THE BUSINESSWEEK 50 RANKINGS + 25

70

Nicor

Nicor made it to the BusinessWeek 50 the hard way—by crawling back to where the natural gas utility stood in mid-2002, before accounting irregularities at an unregulated energy marketing unit wiped out half of its market capitalization in a week. Nicor shares, which had plunged to 22.75, nearly touched 50 last fall and now trade at around 46. The Naperville (Ill.)-based company sells gas to some 2.2 million customers around Chicago, a region that has been expanding. CEO Russ Strobel, a lawyer who moved into the top spot in 2005, has seen Nicor’s customer base grow almost 10% in three years. Cold winters help, and the unseasonably chilly first months of 2007 in Illinois could lift results. Still, analysts have doubts. Because of regulation, Nicor can’t hike rates to exploit demand. Analysts predict earnings will slip in 2007 for the second year in a row.

Overall Grade

A-

Market Data

GAS

Market Value
(2/28/2007)

$2.1 Billion

Profitability*

14.6%

A

Sales Growth Rate**

5.3%

C

12-Month Sales

$3.0 Billion

12-Month Net Income

$0.1 Billion

Total Return Past 12 Months

13.0%

Past 36 Months

48.1%

Economic SectorUtilities
IndustryGas Utilities
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.

Russ M. Strobel

Russ M. Strobel, 54

CEO since 2005


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Data as of 2/28/07 provided by Standard & Poor's Compustat