to a rigorous, well-defined business plan. There’s excellent opportunity for gains as our team grows the earnings of each non-utility company. Within the utility, of course, our managers have done a thorough job of re-examining our mission and re-engineering processes to maximize efficiency, keeping our utility cash flow steady. Finally, we take a thorough approach to shareholder communications. Simply visit our website at www.uil.com for information we update quarterly.

As UIL becomes more diversified, is it also becoming more streamlined?

We really have streamlined our processes and operations while enhancing our environment in recent years. For instance, we are installing new processes at UI that remove obstacles in our information system, allowing customers to access their account information without delays. Our customers consistently want their bills to reflect actual usage. To that end, our automated Network Meter Reading Project virtually eliminates the need for billing estimates. Throughout our non-utility businesses — which depend on high-tech information systems — efficient operations are part of the everyday structure. So I would say, yes, our diversification is taking place in tandem with streamlining.

What are UIL’s main criteria in its own investment strategy?

Long-term success is our compass. However, we’re always seeking new opportunities for acquisition, joint venturing and investment. During the second half of 2000 and throughout 2001, we made investments totaling $180 million. But our criteria remain stringent. Our investments in projects and entrepreneurial ventures are in areas where we have unique access and knowledge. Thorough knowledge, I would say, is one of the overriding essentials behind our 1/4 interest in a new electric transmission cable that will connect Connecticut with Long Island. With APS, we’ve been making small acquisitions with the goal of acquiring new technology — such as the prepaid products we’re rolling out this year. As we grow Xcelecom, we’re using a very structured, disciplined evaluation model. The companies we consider must serve the industrial/commercial markets with a great reputation, and must have a strong customer list that will immediately contribute to our earnings growth. And, of course, their managers must be excited about being part of a larger organization. It’s a pretty tight screen, all in all.

What does a small cap company like UIL have to offer investors in today’s shifting economy?

Well, for one, a healthy dividend, well protected by cash flows. In today’s economy, that’s about as much predictability and stability as you’ll find in your search for steady, long-term returns. For another, we have a management team focused on shareholder value and fully committed