VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share amounts)
(Unaudited)
	Three Months					Twelve Months
	Ended December 31					Ended December 31
	2008			2007		2008		2007
OPERATING REVENUES:
Gas utility	$	430.3		$	379.4	$	1,432.7	$	1,269.4
Electric utility		121.9			126.3		524.2		487.9
Nonutility revenues		155.1			139.1		527.8		524.6
Total operating revenues		707.3			644.8		2,484.7		2,281.9
OPERATING EXPENSES:
Cost of gas sold		297.1			255.2		983.1		847.2
Cost of fuel and purchased power		39.7			45.3		182.9		174.8
Cost of nonutility revenues		83.8			77.5		282.2		287.7
Other operating		137.9			122.5		506.3		456.9
Depreciation and amortization		49.8			45.1		192.3		184.8
Taxes other than income taxes		20.6			19.1		74.5		70.0
Total operating expenses		628.9			564.7		2,221.3		2,021.4
OPERATING INCOME		78.4			80.1		263.4		260.5
OTHER INCOME:
Equity in earnings of unconsolidated affiliates		8.4			4.2		37.4		22.9
Other income/(expense)- net		(0.3	)		13.7		2.1		36.8
Total other income		8.1			17.9		39.5		59.7
INTEREST EXPENSE		25.4			26.9		97.8		101.0
INCOME BEFORE INCOME TAXES		61.1			71.1		205.1		219.2
INCOME TAXES		24.0			31.1		76.1		76.0
MINORITY INTEREST		-			0.1		-		0.1
NET INCOME	$	37.1		$	39.9	$	129.0	$	143.1
AVERAGE COMMON SHARES OUTSTANDING		80.6			75.9		78.3		75.9
DILUTED COMMON SHARES OUTSTANDING		81.0			76.7		78.9		76.6
EARNINGS PER SHARE OF COMMON STOCK
BASIC	$	0.46		$	0.53	$	1.65	$	1.89
DILUTED	$	0.46		$	0.52	$	1.63	$	1.87

VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
(Unaudited)
	Three Months					Twelve Months
	Ended December 31					Ended December 31
	2008			2007		2008		2007
OPERATING REVENUES:
Gas utility	$	430.3		$	379.4	$	1,432.7	$	1,269.4
Electric utility		121.9			126.3		524.2		487.9
Other		-			0.4		1.8		1.7
Total operating revenues		552.2			506.1		1,958.7		1,759.0
OPERATING EXPENSES:
Cost of gas sold		297.1			255.2		983.1		847.2
Cost of fuel and purchased power		39.7			45.3		182.9		174.8
Other operating		82.6			67.7		300.3		266.1
Depreciation and amortization		42.3			39.0		165.5		158.4
Taxes other than income taxes		20.5			18.5		72.3		68.1
Total operating expenses		482.2			425.7		1,704.1		1,514.6
OPERATING INCOME		70.0			80.4		254.6		244.4
OTHER INCOME (EXPENSE) - NET		(0.9	)		3.2		4.0		9.4
INTEREST EXPENSE		20.4			21.8		79.9		80.6
INCOME BEFORE INCOME TAXES		48.7			61.8		178.7		173.2
INCOME TAXES		18.0			24.9		67.6		66.7
NET INCOME	$	30.7		$	36.9	$	111.1	$	106.5

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Millions - Unaudited)
	December 31,			December 31,
	2008			2007
ASSETS
Current Assets
Cash & cash equivalents	$	93.2		$	20.6
Accounts receivable - less reserves of $5.6 &
$3.7, respectively		226.7			189.4
Accrued unbilled revenues		197.0			168.2
Inventories		131.0			160.9
Recoverable fuel & natural gas costs		3.1			-
Prepayments & other current assets		124.6			160.5
Total current assets		775.6			699.6
Utility Plant
Original cost		4,335.3			4,062.9
Less:  accumulated depreciation & amortization		1,615.0			1,523.2
Net utility plant		2,720.3			2,539.7
Investments in unconsolidated affiliates		179.1			208.8
Other utility and corporate investments		25.7			26.3
Other nonutility investments		45.9			50.7
Nonutility property - net		390.2			320.3
Goodwill - net		240.2			238.0
Regulatory assets		216.7			175.3
Other assets		39.2			37.7
TOTAL ASSETS	$	4,632.9		$	4,296.4
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	266.1		$	187.4
Accounts payable to affiliated companies		75.2			83.7
Refundable fuel & natural gas costs		4.1			27.2
Accrued liabilities		175.0			171.8
Short-term borrowings		519.5			557.0
Current maturities of long-term debt		0.4			0.3
Long-term debt subject to tender		80.0			-
Total current liabilities		1,120.3			1,027.4
Long-term Debt - Net of Current Maturities &
Debt Subject to Tender		1,247.9			1,245.4
Deferred Income Taxes & Other Liabilities
Deferred income taxes		353.4			318.1
Regulatory liabilities		315.1			307.2
Deferred credits & other liabilities		244.2			164.2
Total deferred credits & other liabilities		912.7			789.5
Minority Interest in Subsidiary		0.4			0.4
Common Shareholders' Equity
Common stock (no par value) – issued & outstanding
81.0 and 76.3 shares, respectively		659.1			532.7
Retained earnings		712.8			688.5
Accumulated other comprehensive income/(loss)		(20.3	)		12.5
Total common shareholders' equity		1,351.6			1,233.7
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	4,632.9		$	4,296.4

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
	For the twelve months ended
	December 31,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	129.0		$	143.1
Adjustments to reconcile net income to cash from operating activities:
Depreciation & amortization		192.3			184.8
Deferred income taxes & investment tax credits		79.6			27.0
Equity in earnings of unconsolidated affiliates		(37.4	)		(22.9	)
Provision for uncollectible accounts		16.9			16.6
Expense portion of pension & postretirement periodic benefit cost		7.8			9.8
Other non-cash charges - net		25.4			4.8
Changes in working capital accounts:
Accounts receivable & accrued unbilled revenue		(83.0	)		(29.1	)
Inventories		26.4			2.6
Recoverable/refundable fuel & natural gas costs		(26.2	)		(6.3	)
Prepayments & other current assets		9.8			(3.7	)
Accounts payable, including to affiliated companies		65.7			4.9
Accrued liabilities		16.5			4.6
Unconsolidated affiliate dividends		15.5			20.8
Changes in noncurrent assets		19.6			(21.4	)
Changes in noncurrent liabilities		(34.7	)		(37.5	)
Net cash flows from operating activities		423.2			298.1
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Common stock issuance		124.9			-
Long-term debt		171.4			16.4
Stock option exercises		0.8			5.2
Requirements for:
Dividends on common stock		(102.6	)		(96.4	)
Retirement of long-term debt		(104.9	)		(23.9	)
Other financing activities		-			(0.8	)
Net change in short-term borrowings		(37.8	)		92.2
Net cash flows from financing activities		51.8			(7.3	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from:
Unconsolidated affiliate distributions		0.2			12.7
Other collections		6.4			38.0
Requirements for:
Capital expenditures, excluding AFUDC equity		(391.0	)		(334.5	)
Unconsolidated affiliate investments		(0.6	)		(17.5	)
Other investments		(17.4	)		(1.7	)
Net cash flows from investing activities		(402.4	)		(303.0	)
Net change in cash & cash equivalents		72.6			(12.2	)
Cash & cash equivalents at beginning of period		20.6			32.8
Cash & cash equivalents at end of period	$	93.2		$	20.6

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(millions, except per share amounts)
(Unaudited)
	Three Months						Twelve Months
	Ended December 31						Ended December 31
	2008			2007			2008			2007
REPORTED EARNINGS:
Utility Group	$	30.7		$	36.9		$	111.1		$	106.5
Non-utility Group
Energy Marketing and Services		5.6			6.7			18.0			22.3
Coal Mining		(3.0	)		(0.7	)		(4.6	)		2.0
Energy Infrastructure Services		5.9			2.8			11.4			9.4
Other Businesses		(1.7	)		0.1			-			0.3
Commercial Real Estate Impairment Charge		-			-			(5.9	)		-
Total Non-utility Operations		6.8			8.9			18.9			34.0
Corporate and Other		(0.4	)		(0.6	)		(1.0	)		(0.4	)
Sub-Total Operations		37.1			45.2			129.0			140.1
Synfuels-related		-			(5.3	)		-			3.0
Vectren Consolidated	$	37.1		$	39.9		$	129.0		$	143.1

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED GAS DISTRIBUTION
OPERATING STATISTICS
(Unaudited)
	Three Months						Twelve Months
	Ended December 31						Ended December 31
	2008			2007			2008			2007
GAS OPERATING REVENUES (Millions):
Residential	$	295.5		$	259.9		$	958.9		$	851.1
Commercial		114.1			99.2			392.7			339.9
Industrial		18.9			17.8			68.8			64.7
Other Revenue		1.8			2.5			12.3			13.7
	$	430.3		$	379.4		$	1,432.7		$	1,269.4
GAS MARGIN (Millions):
Residential	$	89.5		$	83.6		$	292.2		$	275.1
Commercial		27.7			25.7			92.9			85.8
Industrial		14.2			13.5			52.2			48.7
Other		1.8			1.4			12.3			12.6
	$	133.2		$	124.2		$	449.6		$	422.2
GAS SOLD & TRANSPORTED (MMDth):
Residential		26.5			23.3			79.2			75.0
Commercial		11.7			10.0			35.6			33.4
Industrial		24.0			23.7			91.5			86.2
		62.2			57.0			206.3			194.6
AVERAGE GAS CUSTOMERS
Residential		904,163			904,922			901,131			901,173
Commercial		84,107			84,263			83,940			83,934
Industrial		1,622			1,609			1,614			1,610
		989,892			990,794			986,685			986,717
YTD WEATHER  AS A PERCENT OF NORMAL:
Heating Degree Days (Ohio)		105	%		91	%		102	%		94	%

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED ELECTRIC
OPERATING STATISTICS
(Unaudited)
	Three Months						Twelve Months
	Ended December 31						Ended December 31
	2008			2007			2008			2007
ELECTRIC OPERATING REVENUES (Millions):
Residential	$	37.2		$	37.5		$	171.0		$	161.3
Commercial		30.7			30.6			127.1			115.1
Industrial		33.1			37.0			150.5			142.8
Municipals		-			3.2			1.0			21.4
Other Revenue		2.8			2.6			7.7			8.2
Total Retail		103.8			110.9			457.3			448.8
Net Wholesale Revenues		18.1			15.4			66.9			39.1
	$	121.9		$	126.3		$	524.2		$	487.9
ELECTRIC MARGIN (Millions):
Residential	$	28.8		$	28.3		$	129.0		$	119.6
Commercial		22.0			21.3			89.6			79.0
Industrial		18.4			21.0			82.9			78.3
Municipals		-			0.1			-			7.4
Other		2.7			2.5			7.3			7.9
Total Retail		71.9			73.2			308.8			292.2
Net Wholesale Margin		10.3			7.8			32.5			20.9
	$	82.2		$	81.0		$	341.3		$	313.1
ELECTRICITY SOLD (GWh):
Residential		331.4			340.2			1,513.8			1,630.5
Commercial		323.5			345.0			1,336.7			1,412.4
Industrial		549.6			596.1			2,409.1			2,538.5
Municipals		-			146.8			44.3			616.2
Other Sales - Street Lighting		5.5			4.8			19.5			18.9
Total Retail		1,210.0			1,432.9			5,323.4			6,216.5
Wholesale		401.5			377.2			1,512.9			921.3
		1,611.5			1,810.1			6,836.3			7,137.8
AVERAGE ELECTRIC CUSTOMERS
Residential		122,576			122,412			122,522			122,162
Commercial		18,385			18,465			18,422			18,474
Industrial		103			107			103			109
Other		34			38			34			37
		141,098			141,022			141,081			140,782
YTD WEATHER  AS A PERCENT OF NORMAL:
Cooling Degree Days (Indiana)								100	%		133	%
Heating Degree Days (Indiana)		104	%		89	%		102	%		90	%