    | **287.6** |   | $      | 350.3 |   |
| Employee                benefits                  |   |     | **14.8**  |   |   | 24.6 |   |
| Other                                             |   |     | **19.4**  |   |   | 21.1 |   |
|                                              |   |     | **321.8** |   |   | 396.0 |   |
| Deferred                tax assets                |   |     |      |   |   |   |   |
| Unamortized                investment tax credits |   |     | **19.5**  |   |   | 20.9 |   |
| Alternative                minimum tax credits    |   |     | **-**     |   |   | 14.4 |   |
| Other                                             |   |     | **45.7**  |   |   | 40.2 |   |
|                                              |   |     | **65.2**  |   |   | 75.5 |   |
| Net                deferred tax liability         |   | **$**    | **256.6** |   | $      | 320.5 |   |

|                                                                |   | **2006** |     | 2005   |   | 2004   |   |
|---------------------------------------------------------------------|--------|----------|----------|--------|--------|--------|--------|
|                                                                |   |     |     |   |   |   |   |   |   |   |
| Federal                statutory rate                               |   |     | **35.0** | **%**  |   | 35.0   | %      |   | 35.0 | % |
| State                income taxes, net                              |   |     | **4.4**  |   |   | 4.6    |   |   | 5.2 |   |
| Amortization                of investment tax credits               |   |     | **(2.6** | **)**  |   | (3.0   | )      |   | (2.4 | ) |
| Amortization                of regulatory income tax liability      |   |     | **(1.7** | **)**  |   | (2.3   | )      |   | (2.0 | ) |
| Medicare                subsidy                                     |   |     | **(2.1** | **)**  |   | (1.1   | )      |   | - |   |
| Other,                net                                           |   |     | **(.8**  | **)**  |   | (.4    | )      |   | (1.0 | ) |
| Effective                combined federal and state income tax rate |   |     | **32.2** | **%**  |   | 32.8   | %      |   | 34.8 | % |

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**9.       **
**POSTRETIREMENT      BENEFITS**

|                                                     |   | Pension                benefits |      | Health                care andother                benefits |   |
|----------------------------------------------------------|--------|---------------------------------|-----------|-------------------------------------------------------------|--------|
|                                                     |   | **2006**                        |      | 2005                                                        |   | **2006** |   | 2005 |   |
|                                                     |   |                            |      |                                                        |   |   |   |   |   |   |   |   |   |
| **Change                in benefit obligation**          |   |                            |      |                                                        |   |   |   |   |   |   |   |   |   |
| Benefit                obligation at beginning of period |   | **$**                           | **284.4** |                                                        | $      | 282.6 |   | **$** | **192.5** |   | $ | 184.7 |   |
| Service                cost                              |   |                            | **9.4**   |                                                        |   | 9.3 |   |   | **2.4** |   |   | 2.7 |   |
| Interest                cost                             |   |                            | **14.9**  |                                                        |   | 15.6 |   |   | **10.3** |   |   | 10.3 |   |
| Actuarial                (gain) loss                     |   |                            | **(9.7**  | **)**                                                       |   | 7.1 |   |   | **.4** |   |   | 4.9 |   |
| Participant                contributions                 |   |                            | **-**     |                                                        |   | - |   |   | **.7** |   |   | .8 |   |
| Benefits                paid                             |   |                            | **(27.7** | **)**                                                       |   | (30.2 | ) |   | **(12.6** | **)** |   | (10.9 | ) |
| Benefit                obligation at end of period       |   |                            | **271.3** |                                                        |   | 284.4 |   |   | **193.7** |   |   | 192.5 |   |

| **Change                in plan assets**                        |   |   |      |   |   |   |   |   |       |   |   |   |   |
|-----------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|------------|--------|--------|--------|--------|
| Fair                value of plan assets at beginning of period |   |   | **424.0** |   |   | 402.0  |   |   | **6.9**    |   |   | 10.6   |   |
| Actual                return on plan assets                     |   |   | **36.0**  |   |   | 52.2   |   |   | **.2**     |   |   | 1.0    |   |
| Employer                contributions                           |   |   | **-**     |   |   | -      |   |   | **6.0**    |   |   | 5.4    |   |
| Participant                contributions                        |   |   | **-**     |   |   | -      |   |   | **.7**     |   |   | .8     |   |
| Benefits                paid                                    |   |   | **(27.7** | **)**  |   | (30.2  | )      |   | **(12.6**  | **)**  |   | (10.9  | )      |
| Fair                value of plan assets at end of period       |   |   | **432.3** |   |   | 424.0  |   |   | **1.2**    |   |   | 6.9    |   |
|                                                            |   |   |      |   |   |   |   |   |       |   |   |   |   |
| Funded                status                                    |   |   | **161.0** |   |   | 139.6  |   |   | **(192.5** | **)**  |   | (185.6 | )      |
| Unrecognized                net actuarial loss                  |   |   | **-**     |   |   | 44.9   |   |   | **-**      |   |   | 88.5   |   |
| Unrecognized                prior service costs                 |   |   | **-**     |   |   | 3.1    |   |   | **-**      |   |   | (.7    | )      |
| Other                                                           |   |   | **-**     |   |   | -      |   |   | **1.8**    |   |   | (3.8   | )      |
| Postretirement                benefit asset (liability)         |   | **$**  | **161.0** |   | $      | 187.6  |   | **$**  | **(190.7** | **)**  | $      | (101.6 | )      |

|                                  |   | Pension                benefits |      | Health                care andother                benefits |   |
|---------------------------------------|--------|---------------------------------|-----------|-------------------------------------------------------------|--------|
|                                  |   | **2006**                        |      | 2005                                                        |   | **2006** |   | 2005 |   |
|                                  |   |                            |      |                                                        |   |   |   |   |   |   |   |   |   |
| Noncurrent                assets      |   | **$**                           | **161.0** |                                                        | $      | 187.6 |   | **$** | **-** |   | $ | - |   |
| Current                liabilities    |   |                            | **-**     |                                                        |   | - |   |   | **(9.1** | **)** |   | - |   |
| Noncurrent                liabilities |   |                            | **-**     |                                                        |   | - |   |   | **(181.6** | **)** |   | (101.6 | ) |
|                                  |   | **$**                           | **161.0** |                                                        | $      | 187.6 |   | **$** | **(190.7** | **)** | $ | (101.6 | ) |

----

Table            of Contents

|                              |   | Pension                benefits |    | Health                care andother                benefits |   |
|-----------------------------------|--------|---------------------------------|---------|-------------------------------------------------------------|--------|
|                              |   |                            |    |                                                        |   |   |   |
| Net                loss           |   | **$**                           | **1.7** |                                                        | **$**  | **4.2** |   |
| Prior                service cost |   |                            | **.1**  |                                                        |   | **-** |   |
|                              |   | **$**                           | **1.8** |                                                        | **$**  | **4.2** |   |

|                                                              |   | Pension                benefits |      | Health                care and other                benefits |   |
|-------------------------------------------------------------------|--------|---------------------------------|-----------|--------------------------------------------------------------|--------|
|                                                              |   | **2006**                        |      | 2005                                                         |   | 2004 |   | **2006** |   | 2005 |   | 2004 |   |
|                                                              |   |                            |      |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service                cost                                       |   | **$**                           | **9.4**   |                                                         | $      | 9.3 |   | $ | 9.0 |   | **$** | **2.4** |   | $ | 2.7 |   | $ | 2.4 |   |
| Interest                cost                                      |   |                            | **14.9**  |                                                         |   | 15.6 |   |   | 15.7 |   |   | **10.3** |   |   | 10.3 |   |   | 10.1 |   |
| Expected                return on plan assets                     |   |                            | **(34.8** | **)**                                                        |   | (33.2 | ) |   | (31.7 | ) |   | **(.2** | **)** |   | (.9 | ) |   | (1.0 | ) |
| Recognized                net actuarial loss                      |   |                            | **.2**    |                                                         |   | 1.6 |   |   | 2.0 |   |   | **5.0** |   |   | 4.9 |   |   | 4.6 |   |
| Amortization                of unrecognized transition obligation |   |                            | **-**     |                                                         |   | - |   |   | - |   |   | **-** |   |   | - |   |   | .1 |   |
| Amortization                of prior service cost                 |   |                            | **.5**    |                                                         |   | .6 |   |   | .6 |   |   | **(.1** | **)** |   | (.1 | ) |   | - |   |
| Net                periodic benefit cost (credit)                 |   | **$**                           | **(9.8**  | **)**                                                        | $      | (6.1 | ) | $ | (4.4 | ) | **$** | **17.4** |   | $ | 16.9 |   | $ | 16.2 |   |

|                                         |   |  Pension                benefits |     | Health                care andother                benefits |   |
|----------------------------------------------|--------|---------------------------------------|----------|-------------------------------------------------------------|--------|
|                                         |   | **2006**                              |     | 2005                                                        |   | **2006** |   | 2005 |   |
|                                         |   |                                  |     |                                                        |   |   |   |   |   |   |   |   |   |
| Discount                rate                 |   |                                  | **5.75** | **%**                                                       |   | 5.50 | % |   | **5.75** | **%** |   | 5.50 | % |
| Rate                of compensation increase |   |                                  | **3.75** |                                                        |   | 3.75 |   |   | **3.75** |   |   | 3.75 |   |

----

Table            of Contents

|                                         |   | Pension                benefits |     | Health                care and other benefits |   |
|----------------------------------------------|--------|---------------------------------|----------|-----------------------------------------------|--------|
|                                         |   | **2006**                        |     | 2005                                          |   | 2004 |   | **2006** |   | 2005 |   | 2004 |   |
|                                         |   |                            |     |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount                rate                 |   |                            | **5.50** | **%**                                         |   | 5.75 | % |   | 6.00 | % |   | **5.50** | **%** |   | 5.75 | % |   | 6.00 | % |
| Expected                return on assets     |   |                            | **8.50** |                                          |   | 8.50 |   |   | 8.50 |   |   | **8.50** |   |   | 8.50 |   |   | 8.50 |   |
| Rate                of compensation increase |   |                            | **3.75** |                                          |   | 4.00 |   |   | 4.00 |   |   | **3.75** |   |   | 4.00 |   |   | 4.00 |   |

|                                                                                                      |   | **2006** |    | 2005   |   |
|-----------------------------------------------------------------------------------------------------------|--------|----------|---------|--------|--------|
|                                                                                                      |   |     |    |   |   |   |   |
| Health                care cost trend rate                                                                |   |     | **9.5** | **%**  |   | 9.5 | % |
| Rate                to which the cost trend rate is assumed to decline (the ultimate                rate) |   |     | **5.0** | **%**  |   | 5.0 | % |
| Years                to reach ultimate rate                                                               |   |     | **5**   |   |   | 5 |   |

|                                                                                                      |   | **2006** |    | 2005   |   | 2004   |   |
|-----------------------------------------------------------------------------------------------------------|--------|----------|---------|--------|--------|--------|--------|
|                                                                                                      |   |     |    |   |   |   |   |   |   |   |
| Health                care cost trend rate                                                                |   |     | **9.5** | **%**  |   | 9.5    | %      |   | 9.5 | % |
| Rate                to which the cost trend rate is assumed to decline (the ultimate                rate) |   |     | **5.0** | **%**  |   | 5.0    | %      |   | 5.0 | % |
| Years                to reach ultimate rate                                                               |   |     | **5**   |   |   | 4      |   |   | 4 |   |

|                                                                   |   | One-percent |   |
|------------------------------------------------------------------------|--------|-------------|--------|
|                                                                   |   | Increase    |   | Decrease |   |
|                                                                   |   |        |   |   |   |   |   |
| Effect                on total of service and interest cost components |   | $           | 1.1    |   | $ | (.9 | ) |
| Effect                on benefit obligation                            |   |        | 18.3   |   |   | (15.6 | ) |

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Table            of Contents

|                             |   | Target     |   | Percentage                of plan assetsat                October 1 |   |
|----------------------------------|--------|------------|--------|---------------------------------------------------------------------|--------|
| Asset                category    |   | allocation |   | **2006**                                                            |   | 2005 |   |
|                             |   |       |   |                                                                |   |   |   |   |   |   |
| Equity                securities |   |       | 69     | %                                                                   |   | **69** | **%** |   | 69 | % |
| Debt                securities   |   |       | 31     |                                                                |   | **31** |   |   | 31 |   |
|                             |   |       | 100    | %                                                                   |   | **100** | **%** |   | 100 | % |

|  Twelve                months ending October 1 |   |  Pension                benefits |   | Health                care and other benefits |   | Expected                Medicare subsidy |   |
|-----------------------------------------------------|--------|---------------------------------------|--------|-----------------------------------------------|--------|------------------------------------------|--------|
|                                                |   |                                  |   |                                          |   |                                     |   |   |   |   |
| 2007                                                |   | $                                     | 18.6   |                                          | $      | 11.6                                     |   | $ | (1.3 | ) |
| 2008                                                |   |                                  | 17.4   |                                          |   | 12.2                                     |   |   | (1.4 | ) |
| 2009                                                |   |                                  | 19.0   |                                          |   | 13.0                                     |   |   | (1.5 | ) |
| 2010                                                |   |                                  | 19.8   |                                          |   | 13.7                                     |   |   | (1.6 | ) |
| 2011                                                |   |                                  | 21.4   |                                          |   | 14.3                                     |   |   | (1.7 | ) |
| 2012-2016                                           |   |                                  | 136.4  |                                          |   | 77.8                                     |   |   | (9.2 | ) |

**10.       **
**DIVIDEND      AND OTHER RESTRICTIONS**

**11.       **
**BUSINESS      SEGMENT INFORMATION**

|                         |   | **2006** |        | 2005   |   | 2004    |   |
|------------------------------|--------|----------|-------------|--------|--------|---------|--------|
|                         |   |     |        |   |   |    |   |   |   |   |
| Bundled                sales |   | **$**    | **2,087.8** |   | $      | 2,546.7 |   | $ | 2,024.7 |   |
| Transportation               |   |     | **158.8**   |   |   | 151.9   |   |   | 147.4 |   |
| Revenue                taxes |   |     | **147.7**   |   |   | 156.4   |   |   | 143.5 |   |
| Other                        |   |     | **58.0**    |   |   | 54.6    |   |   | 48.3 |   |
|                         |   | **$**    | **2,452.3** |   | $      | 2,909.6 |   | $ | 2,363.9 |   |

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Table            of Contents

**12.       **
**RELATED      PARTY TRANSACTIONS**

----

Table            of Contents

**13.**
**COMMITMENTS**

|                      |   | Purchase                obligations |   | Operating                leases |   | Other                long-term obligations |   |
|---------------------------|--------|-------------------------------------|--------|---------------------------------|--------|--------------------------------------------|--------|
|                      |   |                                |   |                            |   |                                       |   |   |   |   |
| 2007                      |   | $                                   | 11.3   |                            | $      | 1.1                                        |   | $ | .5 |   |
| 2008                      |   |                                | 10.4   |                            |   | 1.1                                        |   |   | .5 |   |
| 2009                      |   |                                | 10.4   |                            |   | .9                                         |   |   | .5 |   |
| 2010                      |   |                                | 10.4   |                            |   | .8                                         |   |   | .5 |   |
| 2011                      |   |                                | 10.4   |                            |   | .9                                         |   |   | .2 |   |
| After                2011 |   |                                | 3.7    |                            |   | 9.2                                        |   |   | 1.6 |   |
|                      |   | $                                   | 56.6   |                            | $      | 14.0                                       |   | $ | 3.8 |   |

** **

**14.       **
**RATE      PROCEEDING **

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Table            of Contents

**15.       **
**GUARANTEES      AND INDEMNITIES**

**16.       **
**CONTINGENCIES      **

**PBR      Plan. **

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Table            of Contents

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Table            of Contents

**SEC      and U.S. Attorney Inquiries.**

**Mercury**

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Table            of Contents

**Manufactured      Gas Plant Sites.**

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Table            of Contents

**Other.      **

**17.       **
**QUARTERLY      RESULTS (UNAUDITED)**

|                              |   | Quarter                ended |        |
|-----------------------------------|--------|------------------------------|-------------|
|                              |   | Mar.                31       |        | June                30 |   | Sept.                30 |   | Dec.                31 |   |
| 2006                              |   |                         |        |   |   |   |   |   |   |   |   |   |   |
| Operating                revenues |   | **$**                        | **1,210.8** |   | **$** | **338.1** |   | **$** | **226.7** |   | **$** | **676.7** |   |
| Operating                income   |   |                         | **42.7**    |   |   | **13.3** |   |   | **7.2** |   |   | **35.0** |   |
| Net                income (loss)  |   |                         | **30.2**    |   |   | **8.2** |   |   | **(1.6** | **)** |   | **21.8** |   |
|                              |   |                         |        |   |   |   |   |   |   |   |   |   |   |
| 2005                              |   |                         |        |   |   |   |   |   |   |   |   |   |   |
| Operating                revenues |   | $                            | 1,078.8     |   | $ | 372.2 |   | $ | 241.5 |   | $ | 1,217.0 |   |
| Operating                income   |   |                         | 43.2        |   |   | 11.5 |   |   | 3.8 |   |   | 34.5 |   |
| Net                income (loss)  |   |                         | 32.5        |   |   | 3.6 |   |   | (5.4 | ) |   | 22.8 |   |
|                              |   |                         |        |   |   |   |   |   |   |   |   |   |   |

**Item      9.    ****Changes      in and Disagreements with Accountants on Accounting and Financial      Disclosure**

**Item      9A.    ****Controls      and Procedures**

**Evaluation      of Disclosure Controls and Procedures**

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Table            of Contents

**Management’s      Report on Internal Control Over Financial Reporting**

| 1.   | Pertain                to the maintenance of records that in reasonable detail accurately                and                fairly reflect the transactions and dispositions of the assets of                the                company; |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Provide                reasonable assurance that transactions are recorded as necessary                to permit                preparation of financial statements in accordance with generally                accepted                accounting principles, and that receipts and expenditures of the                company                are being made only in accordance with authorizations of management                and                directors of the company; and |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Provide                reasonable assurance regarding prevention or timely detection of                unauthorized acquisition, use or disposition of the company’s assets that                could have a material effect on the financial                statements. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      9B.    ****Other      Information**

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Table            of Contents

**PART      III**

**Item      14.    ****Principal      Accountant Fees and Services**

| Fee                Category       |   | **2006** |    | 2005   |   |
|-----------------------------------|--------|----------|---------|--------|--------|
|                              |   |     |    |   |   |   |   |
| Audit                fees         |   | **$**    | **1.5** |   | $      | 1.5 |   |
| Audit-related                fees |   |     | **.1**  |   |   | .1 |   |
| Total                fees         |   | **$**    | **1.6** |   | $      | 1.6 |   |

*Audit      Fees.*

*Audit-Related      Fees.*

**Audit      Committee Pre-Approval Policies and Procedures**

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Table            of Contents

**PART      IV**

**Item      15.**     **Exhibits      and Financial Statement Schedules**

|  Schedule |                                                                                  |   |
|----------------|---------------------------------------------------------------------------------------|--------|
| Number         |                                                                                  | Page   |
|           | Report                of Independent Registered Public Accounting                Firm | 23     |
| II             | Valuation                and Qualifying Accounts                                      | 52     |

|   |   | Schedules                other than those listed are omitted because they are not                applicable. |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

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Table            of Contents

| **Nicor                Gas Company**                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |
|---------------------------------------------------------------------------------------------------|--------|---------------------------|----------|---------------------------|--------|---------------------------|--------|------------|----------|--------------------------|--------|
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |
| **Schedule                II**                                                                    |   |                      |     |                      |   |                      |   |       |     |                     |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |
| VALUATION                AND QUALIFYING ACCOUNTS                                                  |   |                      |     |                      |   |                      |   |
| (millions)                                                                                        |   |                      |     |                      |   |                      |   |       |     |                     |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |
|                                                                                              |   |                      |     | Additions                 |   |                      |   |       |     |
|                                                                                              |   | Balance                at |     | Charged                to |   | Charged                to |   |       |     | Balance                  |   |
|                                                                                              |   | beginning                 |     | costs                and  |   | other                     |   |       |     | at                end    |   |
| Description                                                                                       |   | of                period  |     | expenses                  |   | accounts                  |   | Deductions |     | of                period |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| 2006                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| Allowance                for doubtful                                                             |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
|                  accounts receivable                                                         |   | **$**                     | **30.1** |                      | **$**  | **38.1**                  |   | **$**      | **-**    |                     | **$**  | **37.3** |  **(a)** | **$** | **30.9** |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| Accrued                mercury-related costs                                                      |   |                      | **17.5** |                      |   | **-**                     |   |       | **-**    |                     |   | **4.3** |  **(b)  ** |   | **13.2** |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| Accrued                manufactured gas plant                                                     |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
|                  environmental costs                                                         |   |                      | **19.5** |                      |   | **-**                     |   |       | **12.7** |  **(c) **      |   | **12.3** |  **(b)** |   | **19.9** |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| 2005                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| Allowance                for doubtful                                                             |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
|                  accounts receivable                                                         |   | $                         | 19.7     |                      | $      | 42.6                      |   | $          | -        |                     | $      | 32.2 |  (a) | $ | 30.1 |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| Accrued                mercury-related costs                                                      |   |                      | 20.2     |                      |   | -                         |   |       | -        |                     |   | 2.7 |  (b) |   | 17.5 |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| Accrued                manufactured gas plant                                                     |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
|                  environmental costs                                                         |   |                      | 36.8     |                      |   | -                         |   |       | 0.6      |  (c)                |   | 17.9 |  (b) |   | 19.5 |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| 2004                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| Allowance                for doubtful                                                             |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
|                  accounts receivable                                                         |   | $                         | 19.4     |                      | $      | 32.5                      |   | $          | -        |                     | $      | 32.2 |  (a) | $ | 19.7 |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| Accrued                mercury-related costs                                                      |   |                      | 21.9     |                      |   | -                         |   |       | -        |                     |   | 1.7 |  (b) |   | 20.2 |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| Accrued                manufactured gas plant                                                     |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
|                  environmental costs                                                         |   |                      | 33.2     |                      |   | -                         |   |       | 18.8     |  (c)                |   | 15.2 |  (b) |   | 36.8 |   |
|                                                                                              |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |
| (a)                Accounts receivable written off, net of recoveries.                            |   |                      |     |                      |   |                      |   |       |     |
| (b)                Expenditures, other adjustments.                                               |   |                      |     |                      |   |                      |   |       |     |                     |   |   |
| (c)                Accrual of estimated future remediation costs that are                deferred |   |                      |     |                      |   |                      |   |       |     |
|                        as regulatory assets.                   |   |                      |     |                      |   |                      |   |       |     |                     |   |   |   |   |   |   |

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Table          of Contents

**Signatures**

|                                                                                                                                                                                                                                                                                         |   | Nicor                Gas Company                                                                                                         |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| Date                February                23, 2007                                                                                                                                                                                                                                         |   |                    /s/ KAREN K.                PEPPING                       |
|                                                                                                                                                                                                                                                                                         |   | Karen                K. Pepping                                                                                                          |
|                                                                                                                                                                                                                                                                                         |   | Vice                President and Controller                                                                                             |
|                                                                                                                                                                                                                                                                                         |   | (Principal                Accounting Officer and                                                                                         |
|                                                                                                                                                                                                                                                                                         |   | Duly                Authorized Officer)                                                                                                  |
|                                                                                                                                                                                                                                                                                         |
| Pursuant                to the requirements of the Securities Exchange Act of 1934, this                report                has been signed below by                the following persons on behalf of the registrant and in the capacities                indicated on February 23, 2007. |
|                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| Signature                                                                                                                                                                                                                                                                                    |   | Title                                                                                                                                    |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
|                           /s/ RUSS M. STROBEL                                                                                                                                                 |   |                                                                                                                                     |
| Russ                M. Strobel                                                                                                                                                                                                                                                               |   | Chairman,                President and                                                                                                   |
| *(Principal                Executive Officer)*                                                                                                                                                                                                                                               |   | Chief                Executive Officer                                                                                                   |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
|                          /s/ RICHARD L. HAWLEY                                                                                                                                                                    |   |                                                                                                                                     |
| Richard                L. Hawley                                                                                                                                                                                                                                                             |   | Executive                Vice President and                                                                                              |
| *(Principal                Financial Officer)*                                                                                                                                                                                                                                               |   | Chief                Financial Officer                                                                                                   |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
|                         /s/ KAREN K. PEPPING                                                                                                                                   |   |                                                                                                                                     |
| Karen                K. Pepping                                                                                                                                                                                                                                                              |   | Vice                President and Controller                                                                                             |
| *(Principal                Accounting Officer)*                                                                                                                                                                                                                                              |   |                                                                                                                                     |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| ROBERT                M. BEAVERS, JR.*                                                                                                                                                                                                                                                       |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| BRUCE                P. BICKNER*                                                                                                                                                                                                                                                             |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| JOHN                H. BIRDSALL, III*                                                                                                                                                                                                                                                        |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| THOMAS                A. DONAHOE*                                                                                                                                                                                                                                                            |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| RAYMOND                A. JEAN*                                                                                                                                                                                                                                                              |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| BRENDA                J. GAINES*                                                                                                                                                                                                                                                             |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| DENNIS                J. KELLER*                                                                                                                                                                                                                                                             |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| R.                EDEN MARTIN*                                                                                                                                                                                                                                                               |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| GEORGIA                R. NELSON*                                                                                                                                                                                                                                                            |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| JOHN                RAU*                                                                                                                                                                                                                                                                     |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
| JOHN                F. RIORDAN*                                                                                                                                                                                                                                                              |   | Director                                                                                                                                 |
|                                                                                                                                                                                                                                                                                         |   |                                                                                                                                     |
|                                                                                                                                                                                                                                                                                         | *      | By                 /s/                RICHARD L. HAWLEY                           |
|                                                                                                                                                                                                                                                                                         |   | Richard                L. Hawley                                                                                                         |
|                                                                                                                                                                                                                                                                                         |   | (Attorney-in-fact)                                                                                                                       |

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Table          of Contents

**Supplemental      Information**

----

Table          of Contents

**Exhibit      Index**

| Exhibit |   |                                                                                                                                                                                                                                                                                              |
|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number  |   | Description                of Document                                                                                                                                                                                                                                                            |
|    |   |                                                                                                                                                                                                                                                                                              |
| 3.01    | *      | Restated                Articles of Incorporation of the company as filed with the Illinois                Secretary of State on July 21, 2006. (File No. 1-7296, Form 10-Q                for June                30, 2006, Exhibit 3.01.)                                                       |
|    |   |                                                                                                                                                                                                                                                                                              |
| 3.02    | *      | By-Laws                of the company as amended by the company’s Board of Directors on January                15, 2004. (File No. 1-7296, Form 10-K for 2003, Exhibit                3.03.)                                                                                                |
|    |   |                                                                                                                                                                                                                                                                                              |
| 4.01    | *      | Indenture                of Commonwealth Edison Company to Continental Illinois National Bank                and                Trust Company of Chicago, Trustee, dated as of January 1, 1954. (File                No.                1-7296, Form 10-K for 1995, Exhibit 4.01.)                |
|    |   |                                                                                                                                                                                                                                                                                              |
| 4.02    | *      | Indenture                of Adoption of the company to Continental Illinois National Bank                and Trust                Company of Chicago, Trustee, dated February 9, 1954. (File No. 1-7296,                Form 10-K for 1995, Exhibit 4.02.)                                        |
|    |   |                                                                                                                                                                                                                                                                                              |
| 4.03    | *      | Supplemental                Indenture, dated February 15, 1998, of the company to Harris Trust                and                Savings Bank, Trustee, under Indenture dated as of January 1, 1954.                (File                No. 1-7296, Form 10-K for 1997, Exhibit 4.19.)           |
|    |   |                                                                                                                                                                                                                                                                                              |
| 4.04    | *      | Supplemental                Indenture, dated February 1, 1999, of the company to Harris Trust                and                Savings Bank, Trustee, under Indenture dated as of January 1, 1954.                (File                No. 1-7296, Form 10-K for 1998, Exhibit 4.19.)            |
|    |   |                                                                                                                                                                                                                                                                                              |
| 4.05    | *      | Supplemental                Indenture, dated February 1, 2001, of the company to BNY Midwest                Trust                Company, Trustee, under Indenture dated as of January 1, 1954. (File                No.                1-7296, Form 10-K for 2000, Exhibit 4.17.)                |
|    |   |                                                                                                                                                                                                                                                                                              |
| 4.06    | *      | Supplemental                Indenture, dated May 15, 2001, of the company to BNY Midwest Trust                Company, Trustee, under Indenture dated as of January 1, 1954. (File                No.                1-7296, Form 10-Q for June 2001, Exhibit 4.01.)                              |
|    |   |                                                                                                                                                                                                                                                                                              |
| 4.07    | *      | Supplemental                Indenture, dated August 15, 2001, of the company to BNY Midwest Trust                Company, Trustee, under Indenture dated as of January 1, 1954. (File                No.                1-7296, Form 10-Q for September 2001, Exhibit 4.01.)                      |
|    |   |                                                                                                                                                                                                                                                                                              |
| 4.08    | *      | Supplemental                Indenture, dated December 1, 2003, of the company to BNY Midwest                Trust                Company, Trustee, under Indenture dated as of January 1, 1954. (File                No.                1-7296, Form 10-K for 2003, Exhibit 4.09.)                |
|    |   |                                                                                                                                                                                                                                                                                              |
| 4.09    | *      | Supplemental                Indenture, dated December 1, 2003, of the company to BNY Midwest                Trust                Company, Trustee, under Indenture dated as of January 1, 1954. (File                No.                1-7296, Form 10-K for 2003, Exhibit                4.10.) |

| 4.10   | *      | Supplemental                Indenture, dated December 1, 2003, of the company to BNY Midwest                Trust                Company, Trustee, under Indenture dated as of January 1, 1954. (File                No.                1-7296, Form 10-K for 2003, Exhibit 4.11.) |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                               |
| 4.11   |   | Supplemental                Indenture, dated December                1, 2006, of Nicor Gas to BNY Midwest Trust Company, Trustee, under                Indenture dated as of January 1, 1954.                                                                                      |
|   |   |                                                                                                                                                                                                                                                                               |

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Table          of Contents

| Exhibit |   |                                                                                                                                                                                                                                                                                |
|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number  |   | Description                of Document                                                                                                                                                                                                                                              |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.01   | *      | Directors’                Deferred Compensation Plan. (File No. 1-7296, Form 10-K for December                31,                1983, Northern Illinois Gas Company, Exhibit 10.10.)                                                                                         |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.02   | *      | Amendment                and Restatement of Nicor Gas Supplementary Retirement Plan. (File                No.                1-7297, Form 10-Q for March 2000, Nicor Inc., Exhibit                10.01.)                                                                           |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.03   | *      | Directors                Compensation. (File No. 1-7296, Form 8-K for September 21, 2005,                Northern                Illinois Gas Company.)                                                                                                                             |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.04   | *      | 5-Year                Credit Agreement dated as of September 13, 2005. (File No. 1-7296,                Form                10-Q for September 30, 2005, Northern Illinois Gas Company, Exhibit                10.03.)                                                              |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.05   | *      | First                Amendment to the Northern Illinois Gas Company Supplemental Retirement                Plan. (File No. 1-7296, Form 10-K for December 31, 2005, Northern                Illinois                Gas Company, Exhibit 10.05.)                                    |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.06   | *      | 2006                Nicor Gas Annual Incentive Compensation Plan for Officers. (File                No.                1-7296, Form 10-Q for March 31, 2006, Northern Illinois Gas Company,                Exhibit 10.01.)                                                          |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.07   | *      | 1993                Interim Cooperative Agreement between Commonwealth Edison Company                and                Northern Illinois Gas Company. (File No. 1-7296, Form 10-Q for March                31,                2006, Northern Illinois Gas Company, Exhibit 10.02.) |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.08   | *      | Amendment                No. 1 to the 1993 Interim Cooperative Agreement. (File No. 1-7296,                Form                10-Q for March 31, 2006, Northern Illinois Gas Company, Exhibit                10.03.)                                                               |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.09   | *      | Amendment                No. 2 to the 1993 Inteirm Cooperative Agreement. (File No. 1-7296,                Form                10-Q for March 31, 2006, Northern Illinois Gas Company, Exhibit                10.04.)                                                               |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.10   | *      | Amendment                No. 3 to the 1993 Interim Cooperative Agreement. (File No. 1-7296,                Form                10-Q for March 31, 2006, Northern Illinois Gas Company, Exhibit                10.05.)                                                               |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.11   | *      | 210-Day                Credit Agreement dated as of October 26, 2006. (File No. 1-7296,                Form 10-Q                for September 30, 2006, Northern Illinois Gas Company, Exhibit                10.01.)                                                               |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.12   | *      | Second                Amendment to the 5-Year Credit Agreement dated as of October 26,                2006.                (File No. 1-7296, Form 10-Q for September 30, 2006, Northern Illinois                Gas                Company, Exhibit 10.02.)                         |
|    |   |                                                                                                                                                                                                                                                                                |
| 12.01   |   | Computation                of Consolidated Ratio of Earnings                to Fixed Charges.                                                                                                                                                                                       |
|    |   |                                                                                                                                                                                                                                                                                |
| 23.01   |   | Consent                of Independent Registered                Public Accounting Firm.                                                                                                                                                                                             |
|    |   |                                                                                                                                                                                                                                                                                |
| 24.01   |   | Powers                of Attorney.                                                                                                                                                                                                                                                  |
|    |   |                                                                                                                                                                                                                                                                                |
| 31.01   |   | Rule                13a-14(a)/15d-14(a)                Certification.                                                                                                                                                                                                               |
|    |   |                                                                                                                                                                                                                                                                                |
| 31.02   |   | Rule                13a-14(a)/15d-14(a)                Certification.                                                                                                                                                                                                               |

| 32.01  |   | Section                  1350                  Certification. |
|--------|--------|---------------------------------------------------------------|
|   |   |                                                          |
| 32.02  |   | Section                  1350                  Certification. |

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Table          of Contents

| *   | These                exhibits have been previously filed with the Securities and Exchange                Commission as exhibits to registration statements or to other filings                with                the Commission and are incorporated herein as exhibits by reference.                The                file number and exhibit number of each such exhibit, where applicable,                are                stated, in parentheses, in the description of such                exhibit. |
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