Vectren 2008 Annual Report Download - page 10

8 Vectren 2008
fallen to levels not seen since early 2001, energy bills will
continue to be a burden, especially to those households
that are managing job losses or other nancial hardships.
For customers who are facing these challenges, we have
encouraged them to contact us, so we may assist with a
number of tools and resources to help reduce their energy
consumption and manage costs.
While the economic environment ahead is uncertain, Vectren’s
core utility business provides a solid foundation for long-
term growth. Over time, needed infrastructure investments,
combined with signicant cost controls, will continue to be key
drivers of utility results. Future nonutility results should have
numerous opportunities for improvement. New, higher, market
priced coal contracts and additional production from the new
Oaktown mines and from the reconguration at Prosperity
mine will boost results at Fuels. ProLiance is positioned to
optimize arbitrage opportunities created by price differences
across its storage assets and various pipelines. The American
Recovery and Reinvestment Act should provide for the
investment of billions of dollars in utility infrastructure, energy
efciency and renewable energy projects that will benet
Miller and ESG.
Given the uncertainty of the economic downturn, we have
initiated aggressive cost-cutting measures to manage our
operating and maintenance expenses. Access to future capital
markets is unclear, and for now, we have reduced the number
of planned capital projects. However, we have recently been
successful in attracting capital to meet a growing need for
infrastructure investments and we continue to strategize about
restoring some projects that are needed and may benet from
stimulus measures.
2008 marked the 49th consecutive year annual dividends
paid have increased, and in December, the dividend rate was
increased 3.1 percent. For many utility shareholders, reliable
dividends, such as Vectren’s, provide a much needed source
of income to pay everyday bills. Regrettably, the current 15
percent dividend tax rate is set to expire at the end of 2010.
Defend My Dividend is a national grassroots campaign that
gives utility investors a powerful and unied voice in an effort to
make the current dividend tax rate permanent. We encourage
you to visit www.defendmydividend.com to let your local and
state representatives know how important lower dividend taxes
are to you.
Indiana shareholders should also take time to join the Indiana
Utility Shareholder Association. This newly-founded organization
focuses on state and national issues that impact utility shareholder
value and can be found on the Internet at www.iusaonline.org.
Before closing, we would like to give our personal thanks
and gratitude to Dick Shymanski who will retire from the
Board of Directors when his term expires this May. His vision
and leadership have served shareholders well in guiding
Vectren’s success for the last 20 years, and we wish him
the very best in his retirement. Additionally, the Board has
nominated for election Carl Chapman, Vectren’s president
and chief operating ofcer, whose 24 years of service with
the company will continue to be a valuable asset.
These difcult economic times will test our management team
like never before. We feel condent in the ability of our
team of executive leaders to effectively balance the needs
of all our stakeholders while pursuing improved nancial
performance. In both living smart and working smart, we can
help customers efciently manage energy costs and ensure
Vectren meets the challenges that lay ahead.
Niel C. Ellerbrook
Chairman and Chief Executive Ofcer
Carl L. Chapman
President and Chief Operating Ofcer
February 19, 2009