Fourth Quarter 2012 Earnings Conference Call March 1, 2013

Transcription

1 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

2 Index 3 Condensed Commentary on Forward-Looking Statements 4 Non-GAAP Financial Information 5 Fourth Quarter 2012 Financial Results; 2013 Guidance 6 Regulated Operational Update 7 Nonregulated Operational Update 8 Diluted Earnings Per Share Adjusted and Weather Impacts 9 Changes in Adjusted Earnings by Segment 10 Capital Expenditures 11 Estimated Utility Depreciation 12 Projected Average Rate Base Financing Summary 14 Guidance 2013 Diluted Earnings Per Share Adjusted Earnings Per Share Adjusted vs Guidance Midpoint 16 Highlights 17 Appendix 18 Economic Drivers in Regulated Utility Service Territories 19 Utility Net Income Adjusted Overage (Shortfall) 20 Fox Energy Center Transaction 21 Regulated Utilities Regulatory Rate Base and Return on Equity 22 Regulated Utilities Statistics 23 Wisconsin Public Service 2012 General Rate Case As Filed 24 Wisconsin Public Service 2012 General Rate Case Settlement Summary 25 Minnesota Energy Resources Rate Case 26 Peoples Gas and North Shore Gas Rate Cases Per January 25, 2013 Filing 27 Peoples Gas and North Shore Gas Rate Cases Summary of Positions 28 State Regulatory Commissions in Jurisdictions Served by Integrys Energy Group 29 Integrys Energy Services Delivered and Estimated Contracted Volumes 30 Integrys Energy Services Margins 31 Integrys Energy Services Volumes, Unit Margins, and Definitions Related to Margin Slide 32 Nonregulated Retail Sales by Market 33 Nonregulated Retail Services Offered 34 Special Items by Segment Adjusted Earnings (Loss) Fourth Quarters 2012 and Special Items by Segment Diluted Earnings Per Share Adjusted Fourth Quarters 2012 and Adjusted Earnings Drivers Regulated Natural Gas Utility Segment Fourth Quarter 2012 vs Adjusted Earnings Drivers Regulated Electric Utility Segment Fourth Quarter 2012 vs Adjusted Earnings Drivers Electric Transmission Investment Segment Fourth Quarter 2012 vs Adjusted Earnings Drivers Nonregulated Integrys Energy Services Segment Fourth Quarter 2012 vs Adjusted Earnings Drivers Holding Company/Other Fourth Quarter 2012 vs Special Items by Segment Adjusted Earnings (Loss) Full Year 2012 and Special Items by Segment Diluted Earnings Per Share Adjusted Full Year 2012 and Adjusted Earnings Drivers Regulated Natural Gas Utility Segment Full Year 2012 vs Adjusted Earnings Drivers Regulated Electric Utility Segment Full Year 2012 vs Adjusted Earnings Drivers Electric Transmission Investment Segment Full Year 2012 vs Adjusted Earnings Drivers Nonregulated Integrys Energy Services Segment Full Year 2012 vs Adjusted Loss Drivers Holding Company/Other Full Year 2012 vs Integrys Credit Ratings 49 Integrys Long-Term Debt Maturities 50 Disclosure of Full Forward-Looking Statements 2 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

3 Condensed Commentary on Forward-Looking Statements In this presentation, Integrys Energy Group and its subsidiaries make statements concerning their expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. These statements are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future results and conditions. Although we believe that these forward-looking statements and the underlying assumptions are reasonable, we cannot provide assurance that such statements will prove correct. Forward-looking statements involve a number of risks and uncertainties. Some risks that could cause actual results to differ materially from those expressed or implied in forward-looking statements include those described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, Other risks and uncertainties are set forth in greater detail in the aforementioned filing with the United States Securities and Exchange Commission, as well as other documents filed with the same from time to time and in Slide 50 in the Appendix. You are encouraged to read and understand the disclaimers set forth in these filings. All forward-looking statements included in this presentation are based upon information presently available, and we, except to the extent required by the federal securities laws, undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. 3 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

4 Non-GAAP Financial Information Non-GAAP Financial Information We prepare financial statements in accordance with accounting principles generally accepted in the United States (GAAP). In addition, we disclose and discuss diluted earnings per share (EPS) adjusted and adjusted earnings (loss), which are non-gaap financial measures. Management uses these measures in its internal performance reporting and for reports to the Board of Directors. We disclose these measures in our quarterly earnings releases, on investor conference calls, and during investor conferences and related events. Management believes that diluted EPS adjusted and adjusted earnings (loss) are useful measures for providing investors with additional insight into our operating performance. These measures allow investors to better compare our financial results from period to period, as they eliminate the effects of certain items that are not comparable. This additional information is not meant to be considered in isolation or as a substitute for our results of operations prepared and presented in conformance with GAAP. Tax impacts are calculated using the applicable combined federal and state statutory rate modified for any attributable permanent tax effect and/or tax credit. A reconciliation of non-gaap information to GAAP information is included on the slide where the information appears. 4 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

5 Fourth Quarter 2012 Financial Results; 2013 Guidance One of the warmest years on record affected consolidated diluted earnings per share adjusted $0.89 for the 3 months ended December 31, 2012 versus $1.00 for the same period in 2011 $3.26 for the full year 2012 versus $3.34 for 2011 Absent weather, our utilities on average earned above their authorized returns Groundwork established for future earnings growth 2013 Guidance: Diluted earnings per share adjusted of $3.05 to $3.55 on a consolidated basis 5 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

6 Regulated Operational Update Regulated Electric Utility Fox Energy Center Weston 3 ReACT Columbia environmental retrofit System Modernization and Reliability Project (SMRP) Regulated Natural Gas Utility Natural gas infrastructure continuing our Accelerated Main Replacement activity in Chicago During 2012, installed miles of main compared with miles installed during 2011 Expect to complete about 140 to 150 miles of main installation in 2013 Introduction of legislation to obtain formula rates in Illinois Rate cases progressing as expected Peoples Gas and North Shore Gas rate cases in progress Wisconsin Public Service 2014 rate case anticipated to be filed on or about April 1, Fourth Quarter 2012 Earnings Conference Call March 1, 2013

7 Nonregulated Operational Update Energy marketing business Chicago municipal aggregation win 5.2 million megawatt-hours annually expected Enrollment complete, serving all enrolled customers by March 1, 2013 Contract term through May 2015, but initial rates fixed through May additional electric opt-out communities signed with Integrys Energy Services during 2012, bringing total to 46 communities and more than 1 million customers being served through Illinois aggregation programs, including Chicago Unit margins continue to be lower than historic levels due to current market conditions Contracted forward volumes are up versus last year Electric up 50%, natural gas up 23%, based upon estimated volumes Legacy asset sales Not part of core business; sales consistent with previously announced strategy Westwood generating unit sale closed on November 20, 2012 Anticipate closing on sale of Beaver Falls and Syracuse generating units in the first quarter 2013 Actively pursuing opportunities to divest of remaining legacy asset 7 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

8 Diluted Earnings Per Share Adjusted and Weather Impacts Diluted Earnings Per Share Information (Non-GAAP Information) Three Months Ended December 31 Year Ended December Diluted EPS $ 0.86 $ 0.49 $ 3.55 $ 2.87 Special Items (net of taxes): Net noncash losses (gains) related to derivative and inventory accounting activities (0.34 ) 0.42 Tax benefit at the regulated utility segments related to health care reform legislation (0.07 ) (0.07 ) (0.05) Discontinued operations (0.01 ) 0.12 Tax expense resulting from Michigan law change 0.05 Impairment losses on property, plant, and equipment Restructuring expense 0.01 Diluted EPS adjusted $ 0.89 $ 1.00 $ 3.26 $ 3.34 Average Shares of Common Stock Diluted (in millions) Weather Impacts (Compared to Normal, Net of Decoupling) Three Months Ended December 31 Year Ended December 31 Dollar Impacts, net of taxes (Millions) Natural Gas Utility Segment $ (4.4) $ (3.2) $ (26.5) (2) $ (0.7) Electric Utility Segment (0.6) (1.2) (2.9) (1.3) Integrys Energy Services Core (0.5) (0.3) (2.7) 0.5 Total $ (5.5) $ (4.7) $ (32.1) $ (1.5) (1) Reflects the $1.0 million after-tax impact of an increase in reserves against regulatory assets at Peoples Gas and North Shore Gas related to permanent decoupling mechanisms. (2) Reflects the $9.9 million after-tax impact of an increase in reserves against regulatory assets at Peoples Gas and North Shore Gas related to permanent decoupling mechanisms. (1) Three Months Ended December 31 Year Ended December 31 Diluted EPS Impacts, net of taxes Natural Gas Utility Segment $ (0.05) $ (0.04) $ (0.33) (2) $ (0.01) Electric Utility Segment (0.01) (0.02) (0.04) (0.02) Integrys Energy Services Core (0.01) (0.03) 0.01 Total $ (0.07) $ (0.06) $ (0.40) $ (0.02) (1) Reflects the $0.01 after-tax impact of an increase in reserves against regulatory assets at Peoples Gas and North Shore Gas related to permanent decoupling mechanisms. (2) Reflects the $0.12 after-tax impact of an increase in reserves against regulatory assets at Peoples Gas and North Shore Gas related to permanent decoupling mechanisms. 8 Fourth Quarter 2012 Earnings Conference Call March 1, 2013 (1)

9 Changes in Adjusted Earnings by Segment (Millions) Fourth Quarter Supporting Detail in Appendix Full Year Supporting Detail in Appendix 2011 Adjusted Earnings $ 79.5 Slide 34 $ Slide 41 Segment Changes Regulated Natural Gas Utility 1.0 Slide 36 (5.0) Slide 43 Regulated Electric Utility (2.2) Slide Slide 44 Electric Transmission Investment 0.4 Slide Slide 45 Nonregulated Integrys Energy Services (5.0) Slide 39 (5.1) Slide 46 Holding Company and Other (3.5) Slide 40 (1.5) Slide 47 Total Segment Changes (9.3) (5.9) 2012 Adjusted Earnings $ 70.2 Slide 34 $ Slide 41 9 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

10 Capital Expenditures Planned Capital Expenditures by Company (Millions) Total Wisconsin Public Service * $ 670 $ 321 $ 284 $ 1,275 Peoples Gas Upper Peninsula Power Minnesota Energy Resources North Shore Gas Michigan Gas Utilities Subtotal for Utilities $ 1,100 $ 652 $ 607 $ 2,359 Integrys Energy Services Integrys Business Support Integrys Transportation Fuels, LLC Total Anticipated Capital Expenditures $ 1,260 $ 812 $ 742 $ 2,814 American Transmission Company (equity contribution) $ 9 $ 5 $ 42 $ 56 * Includes $390 million for Fox Energy Center in Fourth Quarter 2012 Earnings Conference Call March 1, 2013

11 Estimated Utility Depreciation Depreciation by Company (Millions) Total Wisconsin Public Service $ 100 $ 110 $ 123 $ 333 Peoples Gas Upper Peninsula Power Minnesota Energy Resources North Shore Gas Michigan Gas Utilities Total for Utilities $ 236 $ 255 $ 273 $ Fourth Quarter 2012 Earnings Conference Call March 1, 2013

12 Projected Average Rate Base $ in Millions $6,000 $5,459 $5,000 $4,000 $3,000 $4,049 $1,833 $4,547 $303 $1,779 $5,084 $2,370 About 30% Growth $2,479 Projected rate base consists of: Accumulated capital expenditures (+) Accumulated working capital (+) Accumulated net benefit plan additions and other rate base items (+) Accumulated depreciation (-) Accumulated deferred income taxes (-) $4,244 $2,000 $1,000 $2,216 $2,465 $2,714 $2,980 $ Regulated Natural Gas Regulated Electric Fox Energy Center * The $303 is for nine months. 12 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

13 Financing Summary Provide adequate capital levels at a reasonable cost and maintain current credit ratings; see Appendix Slide 48 for credit rating details Transactions completed in 2012 Long-term debt North Shore Gas $28 million, rate 3.43%, maturity 15 years, closed on April 3, 2012 Wisconsin Public Service $300 million, rate 3.671%, maturity 30 years, closed on December 3, 2012 Peoples Gas $100 million, rate 3.98%, maturity 30 years, priced in October 2012 drawn on December 4, 2012 Transactions expected in 2013 Common equity Integrys Energy Group common stock new issuance of about $40 million in 2013 through Stock Investment Plan Long-term debt Wisconsin Public Service approximately $450 million Peoples Gas approximately $200 million North Shore Gas approximately $55 million Hybrid debt securities Integrys Energy Group approximately $400 million 13 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

14 Guidance 2013 Diluted Earnings Per Share Adjusted Diluted EPS Guidance Low Scenario Potential 2013 High Scenario Regulated natural gas utility segment $ 1.00 $ 1.35 Non-GAAP Financial Information Regulated electric utility segment Electric transmission investment segment Integrys Energy Services Core Other (0.02) (0.02) Holding company and other segment (0.19) (0.12) Integrys Energy Group Consolidated Diluted EPS $ 3.03 $ 3.53 Average Shares of Common Stock Diluted (in millions) Information on Special Items: Diluted earnings per share guidance is adjusted for special items and their financial impact on the diluted earnings per share guidance for Note that the consolidated guidance is slightly narrower than the sum of the segments. Given the large segment ranges, we have slightly tempered the consolidated range. Integrys Energy Group Consolidated Diluted EPS $ 3.03 $ 3.53 Special Items (net of taxes) Discontinued operations Integrys Energy Group Consolidated Diluted EPS Adjusted $ 3.05 $ 3.55 Average Shares of Common Stock - Diluted (in millions) Key Assumptions for 2013: Continued operational improvements Availability of generation units Normal weather conditions Not estimating the impact of derivative and inventory fair value accounting activities 14 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

15 2012 Diluted Earnings Per Share Adjusted vs Guidance Midpoint $0.40 Utility Rate ($0.32) 2012 Diluted Increases/ EPS Integrys Energy 2013 Diluted Adjusted Services O&M Other/ EPS Adjusted Reporting Segment Actual Weather Margins Increases Taxes Midpoint $3.26 $3.30 Electric Utility $ 1.30 $ 0.04 $ 0.22 $ (0.20) $ (0.07) $ 1.29 Natural Gas Utility (0.37) (0.16) 1.18 Electric Transmission Investment Holding Company & Other (0.19) 0.04 (0.15) Integrys Energy Services (0.14) (0.03) 0.29 Total $ 3.26 $ 0.40 $ 0.54 $ (0.71) $ (0.19) $ 3.30 Non-GAAP Financial Information 15 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

16 Highlights Execution of our business plan for the regulated utilities remains on track Our 34% ownership in American Transmission Company continues to contribute to earnings Integrys Energy Group consolidated net income expectations: 90% regulated (including earnings from American Transmission Company) and 10% nonregulated (primarily Integrys Energy Services) Our 2013 guidance for diluted earnings per share adjusted on a consolidated basis is in the range of $3.05 to $3.55 Our portfolio of businesses, operational excellence initiatives, and cost control efforts will enable us to meet our 2013 consolidated financial objectives We continue to work toward achievement of a 4% to 6% earnings per share adjusted growth rate on an average annualized basis, with 2011 as the base year, through 2015 Given solid long-term business plan and portfolio of businesses, current dividend rate on common stock is sustainable payout ratio will align with utility industry peers as core earnings grow over time 16 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

17 Appendix 17 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

18 Economic Drivers in Regulated Utility Service Territories Single Family Housing Construction (Year-Over-Year Percent Change) Integrys Energy Group s Regulated Utility Service Area States United States (29.0) (41.0) (25.0) (12.7) (14.3) 26.1 Minnesota (31.0) (39.0) (23.0) (18.6) Wisconsin (17.0) (38.0) (21.0) (28.9) (5.6) 10.2 Illinois (35.0) (52.0) (30.0) (26.3) (15.9) 21.8 Michigan (39.0) (41.0) (29.0) (9.8) (16.2) 22.3 Source: U.S. Census Bureau Preliminary Single Family Housing Construction Improves Year Over Year Unemployment Rates (Percent) for Integrys Energy Group s Regulated Service Area States and Selected Metropolitan Areas Unemployment Rates Decline Year Over Year United States Minnesota Rochester Wisconsin Green Bay Illinois Chicago Michigan Monroe Source: Bureau of Labor Statistics 18 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

19 Utility Net Income Adjusted Overage (Shortfall) (Millions) Natural Gas Utility 2012 Actual 2012 Weather Adjusted Electric Utility Total Natural Gas Utility Electric Utility Total Average Utility Equity $ 1,167.2 $ $ 2,119.8 $ 1,167.2 $ $ 2,119.8 Utility Net Income $ 91.8 $ $ $ $ $ Utility ROE 7.86% 10.84% 10.17% 11.15% Allowed Utility Net Income $ $ 98.1 $ $ $ 98.1 $ Utility Net Income Overage (Shortfall) $ (22.0) $ 5.2 $ (16.8) $ 5.0 $ 8.1 $ Fourth Quarter 2012 Earnings Conference Call March 1, 2013

20 Fox Energy Center Transaction Fox Energy Center Transaction Announced October 1, 2012 Wisconsin Regulatory Approval Received Granted deferral of revenue requirements for all costs above power purchase agreement charges approved in 2013 rate case Granted $440 million earning the weighted average cost of capital with $390 million of plant investment and acquired intangibles (subject to post-closing adjustments, primarily related to working capital) to be amortized over approximately 9 years and a $50 million tolling agreement cancellation payment amortized over 9 years Related revenue requirements to commence in next rate case FERC and Hart Scott Rodino Approval Received Expected Close Date: On or about March 31, Fourth Quarter 2012 Earnings Conference Call March 1, 2013

21 Regulated Utilities Regulatory Rate Base and Return on Equity PGL NSG MERC MGU WPS UPPCO Natural Gas Natural Gas Natural Gas Retail last authorized, IL/MN Rate base/investment ($ millions) 1, Allowed ROE 9.45% 9.45% 9.70% Authorized regulatory equity % 49.00% 50.00% 50.48% Date of decision 1/10/2012 1/10/2012 7/13/2012 Natural Gas Natural Gas Electric Electric Retail last authorized, MI Rate base/investment ($ millions) 190 (1) (2) Allowed ROE 10.75% 14.25% 10.60% 10.20% Authorized regulatory equity % 47.27% (1) 42.40% 56.39% 45.74% Date of decision 12/16/2009 6/7/ /4/ /20/2011 Retail last authorized, WI Rate base/investment ($ millions) 325 1,124 Allowed ROE 10.30% 10.30% Authorized regulatory equity % 51.61% 51.61% Date of decision 12/6/ /6/2012 Wholesale last authorized Rate base/investment ($ millions) 168 (3) 3 (4) Allowed ROE Authorized regulatory equity % Date of decision Notes: (1) The MGU rate case was settled with no stated rate base value. $190 million corresponds to MGU's filed amount with deferred taxes included in the capital structure. Rate base would be $179 million, and the common equity ratio would be 50.26%, with deferred taxes in rate base. (2) The UPPCO rate case was settled with no stated rate base value. $176 million corresponds to UPPCO s filed amount, with deferred taxes included in the capital structure. Rate base would be $146 million, and the common equity ratio would be 54.90%, with deferred taxes in rate base. (3) Service provided under FERC Tariff and Market-Based Rate Contracts, each of which is formula based. (4) Primarily Distribution Service served under the Joint Tariff for the Sales of Ancillary Services ( JAST ). 21 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

22 Regulated Utilities Statistics PGL NSG MERC MGU WPS UPPCO As of Electric Customers 443,000 52,000 Natural Gas Customers 829, , , , ,000 Generation capacity (megawatts) 2, Natural gas storage (billion cubic feet) Employees 1, , For the period ending Annual electric volumes (million megawatt-hours) Annual natural gas throughput (billion cubic feet) Retail as of (Estimated) Natural Gas Natural Gas Natural Gas Natural Gas Natural Gas Electric Electric Rate base/investment ($ millions) - Illinois 1, Rate base/investment ($ millions) - Wisconsin 341 1,225 Rate base/investment ($ millions) - Michigan Rate base/investment ($ millions) - Minnesota 184 Wholesale as of (Estimated) Rate base/investment ($ millions) Fourth Quarter 2012 Earnings Conference Call March 1, 2013

23 Wisconsin Public Service 2012 General Rate Case As Filed Filed on March 30, 2012 for new rates effective January 1, 2013 Requested for Wisconsin jurisdiction: $85.1 million (9.2%) increase in retail electric rates and $12.8 million (3.7%) increase in retail natural gas rates Rate base $1,184 million Wisconsin electric retail and $334 million Wisconsin natural gas retail Return on Equity 10.30% with equity component of 52.37% (major parties agreed that this is a non-contested issue) Reasons for rate increase request: Non-recovery of fixed costs (electric and natural gas) General inflation (electric and natural gas) Increased fuel costs to generate electricity (electric) Increased charges for the electric transmission system (electric) Increased generation maintenance costs (electric) Increased costs to maintain integrity of pipelines (natural gas) Manufactured gas plant clean-up costs (natural gas) Other requests: Permanent decoupling rider Limited reopener for 2014 for: Fuel and related items (electric) Pension and benefits (electric and natural gas) Sales (electric and natural gas) 2012 decoupling results (electric and natural gas) Columbia environmental upgrades (electric) System Modernization Reliability Project (electric) 23 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

24 Wisconsin Public Service 2012 General Rate Case Settlement Summary Date filed: November 1, 2012 Proposal for Wisconsin jurisdiction: $28.5 million (estimated) increase (3.0%) * retail electric rates and $3.4 million (-1.1%) decrease in retail natural gas rates Rate base $1,259 million Wisconsin electric retail and $331 million Wisconsin natural gas retail Return on Equity 10.30% with equity component of 51.61% Major adjustments electric: Sales forecast $(38.8 million) ** Incentive pay $(11.2 million) Cost of fuel $(15.3 million) Uncollectibles $(1.1 million) Major adjustments natural gas: Sales forecast $(4.1 million) ** Incentive pay $(3.5 million) Demand side management $(1.2 million) Labor costs $(1.2 million) Uncollectibles $(1.1 million) Written order received in December 2012 for rates effective January 1, 2013 Website: * Retail electric customer rates will not change in Any difference between final revenue requirement change and final 2012 fuel refund will be deferred for consideration in next general rate case. ** Dollar value as of October 3, 2012 settlement filing. Due to a change in the decoupling mechanism from total rate case margin per customer to total rate case margin, WPS is expected to record its rate case authorized margin revenue on a monthly basis. The current annual caps of $14 million for electric and $8 million for natural gas remain. 24 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

25 Minnesota Energy Resources Rate Case Financial Summary Rate Case filed November 30, 2010 $15.2 million, 5.18%, increase in retail natural gas rates for 2011 Interim rate increase of $7.5 million, 2.6% increase in retail natural gas rates effective February 1, 2011 Rate base $195 million Return on equity 11.25% Equity component 50.20% Other Requests Uncollectibles expense tracking mechanism Revenue stability mechanism Regulatory accounting treatment for the re-measurement of deferred tax balances caused by the enactment of health care reform legislation in 2010 Summary of July 2012 Written Order (Similar to May 2012 Verbal Order) $11 million, 4.3%, increase in retail natural gas rates for 2011 Rate base $190 million Return on equity 9.7% Equity component 50.48% Other Recommendations: Approval of non-weather normalized decoupling plan capping surcharges and credits at 10% Deferral of decision for regulatory accounting treatment for the re-measurement of deferred tax balances caused by the enactment of health care reform legislation in 2010 until Minnesota Energy Resources next rate case Schedule New rates effective January 1, 2013 Website: To the right of Docket Number enter 10 in the Year box and enter 977 in the Number then enter select General Rate Case from the drop down menu for Docket Type and hit Search 25 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

26 Peoples Gas and North Shore Gas Rate Cases Per January 25, 2013 Filing Company surrebuttal filed on January 25, 2013 for new rates effective in July 2013 Peoples Gas Base Rate Revenue Requirement Increase $97.8 million Rate Base/Investment $1,659 million (requesting year end 2013) Return on Equity 10.00% Equity Component Target equity of 50.00% North Shore Gas Base Rate Revenue Requirement Increase $9.6 million Rate Base/Investment $209 million (requesting year end 2013) Return on Equity 10.00% Equity Component Target equity of 50.00% Key Drivers in Both Rate Cases Maintaining and upgrading delivery infrastructure Cost of capital Loss of revenue under existing rates Increased operating costs including administrative and general costs Key Dates Initial/Reply Briefs: March 7, 2013/March 25, 2013 Administrative Law Judge Recommendation: TBD Approximate Date of Final Order: June 23, 2013 Website Rate cases: Peoples North Shore 26 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

27 Peoples Gas and North Shore Gas Rate Cases Summary of Positions Summary of positions after Illinois Commerce Commission Staff, Citizens Utility Board City of Chicago, and the Attorney General as filed on January 16 and 25, 2013: Integrys Illinois Commerce Commission Staff Citizens Utility Board City of Chicago Attorney General Integrys Supplemental Direct Rebuttal Direct * Rebuttal Surrebuttal PEOPLES GAS October 22, 2012 January 16, 2013 November 20, 2012 January 16, 2013 January 25, 2013 Rate Increase $102.7 M $14.9 M $53.6 M $15.4 M $97.8 M Rate Base/Investment $1,600 M $1,267 M $1,454 M $1,368 M $1,659 M Return on Equity 10.75% 9.06% 9.45% 9.45% 10.00% Equity Component ~50% ~50% ~50% ~50% ~50% Rate Base Impacts of Major Adjustments: CapEx Reductions (AMRP, Calumet, other) ($177.9 M) Average Rate Base (instead of year-end) ($105.8 M) ($87.5 M) ($98.9 M) Pension Asset (net of ADIT) ($50.4 M) ($52.6 M) ($50.4 M) Cash Working Capital ($26.4 M) ($26.1 M) Revenue Requirement Impacts of Major Adjustments: Reduction in Rate of Return on Orignal Rate Base ($25.1 M) ($18.2 M) ($19.4 M) Shared Services Allocations ($7.3 M) ($2.5 M) Non Union Wages ($5.8 M) Incentive Compensation -0- ($6.8 M) ($3.0 M) Depreciation Expense Average Rate Base -0- Integrys Illinois Commerce Commission Staff Citizens Utility Board City of Chicago Attorney General Integrys Supplemental Direct Rebuttal Direct * Rebuttal Surrebuttal NORTH SHORE GAS October 22, 2012 January 16, 2013 November 20, 2012 January 16, 2013 January 25, 2013 Rate Increase $12.5 M $4.3 M $7.3 M $2.6 M $9.6 M Rate Base/Investment $212.6 M $200.5 M $204.4 M $199 M $209.1 M Return on Equity 10.75% 9.06% 9.45% 9.45% 10.00% Equity Component ~50% ~50% ~50% ~50% ~50% Rate Base Impacts of Major Adjustments: Average Rate Base (instead of year-end) ($5.3 M) ($5.9 M) ($5.4 M) Cash Working Capital ($2.8 M) ($2.3 M) Pension Asset (net of ADIT) ($0.3 M) ($1.1 M) ($0.3 M) Revenue Requirement Impacts of Major Adjustments: Reduction in Rate of Return on Orignal Rate Base ($3.2 M) ($2.4M) ($2.6 M) Incentive Compensation -0- ($1.0 M) ($0.4 M) Non Union Wages ($0.25 M) Depreciation Expense Average Rate Base -0- Shared Services Allocations -0- * Revenue requirement for Citizens Utility Board City of Chicago rebuttal not available. 27 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

28 State Regulatory Commissions in Jurisdictions Served by Integrys Energy Group Commissioner Term Listing Party Affiliation Appointed By Initial Date Appointed Confirmed Term Expires Of Note Illinois - 5-year terms, party split required, appointment by governor, confirmation by State Senate Doug Scott, Chair Democrat Governor Quinn Yes Miguel Del Valle Democrat Governor Quinn No * Sherina Maye Independent Governor Quinn No * Ann McCabe Republican Governor Quinn Yes John Colgan Democrat Governor Quinn Yes Michigan - Staggered 6-year terms, party split required, appointment by governor, confirmation by State Senate John Quackenbush, Chair Republican Governor Snyder Yes Orjiakor Isiogu Democrat Governor Granholm Yes Greg White Independent Governor Granholm Yes Minnesota - Staggered 6-year terms, party split required, appointment by governor, confirmation by State Senate Beverly Jones Heydinger, Chair Democrat Governor Dayton Yes Administrative Law Judge Dr. David Boyd Republican Governor Pawlenty Yes Served for three years as Chairman of the Commission. Nancy Lange Democrat Governor Dayton No J. Dennis O'Brien Republican Governor Pawlenty Yes Betsy Wergin Republican Governor Pawlenty Yes Wisconsin - Staggered 6-year terms, appointment by governor, confirmation by State Senate Phil Montgomery, Chair Republican Governor Walker Yes Chairman is appointed by the Governor for a two-year term. Eric Callisto Democrat Governor Doyle Yes Served as Chair of the Commission from May 2008 through February Ellen Nowak Republican Governor Walker Yes * To be determined 28 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

29 Integrys Energy Services Delivered and Estimated Contracted Volumes Billion Cubic Feet * 47.3 Retail Natural Gas ** *** *** Contracted Volumes as of December 31 of Preceding year Estimated Delivered Volumes Incremental to Contracted Volumes of Preceding Year Actual 2011 *, Actual 2012 **, and Estimated 2013 *** Delivered Volumes Million Megawatt- Hours Retail Electric * 13.3 ** Contracted Volumes as of December 31 of Preceding year *** *** Estimated Delivered Volumes Incremental to Contracted Volumes of Preceding Year Actual 2011 *, Actual 2012 **, and Estimated 2013 *** Delivered Volumes 29 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

30 Integrys Energy Services Margins ($ in Millions) Three Months Ended December 31 Twelve Months Ended December Change Change Natural Gas Retail Realized margins without lower-of-cost-or-market impact $ 13.9 $ 14.5 $ (0.6) $ 47.5 $ 49.1 $ (1.6) Lower-of-cost-or-market impact on realized margins (0.2) (10.4) (10.7) 15.1 Unrealized loss (13.1) (10.9) (2.2) (1.8) (21.2) (6.8) Wholesale Realized margins without lower-of-cost-or-market impact (2.0) (0.6) 3.9 (4.5) Lower-of-cost-or-market impact on realized margins Unrealized gain (4.0) Total Natural Gas Margins 13.2 (1.8) Electric and Renewable Energy Assets Retail Realized margins (2.0) (7.2) Unrealized gain/(loss) (1.6) (53.9) (26.0) (27.0) Renewable Energy Assets Realized Margins Wholesale Realized margins (0.2) 1.3 (1.5) (0.6) (0.2) (0.4) Unrealized gain/(loss) 0.5 (1.4) (1.2) (0.1) (1.4) 1.4 Total Electric and Rewnewable Energy Assets Margins 27.3 (24.3) Total Gross Margin $ 40.5 $ (26.1) $ 66.6 $ $ $ 89.3 Realized margins without lower-of-cost-or-market impact $ 43.1 $ 48.3 $ (5.2) $ $ $ (10.9) Lower-of-cost-or-market impact on realized margins (0.2) (10.4) (10.7) 15.1 Unrealized gain/(loss) (2.4) (64.0) (45.0) 85.1 Total Gross Margin $ 40.5 $ (26.1) $ 66.6 $ $ $ Fourth Quarter 2012 Earnings Conference Call March 1, 2013

31 Integrys Energy Services Volumes, Unit Margins, and Definitions Related to Margin Slide Physically Settled Volumes Three Months Ended December 31 Twelve Months Ended December Change Change Retail Natural Gas (in billion cubic feet) Realized per unit margins ($ per dekatherm) $ 0.34 $ 0.42 $ (0.08) $ 0.37 $ 0.39 $ (0.02) Retail Electric (in million kilowatt-hours) 3, , , , Realized per unit margins ($ per megawatt-hour) $ 7.48 $ 9.08 $ (1.60) $ 6.84 $ 7.93 $ (1.09) Definitions Realized margins - Represents physical sales, net of physical purchases and the cash settlement of financial contracts (i.e. forwards, futures and swaps). Lower-of-cost-or-market - As required by GAAP, natural gas inventory is to be valued at the lower of acquired price or current market price. In any given period, the margin impact is a function of the current market price relative to the average acquisition price, as well as the reversal of non-cash losses resulting from withdrawals. Unrealized gain/(loss) - Represents the non-cash change in fair value of the portfolio of contracts deemed to be derivative instruments for accounting purposes. In addition to the change in the value of currently outstanding contracts, this amount is impacted when contracts are settled. The value is reversed out of unrealized gain/(loss) and the actual settlement gain/(loss) and the actual settlement amount is reflected in realized margins. Wholesale Gas and Electric - Activity relates to remaining contracts, following the divestiture of these businesses, for which offsetting positions were entered into. Renewable Energy Assets - Represents the portfolio of energy assets owned and/or operated by Integrys Energy Services and is comprised of energy assets with renewable attributes. 31 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

32 Nonregulated Retail Sales by Market New York 8.8% Contracted Volumes as of December 31, 2012 Retail Electric by Region New England 10.9% Michigan/Ohio 7.5% Illinois 57.7% Mid Atlantic 15.1% Illinois Mid Atlantic New York New England Michigan/Ohio Contracted Volumes as of December 31, 2012 Retail Natural Gas by Region Michigan 12.5% Ohio 13.2% Wisconsin 41.8% Mid Atlantic 0.6% Illinois 31.9% Wisconsin Illinois Mid Atlantic Michigan Ohio 32 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

33 Nonregulated Retail Services Offered Wisconsin State GAS Residential and Small Commercial GAS Government Aggregation ELECTRIC Residential and Small Commercial ELECTRIC Government Aggregation GAS Commercial and Industrial ELECTRIC Commercial and Industrial Illinois X X X X X Michigan X X X Ohio X X X X X X New England Connecticut Maine Massachusetts New Hampshire X X Rhode Island Mid-Atlantic Delaware Maryland X X New Jersey X X Pennsylvania Washington DC X X New York X X Minnesota X X X X X X X X 33 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

34 Special Items by Segment Adjusted Earnings (Loss) Fourth Quarters 2012 and 2011 Net income (loss) attributed to common shareholders is adjusted by reportable segment for the financial impact of special items for the quarters ended December 31, 2012 and Integrys Energy Natural Electric Integrys Energy December 31, 2012 Gas Electric Transmission Services Holding Company Group (Millions) Utility Utility Investment Core Other and Other Consolidated Net income (loss) attributed to common shareholders $ 40.0 $ 15.5 $ 12.6 $ 8.2 $ (2.1) $ (6.2) $ 68.0 Special Items (net of taxes) Net noncash losses related to derivative and inventory accounting activities Discontinued operations Adjusted earnings (loss) $ 40.1 $ 15.5 $ 12.6 $ 8.2 $ $ (6.2 ) $ 70.2 Integrys Energy Natural Electric Integrys Energy December 31, 2011 Gas Electric Transmission Services Holding Company Group (Millions) Utility Utility Investment Core Other and Other Consolidated Net income (loss) attributed to common shareholders $ 44.9 $ 17.7 $ 12.2 $ 13.2 $ (47.0) $ (2.3) $ 38.7 Special Items (net of taxes) Net noncash losses related to derivative and inventory accounting activities at Integrys Energy Services Tax benefit related to health care reform legislation (5.8 ) (5.8 ) Discontinued operations (0.3 ) (0.4 ) (0.7 ) Impairment losses on property, plant, and equipment Net gain on disposition related to Integrys Energy Services' strategy change (0.1) (0.1) Adjusted earnings (loss) $ 39.1 $ 17.7 $ 12.2 $ 13.2 $ $ (2.7 ) $ 79.5 Non-GAAP Financial Information 34 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

35 Special Items by Segment Diluted Earnings Per Share Adjusted Fourth Quarters 2012 and 2011 Diluted earnings per share is adjusted by reportable segment for the financial impact of special items on diluted earnings per share for the quarters ended December 31, 2012 and Integrys Energy Electric Holding Integrys Energy Natural Gas Electric Transmission Services Company and Group December 31, 2012 Utility Utility Investment Core Other Other Consolidated Diluted EPS $ 0.51 $ 0.20 $ 0.16 $ 0.10 $ (0.03) $ (0.08) $ 0.86 Special Items (net of taxes) Net noncash losses related to derivative and inventory accounting activities Discontinued operations Diluted EPS adjusted $ 0.51 $ 0.20 $ 0.16 $ 0.10 $ $ (0.08) $ 0.89 Integrys Energy Electric Holding Integrys Energy Natural Gas Electric Transmission Services Company and Group December 31, 2011 Utility Utility Investment Core Other Other Consolidated Diluted EPS $ 0.57 $ 0.23 $ 0.15 $ 0.16 $ (0.59) $ (0.03) $ 0.49 Special Items (net of taxes) Net noncash losses related to derivative and inventory accounting activities at Integrys Energy Services Tax benefit related to health care reform legislation (0.07 ) (0.07 ) Discontinued operations (0.01 ) (0.01 ) Impairment losses on property, plant, and equipment Net gain on disposition related to Integrys Energy Services' strategy change Diluted EPS adjusted $ 0.50 $ 0.23 $ 0.15 $ 0.16 $ $ (0.04 ) $ 1.00 Non-GAAP Financial Information 35 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

36 Adjusted Earnings Drivers Regulated Natural Gas Utility Segment Fourth Quarter 2012 vs $ in millions $1.0 $45 $40 $35 $6.0 ($1.0) ($4.0) $30 $25 $20 $39.1 $40.1 $15 $10 $5 $0 4Q11 Adjusted Earnings A B C 4Q12 Adjusted Earnings A Increase in margins driven by rate orders B Other C Increase in operating expenses driven by an increase in natural gas distribution costs Non-GAAP Financial Information 36 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

37 Adjusted Earnings Drivers Regulated Electric Utility Segment Fourth Quarter 2012 vs $ in millions $24 ($2.2) $22 $20 $18 $16 $2.5 $0.9 ($0.7) ($1.5) ($3.4) $14 $12 $10 $8 $17.7 $15.5 $6 $4 $2 $0 4Q11 Adjusted Earnings A B C D E 4Q12 Adjusted Earnings A Tax rate differences, partially driven by Wisconsin Public Service Corporation s election of a Section 1603 grant in lieu of production tax credits for its Crane Creek wind project B Increase in margins due to the electric rate increase at Upper Peninsula Power Company C Decrease in wholesale margins due to lower sales volumes D Decrease in retail margins due to lower sales volumes, net of decoupling E Decrease in margins due to rate case effects at Wisconsin Public Service Corporation Non-GAAP Financial Information 37 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

38 Adjusted Earnings Drivers Electric Transmission Investment Segment Fourth Quarter 2012 vs $ in millions $14 $0.4 $12 $10 $0.4 $8 $6 $12.2 $12.6 $4 $2 $0 4Q11 Adjusted Earnings A 4Q12 Adjusted Earnings A Increase in earnings from 34% equity ownership in American Transmission Company Non-GAAP Financial Information 38 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

39 Adjusted Earnings Drivers Nonregulated Integrys Energy Services Segment Fourth Quarter 2012 vs $ in millions ($5.0) $16 $15 $14 $1.8 ($1.6) $13 $12 ($2.1) $11 $10 $9 $8 $7 $13.2 ($3.1) $6 $5 $8.2 $4 $3 $2 $1 $0 4Q11 Adjusted Earnings A B C D 4Q12 Adjusted Earnings A Other B Decrease in realized retail margins, driven by continued competitive pressure on per-unit margins, partially offset by higher sales volumes C Decrease in wholesale margins, due to residual contracts related to a portion of the business sold in 2010 D Increase in operating expenses, due in part to an increase in professional fees primarily related to the expansion of the residential and small commercial customer business 39 Fourth Quarter 2012 Earnings Conference Call March 1, 2013 Non-GAAP Financial Information

40 Adjusted Earnings Drivers Holding Company/Other Fourth Quarter 2012 vs $ in millions $0 ($1) ($2.7) ($3.5) ($2) ($3) ($0.7) ($0.7) ($6.2) ($4) ($2.8) ($5) ($6) ($7) 4Q11 Adjusted Loss A B 4Q12 Adjusted Loss A Other B Increase in net loss at Integrys Transportation Fuels, LLC Non-GAAP Financial Information 40 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

41 Special Items by Segment Adjusted Earnings (Loss) Full Year 2012 and 2011 Net income (loss) attributed to common shareholders is adjusted by reportable segment for the financial impact of special items for the years ended December 31, 2012 and Integrys Energy Natural Electric Integrys Energy December 31, 2012 Gas Electric Transmission Services Holding Company Group (Millions) Utility Utility Investment Core Other and Other Consolidated Net income (loss) attributed to common shareholders $ 93.4 $ $ 52.4 $ 25.9 $ 15.2 $ (13.4) $ Special Items (net of taxes) Net noncash gains related to derivative and inventory accounting activities (0.1) (26.7) (26.8) Reversal of tax expense related to health care reform legislation (1.2) (4.7) (5.9) Discontinued operations 11.5 (1.8) 9.7 Adjusted earnings (loss) $ 92.1 $ $ 52.4 $ 25.9 $ $ (15.2 ) $ Natural Electric Integrys Energy Integrys Energy Services December 31, 2011 Gas Electric Transmission Holding Company Group (Millions) Utility Utility Investment Core Other and Other Consolidated Net income (loss) attributed to common shareholders $ $ $ 47.8 $ 31.0 $ (37.1) $ (18.1) $ Special Items (net of taxes) Net noncash losses related to derivative and inventory accounting activities at Integrys Energy Services Tax expense (benefit) related to health care reform legislation (5.4) 1.3 (0.1) (4.2) Discontinued operations (1.0) 0.5 (0.5) Tax expense (benefit) resulting from Michigan law change (0.8) Impairment losses on property, plant, and equipment Restructuring expense Net gain on disposition related to Integrys Energy Services' strategy change (0.2) (0.2) Adjusted earnings (loss) $ 97.1 $ $ 48.0 $ 31.0 $ $ (13.7 ) $ Non-GAAP Financial Information 41 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

42 Special Items by Segment Diluted Earnings Per Share Adjusted Full Year 2012 and 2011 Diluted earnings per share is adjusted by reportable segment for the financial impact of special items on diluted earnings per share for the years ended December 31, 2012 and Integrys Energy Electric Integrys Energy Natural Gas Electric Transmission Services Holding Company Group December 31, 2012 Utility Utility Investment Core Other and Other Consolidated Diluted EPS $ 1.18 $ 1.36 $ 0.66 $ 0.32 $ 0.20 $ (0.17) $ 3.55 Special Items (net of taxes) Net noncash gains related to derivative and inventory accounting activities (0.34) (0.34) Reversal of tax expense related to health care reform legislation (0.01) (0.06) (0.07) Discontinued operations 0.14 (0.02) 0.12 Diluted EPS adjusted $ 1.17 $ 1.30 $ 0.66 $ 0.32 $ $ (0.19) $ 3.26 Integrys Energy Electric Integrys Energy Natural Gas Electric Transmission Services Holding Company Group December 31, 2011 Utility Utility Investment Core Other and Other Consolidated Diluted EPS $ 1.31 $ 1.27 $ 0.60 $ 0.39 $ (0.47) $ (0.23) $ 2.87 Special Items (net of taxes) Net noncash losses related to derivative and inventory accounting activities at Integrys Energy Services Tax expense (benefit) related to health care reform legislation (0.07) 0.02 (0.05) Discontinued operations (0.01) 0.01 Tax expense (benefit) resulting from Michigan law change (0.01) Impairment losses on property, plant, and equipment Restructuring expense Net gain on disposition related to Integrys Energy Services' strategy change Diluted EPS adjusted $ 1.23 $ 1.29 $ 0.60 $ 0.39 $ $ (0.17 ) $ 3.34 Non-GAAP Financial Information 42 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

43 Adjusted Earnings Drivers Regulated Natural Gas Utility Segment Full Year 2012 vs $ in millions $140 ($5.0) $120 $100 $33.7 ($0.6) ($11.9) ($26.2) $80 $60 $40 $97.1 $92.1 $20 $0 Full Year 2011 Adjusted Earnings A B C D Full Year 2012 Adjusted Earnings A Net increase in margins due to rate orders B Other C Increase in operating expenses driven by an increase in natural gas distribution costs D Decrease in sales volumes, primarily driven by warmer weather, net of decoupling Non-GAAP Financial Information 43 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

44 Adjusted Earnings Drivers Regulated Electric Utility Segment Full Year 2012 vs $ in millions $116 $1.3 $114 $112 $110 $2.8 $2.5 ($1.0) ($3.9) $108 $106 $3.1 ($5.7) $104 $3.5 $102 $100 $98 $101.9 $103.2 $96 $94 Full Year 2011 Adjusted Earnings A B C D E F G Full Year 2012 Adjusted Earnings A Decrease in interest expense, driven by the repayment of long-term debt in 2011 B Increase in margins due to the electric rate increase at Upper Peninsula Power Company C Tax rate differences, partially driven by Wisconsin Public Service Corporation s election of a Section 1603 grant in lieu of production tax credits for its Crane Creek wind project D Decrease in operating expenses, driven by a decrease in bad debt expense E Decrease in retail margins due to lower sales volumes, net of decoupling F Decrease in wholesale margins driven by lower sales volumes G Decrease in margins due to rate case effects at Wisconsin Public Service Corporation 44 Fourth Quarter 2012 Earnings Conference Call March 1, 2013 Non-GAAP Financial Information

45 Adjusted Earnings Drivers Electric Transmission Investment Segment Full Year 2012 vs $ in millions $60 $55 $50 $4.4 $4.4 $45 $40 $35 $30 $25 $20 $48.0 $52.4 $15 $10 $5 $0 Full Year 2011 Adjusted Earnings A Full Year 2012 Adjusted Earnings A Increase in earnings from investment Non-GAAP Financial Information 45 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

46 Adjusted Earnings Drivers Nonregulated Integrys Energy Services Segment Full Year 2012 vs $ in millions $40 ($5.1) $35 $2.8 $1.7 $0.8 ($2.2) ($2.9) $30 ($5.3) $25 $20 $15 $31.0 $25.9 $10 $5 $0 Full Year 2011 Adjusted Earnings A B C D E F Full Year 2012 Adjusted Earnings A Tax rate differences, driven by the remeasurement of uncertain tax positions B Increase in realized renewable energy asset margins, driven by continued investments in solar energy projects C Other D Increase in operating expenses, due in part to an increase in professional fees primarily related to the expansion of the residential and small commercial customer business E Decrease in wholesale margins, due to residual contracts related to a portion of the business sold in 2010 F Decrease in realized retail margins, driven by continued competitive pressure on per-unit margins and warmer weather, partially offset by higher sales volumes. Non-GAAP Financial Information 46 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

47 Adjusted Loss Drivers Holding Company/Other Full Year 2012 vs $ in millions ($12) ($13) ($13.7) ($1.5) ($14) $1.3 ($15.2) ($5.3) ($1.5) ($15) ($16) Full Year 2011 Adjusted Loss A Full Year 2012 Adjusted Loss A Other Non-GAAP Financial Information 47 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

48 Integrys Credit Ratings Integrys Energy Group Issuer credit rating Senior unsecured debt Commercial paper Credit facility Junior subordinated notes Wisconsin Public Service Issuer credit rating First mortgage bonds Senior secured debt Preferred stock Commercial paper Credit facility Peoples Gas Issuer credit rating Senior secured debt Commercial paper North Shore Gas Issuer credit rating Senior secured debt Standard & Poor s A- BBB+ A-2 N/A BBB A- N/A A BBB A-2 N/A A- A A-2 A- A Moody s N/A Baa1 P-2 Baa1 Baa2 A2 Aa3 Aa3 Baa1 P-1 A2 A3 A1 P-2 A3 A1 N/A = Not Applicable 48 Fourth Quarter 2012 Earnings Conference Call March 1, 2013

49 Integrys Long-Term Debt Maturities Millions $350 $300 $250 $200 $150 $314 $100 $50 $100 $125 $ Fourth Quarter 2012 Earnings Conference Call March 1, 2013