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<br /> CitizensEnergyGroup ▪ AnnualReport2008<br /> On the Cover: Citizens Gas President & CEO Carey Lykins, center,<br /> is flanked by Citizens employees Anna Castaneda, Gary Mann,<br /> Terry Houpt, and Angela Ros.<br /> CitizensEnergyGroup<br /> Annual Report 2008 · Indianapolis, IN<br /> TrustProfile<br /> Citizens Energy Group (Citizens, the Company or the Trust) operates as a Public Charitable Trust engaged in<br /> a variety of businesses including:<br /> · Citizens Gas – Local distribution company (LDC) transporting natural gas to more than 264,000 customers in<br /> and around Indianapolis.<br /> · Citizens Thermal – District steam heating and chilled water cooling provider serving business, industrial and<br /> institutional facilities across the Downtown Indianapolis area.<br /> · Citizens Oil – Producer of oil in Greene County, Indiana.<br /> · Citizens Resources (Resources) – Formerly Citizens By-Products, an un<a title="2008 Annual Report page 1" href="http://viewer.zmags.com/publication/f052a7aa?page=1"> CitizensEnergyGroup ▪ AnnualReport2008</a> <a title="2008 Annual Report page 2" href="http://viewer.zmags.com/publication/f052a7aa?page=2"> On the Cover: Citizens Gas President & CEO Carey </a> <a title="2008 Annual Report page 3" href="http://viewer.zmags.com/publication/f052a7aa?page=3"> CitizensEnergyGroup Annual Report 2008 · Indianap</a> <a title="2008 Annual Report page 4" href="http://viewer.zmags.com/publication/f052a7aa?page=4"> TrustProfile Citizens Energy Group (C</a> <a title="2008 Annual Report page 5" href="http://viewer.zmags.com/publication/f052a7aa?page=5"> TableofContents Vision,MissionandValues..........</a> <a title="2008 Annual Report page 6" href="http://viewer.zmags.com/publication/f052a7aa?page=6"> OurVision OurMission We will fulfill the promise </a> <a title="2008 Annual Report page 7" href="http://viewer.zmags.com/publication/f052a7aa?page=7"> 5</a> <a title="2008 Annual Report page 8" href="http://viewer.zmags.com/publication/f052a7aa?page=8"> Carey Lykins, Citizens Energy Group President & C</a> <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"> 8 LettertoCitizens Annual Report 2008</a> <a title="2008 Annual Report page 12" href="http://viewer.zmags.com/publication/f052a7aa?page=12"> NeighborlyE “A brand is undermine of a thousa For</a> <a title="2008 Annual Report page 13" href="http://viewer.zmags.com/publication/f052a7aa?page=13"> Carey Lykins President & CEO DearFellowCitizens: </a> <a title="2008 Annual Report page 14" href="http://viewer.zmags.com/publication/f052a7aa?page=14"> “Quality service starts with well-traine</a> <a title="2008 Annual Report page 15" href="http://viewer.zmags.com/publication/f052a7aa?page=15"> Leveraging the facilities manageme</a> <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 Gas Distribution Operat</a> <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"> CitizensEnergySavers Annual Report 2008</a> <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> <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 the India</a> <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&Cheer Annual Report 2008</a> <a title="2008 Annual Report page 26" href="http://viewer.zmags.com/publication/f052a7aa?page=26"> 24 SftandUpandCheer orCitizensThermalComfort </a> <a title="2008 Annual Report page 27" href="http://viewer.zmags.com/publication/f052a7aa?page=27"> Todd Fuller, Manager of Chilled Water, and Bob Pu</a> <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 Facility Operations f</a> <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"> EfficientTakeoff Annual Report 2008</a> <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> <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 Keep Indianapolis Bea</a> <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"> GreenHeadquarters Annual Report 2008</a> <a title="2008 Annual Report page 38" href="http://viewer.zmags.com/publication/f052a7aa?page=38"> 36 CGitizensSupporting reenRedevelopment </a> <a title="2008 Annual Report page 39" href="http://viewer.zmags.com/publication/f052a7aa?page=39"> David Forsell chats with Jean Richcreek, </a> <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"> FinancialReport Annual Report 2008</a> <a title="2008 Annual Report page 42" href="http://viewer.zmags.com/publication/f052a7aa?page=42"> ManagementDiscussionandAnalysis Forward-lookingSt</a> <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> <a title="2008 Annual Report page 44" href="http://viewer.zmags.com/publication/f052a7aa?page=44"> Resources; Westfield Gas – increase of $0.4 milli</a> <a title="2008 Annual Report page 45" href="http://viewer.zmags.com/publication/f052a7aa?page=45"> EquityInEarningsOfAffiliates Equity in Earnings o</a> <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> <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> <a title="2008 Annual Report page 48" href="http://viewer.zmags.com/publication/f052a7aa?page=48"> ConsolidatedStatementsofOperations Citizens Energ</a> <a title="2008 Annual Report page 49" href="http://viewer.zmags.com/publication/f052a7aa?page=49"> ConsolidatedStatementsofFinancialPosition Citizen</a> <a title="2008 Annual Report page 50" href="http://viewer.zmags.com/publication/f052a7aa?page=50"> ConsolidatedStatementsofCashFlows Citizens Energy</a> <a title="2008 Annual Report page 51" href="http://viewer.zmags.com/publication/f052a7aa?page=51"> ConsolidatedStatementsofEquity Citizens Energy Gr</a> <a title="2008 Annual Report page 52" href="http://viewer.zmags.com/publication/f052a7aa?page=52"> NotesToConsolidatedFinancialStatements City of In</a> <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> <a title="2008 Annual Report page 54" href="http://viewer.zmags.com/publication/f052a7aa?page=54"> N. Regulatory Developments, Assets And Liabilit</a> <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> <a title="2008 Annual Report page 56" href="http://viewer.zmags.com/publication/f052a7aa?page=56"> S. New Accounting Standards </a> <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> <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> <a title="2008 Annual Report page 60" href="http://viewer.zmags.com/publication/f052a7aa?page=60"> In addition to providing defined benefit pension </a> <a title="2008 Annual Report page 61" href="http://viewer.zmags.com/publication/f052a7aa?page=61"> Defined Benefit Pension (In Thousan</a> <a title="2008 Annual Report page 62" href="http://viewer.zmags.com/publication/f052a7aa?page=62"> The former Manufacturing business segment is now </a> <a title="2008 Annual Report page 63" href="http://viewer.zmags.com/publication/f052a7aa?page=63"> SegmentFootnote-ConsolidatedStatementOfOperations</a> <a title="2008 Annual Report page 64" href="http://viewer.zmags.com/publication/f052a7aa?page=64"> SegmentFootnote-ConsolidatedStatementOfFinancialP</a> <a title="2008 Annual Report page 65" href="http://viewer.zmags.com/publication/f052a7aa?page=65"> Capital Expenditures </a> <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> <a title="2008 Annual Report page 68" href="http://viewer.zmags.com/publication/f052a7aa?page=68"> Report Of Management The Trust ha</a> <a title="2008 Annual Report page 69" href="http://viewer.zmags.com/publication/f052a7aa?page=69"> BoardofDirectors-BoardofTrustee-ExecutiveManageme</a> <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> <a title="2008 Annual Report page 72" href="http://viewer.zmags.com/publication/f052a7aa?page=72"> 2020 North Meridian Street Indianapolis, Indiana </a>