Nicor Inc.
                       Annual Meeting of Stockholders
                         April 30, 2003 10:30 A.M.
               Remarks of Thomas L. Fisher, Chairman and CEO


Reflecting back, I am extremely disappointed with the events of 2002 that led to
our financial restatements, our current regulatory review and the decline in our
stock price. Let me stress we have taken these matters very seriously, and our
management team will do what's necessary to get our company back on track for
all stakeholders. We continue to focus on resolving current regulatory and
governmental uncertainties as quickly as possible, and employing appropriate
measures to make sure problems of this nature do not occur in the future.

A key step in this direction was the naming of Russ Strobel as our new president
last fall. Prior to his promotion, Russ was our Executive Vice President,
General Counsel and Secretary, and he is now responsible for administrative,
financial, regulatory and legal affairs. Russ brings tremendous energy and
vision to this position and will be instrumental in the long-term success of our
businesses. Russ was invaluable in assisting us during our mercury response and
has over 25 years of business, legal and regulatory experience. Russ' knowledge
and experience will contribute significantly in our ability to meet the demands
of a changing regulatory environment and the heightened awareness on corporate
governance.

Turning to our 2002 financial results, diluted earnings per common share
increased 7 percent or 19 cents per share, compared to restated diluted earnings
per share of $2.69 in 2001. The full year results of Nicor were impacted by
several key factors - some positive and some negative. Mercury-related insurance
recoveries and adjustments, operating improvements in our shipping segment,
Tropical Shipping, and lower net interest expense positively affected our 2002
financial results.

These positive factors were partially offset by higher operating costs at our
gas distribution segment, Nicor Gas, lower equity results at Nicor Energy, our
former retail energy marketing joint venture, and the overall negative impact of
a weak economy on all of our businesses.

The state of the economy and the pace of its recovery will have an important
impact on the business results and level of profitability of Nicor. During these
times of uncertainty, we have kept our focus on the customer, carefully managed
our costs, and continued to manage our operations for the long term - factors we
should be able to leverage as the economy strengthens.

Still, there are other challenges that will carry over from 2002. Higher
operating costs driven by national issues such as increasing health care
expenses and lower return on pension assets at the utility will negatively
impact our earnings. We must also continue to rebuild relationships with our
utility customers, investors and regulators. With these factors in mind, and
without the planned benefit of significant mercury-related settlements and
reserve adjustments like those recorded in 2002, Nicor's 2003 earnings are
expected to be lower than 2002, in the $2.40 to $2.60 per share range.

Of course, over the past several months we have also been faced with additional
challenges due to the dramatically higher costs our customers and company have
had to pay for natural gas. Nicor Gas purchases natural gas supplies at market
rates and passes those costs on to customers without markup. In an effort to
ease the financial impact of higher gas bills on our customers, we continue to
offer utility budget plans and other billing protection services. We have also
mitigated the impact of gas price volatility by entering into conservative
hedging transactions.

Despite these challenges, our long-term financial objectives and goals have not
changed. We remain committed to achieving long-term average annual
earnings-per-share growth rates in the mid- to high-single digits, albeit from a
smaller 2003 earnings base. We will also continue to manage each of our
businesses to generate solid returns on equity by building on our core strengths
- including our assets, reputation, expertise, location, customer base and
financial resources. And we will seek to provide a consistent and stable
dividend payout.

To accomplish our goals we will continue to focus on four strategic initiatives
- growing our core businesses, optimizing our storage and transmission assets,
expanding our energy services and building on our financial strength and human
resource talents.

Our two core businesses, Nicor Gas and Tropical Shipping, provide a strong
foundation.

Nicor Gas is the primary source of Nicor's earnings, and its success is
fundamental in achieving our goals. In addition to an excellent service
territory, Nicor Gas has a number of competitive advantages that contribute to
its success and provides a foundation for our future. These advantages include
some of the highest operating efficiencies in the nation, a strategic location
on the U.S. pipeline grid, and significant underground storage. Over the past
several years Nicor Gas has added approximately 30,000 new customers per year
and continues to promote increased use of natural gas among existing customers.
Aside from traditional customer growth, Nicor Gas has also fostered
opportunities over the years such as the Chicago Hub, Nicor Enerchange and Nicor
Services. Combined, these non-traditional activities contributed over $25
million of pretax earnings in 2002.

Our other core business, which contributes about 10 percent to Nicor's operating
income, is Tropical Shipping. Tropical Shipping is a niche player with a history
of producing high operating margins. The company is a leading carrier of U.S.
exports from the East Coast to the Caribbean and is one of the largest shippers
of containerized cargo in the Caribbean region. A reputation for dependable,
on-time service has helped the company establish its leading market position.

We are expecting modest earnings growth in this business. However, the strength
of the U.S. and Caribbean economies and levels of Caribbean tourism do cause the
results of this very competitive business to fluctuate from year to year.
Nevertheless, our continued focus on operational excellence and identifying
opportunities to expand into new markets through acquisitions or partnerships
should result in continued strong performance from this business.

We also continue to develop other energy-related businesses that complement our
core ventures and enhance the value of the services we offer customers and the
returns we generate for shareholders. The Chicago Hub, Nicor Enerchange and
Horizon Pipeline are all businesses that have stemmed from our significant
natural gas storage capabilities, our strategic location on the Midwest pipeline
grid and the changing energy environment.

We have also expanded our energy services business, Nicor Services. Our decision
last year to withdraw from continued involvement in Nicor Energy has not altered
our plans to further develop products and services that compete in emerging
energy markets. During 2002, Nicor Services increased its contribution to
earnings growth as it expanded its customer base and enhanced its menu of
product and service offerings.

Historically, we have generated returns on equity among the highest in the
utility industry and throughout this time, our financial position has remained
exceptionally strong. Our balance sheet, combined with excellent free cash flow,
gives us the flexibility to take advantage of investment opportunities in our
existing and related businesses, and allows us to consider a variety of
alternatives for generating shareholder value. We also have high debt ratings
and a dividend rate that has grown each of the past 16 years and is well covered
by earnings. Underlying this financial strength is a team of quality employees,
each committed to executing our strategies within a culture that is supported by
values that promote teamwork, ethical behavior, diversity and operational
excellence.

Looking ahead, we certainly have challenges, but Nicor has met its challenges in
the past and I am confident we will continue to do so in the future. Our
heritage promotes quality service, personal responsibility, responsiveness and
teamwork. Speaking for Nicor's Directors and all its employees, I can assure you
that we are all dedicated to growing each of our businesses and meeting our
long-term financial objectives.