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&lt;br /&gt; CitizensEnergyGroup &#9642; AnnualReport2008&lt;br /&gt; On the Cover: Citizens Gas President &amp; CEO Carey Lykins, center,&lt;br /&gt; is flanked by Citizens employees Anna Castaneda, Gary Mann,&lt;br /&gt; Terry Houpt, and Angela Ros.&lt;br /&gt; CitizensEnergyGroup&lt;br /&gt; Annual Report 2008 &middot; Indianapolis, IN&lt;br /&gt; TrustProfile&lt;br /&gt; Citizens Energy Group (Citizens, the Company or the Trust) operates as a Public Charitable Trust engaged in&lt;br /&gt; a variety of businesses including:&lt;br /&gt; &lt;br /&gt; &middot; Citizens Gas &ndash; Local distribution company (LDC) transporting natural gas to more than 264,000 customers in&lt;br /&gt; and around Indianapolis.&lt;br /&gt; &middot; Citizens Thermal &ndash; District steam heating and chilled water cooling provider serving business, industrial and&lt;br /&gt; institutional facilities across the Downtown Indianapolis area.&lt;br /&gt; <a title="2008 Annual Report page 1" href="http://viewer.zmags.com/publication/f052a7aa?page=1">CitizensEnergyGroup &#9642; AnnualReport2008</a> CitizensEnergyGroup &#9642; AnnualReport2008<a title="2008 Annual Report page 2" href="http://viewer.zmags.com/publication/f052a7aa?page=2">On the Cover: Citizens Gas President &amp; CEO Carey </a> On the Cover: Citizens Gas President &amp; CEO Carey <a title="2008 Annual Report page 3" href="http://viewer.zmags.com/publication/f052a7aa?page=3">CitizensEnergyGroupAnnual Report 2008 &middot; Indianap</a> CitizensEnergyGroupAnnual Report 2008 &middot; Indianap<a title="2008 Annual Report page 4" href="http://viewer.zmags.com/publication/f052a7aa?page=4">TrustProfile Citizens Energy Group (C</a> TrustProfile Citizens Energy Group (C<a title="2008 Annual Report page 5" href="http://viewer.zmags.com/publication/f052a7aa?page=5">TableofContentsVision,MissionandValues..........</a> TableofContentsVision,MissionandValues..........<a title="2008 Annual Report page 6" href="http://viewer.zmags.com/publication/f052a7aa?page=6">OurVisionOurMissionWe will fulfill the promise </a> OurVisionOurMissionWe will fulfill the promise <a title="2008 Annual Report page 7" href="http://viewer.zmags.com/publication/f052a7aa?page=7">5</a> 5<a title="2008 Annual Report page 8" href="http://viewer.zmags.com/publication/f052a7aa?page=8">Carey Lykins, Citizens Energy GroupPresident &amp; C</a> Carey Lykins, Citizens Energy GroupPresident &amp; C<a title="2008 Annual Report page 9" href="http://viewer.zmags.com/publication/f052a7aa?page=9"></a> <a title="2008 Annual Report page 10" href="http://viewer.zmags.com/publication/f052a7aa?page=10"></a> <a title="2008 Annual Report page 11" href="http://viewer.zmags.com/publication/f052a7aa?page=11">8LettertoCitizensAnnual Report 2008</a> 8LettertoCitizensAnnual Report 2008<a title="2008 Annual Report page 12" href="http://viewer.zmags.com/publication/f052a7aa?page=12">NeighborlyE&ldquo;A brand isundermineof a thousaFor</a> NeighborlyE&ldquo;A brand isundermineof a thousaFor<a title="2008 Annual Report page 13" href="http://viewer.zmags.com/publication/f052a7aa?page=13">Carey LykinsPresident &amp; CEODearFellowCitizens:</a> Carey LykinsPresident &amp; CEODearFellowCitizens:<a title="2008 Annual Report page 14" href="http://viewer.zmags.com/publication/f052a7aa?page=14"> &ldquo;Quality service starts with well-traine</a> &ldquo;Quality service starts with well-traine<a title="2008 Annual Report page 15" href="http://viewer.zmags.com/publication/f052a7aa?page=15"> Leveraging the facilities manageme</a> Leveraging the facilities manageme<a title="2008 Annual Report page 16" href="http://viewer.zmags.com/publication/f052a7aa?page=16"></a> <a title="2008 Annual Report page 17" href="http://viewer.zmags.com/publication/f052a7aa?page=17">Paul Puckett, Director of GasDistribution Operat</a> Paul Puckett, Director of GasDistribution Operat<a title="2008 Annual Report page 18" href="http://viewer.zmags.com/publication/f052a7aa?page=18"></a> <a title="2008 Annual Report page 19" href="http://viewer.zmags.com/publication/f052a7aa?page=19">CitizensEnergySaversAnnual Report 2008</a> CitizensEnergySaversAnnual Report 2008<a title="2008 Annual Report page 20" href="http://viewer.zmags.com/publication/f052a7aa?page=20"> </a> <a title="2008 Annual Report page 21" href="http://viewer.zmags.com/publication/f052a7aa?page=21">CPitizensEnergySaversMeans eaceofMindandLowerBi</a> CPitizensEnergySaversMeans eaceofMindandLowerBi<a title="2008 Annual Report page 22" href="http://viewer.zmags.com/publication/f052a7aa?page=22"></a> <a title="2008 Annual Report page 23" href="http://viewer.zmags.com/publication/f052a7aa?page=23">Barney Levengood, Executive Director of theIndia</a> Barney Levengood, Executive Director of theIndia<a title="2008 Annual Report page 24" href="http://viewer.zmags.com/publication/f052a7aa?page=24"></a> <a title="2008 Annual Report page 25" href="http://viewer.zmags.com/publication/f052a7aa?page=25">StandUp&amp;CheerAnnual Report 2008</a> StandUp&amp;CheerAnnual Report 2008<a title="2008 Annual Report page 26" href="http://viewer.zmags.com/publication/f052a7aa?page=26">24SftandUpandCheer orCitizensThermalComfort </a> 24SftandUpandCheer orCitizensThermalComfort <a title="2008 Annual Report page 27" href="http://viewer.zmags.com/publication/f052a7aa?page=27">Todd Fuller, Manager of Chilled Water, andBob Pu</a> Todd Fuller, Manager of Chilled Water, andBob Pu<a title="2008 Annual Report page 28" href="http://viewer.zmags.com/publication/f052a7aa?page=28"></a> <a title="2008 Annual Report page 29" href="http://viewer.zmags.com/publication/f052a7aa?page=29">John Eddington, Director of FacilityOperations f</a> John Eddington, Director of FacilityOperations f<a title="2008 Annual Report page 30" href="http://viewer.zmags.com/publication/f052a7aa?page=30"></a> <a title="2008 Annual Report page 31" href="http://viewer.zmags.com/publication/f052a7aa?page=31">EfficientTakeoffAnnual Report 2008</a> EfficientTakeoffAnnual Report 2008<a title="2008 Annual Report page 32" href="http://viewer.zmags.com/publication/f052a7aa?page=32"> </a> <a title="2008 Annual Report page 33" href="http://viewer.zmags.com/publication/f052a7aa?page=33">ENfefwiciAenirtpToarkteToeffrmfoirnal Wi</a> ENfefwiciAenirtpToarkteToeffrmfoirnal Wi<a title="2008 Annual Report page 34" href="http://viewer.zmags.com/publication/f052a7aa?page=34"></a> <a title="2008 Annual Report page 35" href="http://viewer.zmags.com/publication/f052a7aa?page=35">David Forsell, President of KeepIndianapolis Bea</a> David Forsell, President of KeepIndianapolis Bea<a title="2008 Annual Report page 36" href="http://viewer.zmags.com/publication/f052a7aa?page=36"></a> <a title="2008 Annual Report page 37" href="http://viewer.zmags.com/publication/f052a7aa?page=37">GreenHeadquartersAnnual Report 2008</a> GreenHeadquartersAnnual Report 2008<a title="2008 Annual Report page 38" href="http://viewer.zmags.com/publication/f052a7aa?page=38">36CGitizensSupporting reenRedevelopment </a> 36CGitizensSupporting reenRedevelopment <a title="2008 Annual Report page 39" href="http://viewer.zmags.com/publication/f052a7aa?page=39">David Forsell chats with Jean Richcreek, </a> David Forsell chats with Jean Richcreek, <a title="2008 Annual Report page 40" href="http://viewer.zmags.com/publication/f052a7aa?page=40"></a> <a title="2008 Annual Report page 41" href="http://viewer.zmags.com/publication/f052a7aa?page=41">FinancialReportAnnual Report 2008</a> FinancialReportAnnual Report 2008<a title="2008 Annual Report page 42" href="http://viewer.zmags.com/publication/f052a7aa?page=42">ManagementDiscussionandAnalysisForward-lookingSt</a> ManagementDiscussionandAnalysisForward-lookingSt<a title="2008 Annual Report page 43" href="http://viewer.zmags.com/publication/f052a7aa?page=43">versus 2,617 customers at September 30, 2007. Tot</a> versus 2,617 customers at September 30, 2007. Tot<a title="2008 Annual Report page 44" href="http://viewer.zmags.com/publication/f052a7aa?page=44">Resources; Westfield Gas &ndash; increase of $0.4 milli</a> Resources; Westfield Gas &ndash; increase of $0.4 milli<a title="2008 Annual Report page 45" href="http://viewer.zmags.com/publication/f052a7aa?page=45">EquityInEarningsOfAffiliatesEquity in Earnings o</a> EquityInEarningsOfAffiliatesEquity in Earnings o<a title="2008 Annual Report page 46" href="http://viewer.zmags.com/publication/f052a7aa?page=46">portfolios. As a result, several of the primary b</a> portfolios. As a result, several of the primary b<a title="2008 Annual Report page 47" href="http://viewer.zmags.com/publication/f052a7aa?page=47">On February 28, 2007, the IURC approved a normal</a> On February 28, 2007, the IURC approved a normal<a title="2008 Annual Report page 48" href="http://viewer.zmags.com/publication/f052a7aa?page=48">ConsolidatedStatementsofOperationsCitizens Energ</a> ConsolidatedStatementsofOperationsCitizens Energ<a title="2008 Annual Report page 49" href="http://viewer.zmags.com/publication/f052a7aa?page=49">ConsolidatedStatementsofFinancialPositionCitizen</a> ConsolidatedStatementsofFinancialPositionCitizen<a title="2008 Annual Report page 50" href="http://viewer.zmags.com/publication/f052a7aa?page=50">ConsolidatedStatementsofCashFlowsCitizens Energy</a> ConsolidatedStatementsofCashFlowsCitizens Energy<a title="2008 Annual Report page 51" href="http://viewer.zmags.com/publication/f052a7aa?page=51">ConsolidatedStatementsofEquityCitizens Energy Gr</a> ConsolidatedStatementsofEquityCitizens Energy Gr<a title="2008 Annual Report page 52" href="http://viewer.zmags.com/publication/f052a7aa?page=52">NotesToConsolidatedFinancialStatementsCity of In</a> NotesToConsolidatedFinancialStatementsCity of In<a title="2008 Annual Report page 53" href="http://viewer.zmags.com/publication/f052a7aa?page=53">Charitable Trust, is not subject to federal or st</a> Charitable Trust, is not subject to federal or st<a title="2008 Annual Report page 54" href="http://viewer.zmags.com/publication/f052a7aa?page=54">N. Regulatory Developments, Assets And Liabilit</a> N. Regulatory Developments, Assets And Liabilit<a title="2008 Annual Report page 55" href="http://viewer.zmags.com/publication/f052a7aa?page=55">costs, and interest costs for the use of funds in</a> costs, and interest costs for the use of funds in<a title="2008 Annual Report page 56" href="http://viewer.zmags.com/publication/f052a7aa?page=56">S. New Accounting Standards </a> S. New Accounting Standards <a title="2008 Annual Report page 57" href="http://viewer.zmags.com/publication/f052a7aa?page=57">the impact this statement will have on its consol</a> the impact this statement will have on its consol<a title="2008 Annual Report page 58" href="http://viewer.zmags.com/publication/f052a7aa?page=58"> </a> <a title="2008 Annual Report page 59" href="http://viewer.zmags.com/publication/f052a7aa?page=59"> Minimum </a> Minimum <a title="2008 Annual Report page 60" href="http://viewer.zmags.com/publication/f052a7aa?page=60">In addition to providing defined benefit pension </a> In addition to providing defined benefit pension <a title="2008 Annual Report page 61" href="http://viewer.zmags.com/publication/f052a7aa?page=61">Defined Benefit Pension (In Thousan</a> Defined Benefit Pension (In Thousan<a title="2008 Annual Report page 62" href="http://viewer.zmags.com/publication/f052a7aa?page=62">The former Manufacturing business segment is now </a> The former Manufacturing business segment is now <a title="2008 Annual Report page 63" href="http://viewer.zmags.com/publication/f052a7aa?page=63">SegmentFootnote-ConsolidatedStatementOfOperations</a> SegmentFootnote-ConsolidatedStatementOfOperations<a title="2008 Annual Report page 64" href="http://viewer.zmags.com/publication/f052a7aa?page=64">SegmentFootnote-ConsolidatedStatementOfFinancialP</a> SegmentFootnote-ConsolidatedStatementOfFinancialP<a title="2008 Annual Report page 65" href="http://viewer.zmags.com/publication/f052a7aa?page=65">Capital Expenditures </a> Capital Expenditures <a title="2008 Annual Report page 66" href="http://viewer.zmags.com/publication/f052a7aa?page=66"> </a> <a title="2008 Annual Report page 67" href="http://viewer.zmags.com/publication/f052a7aa?page=67">Independent Auditors' Report To the B</a> Independent Auditors' Report To the B<a title="2008 Annual Report page 68" href="http://viewer.zmags.com/publication/f052a7aa?page=68">Report Of Management The Trust ha</a> Report Of Management The Trust ha<a title="2008 Annual Report page 69" href="http://viewer.zmags.com/publication/f052a7aa?page=69">BoardofDirectors-BoardofTrustee-ExecutiveManageme</a> BoardofDirectors-BoardofTrustee-ExecutiveManageme<a title="2008 Annual Report page 70" href="http://viewer.zmags.com/publication/f052a7aa?page=70">.</a> .<a title="2008 Annual Report page 71" href="http://viewer.zmags.com/publication/f052a7aa?page=71">Citizens Energy Group has been designated a Green</a> Citizens Energy Group has been designated a Green<a title="2008 Annual Report page 72" href="http://viewer.zmags.com/publication/f052a7aa?page=72">2020 North Meridian StreetIndianapolis, Indiana </a> 2020 North Meridian StreetIndianapolis, Indiana