Second Quarter 2013 Earnings Conference Call August 6, 2013

Transcription

1 Second Quarter 2013 Second Quarter 2013 Earnings Conference Call August 6,

2 Index 2 3. Condensed Commentary on Forward-Looking Statements 4. Non-GAAP Financial Information 5. Second Quarter 2013 Financial Results; 2013 Guidance 6. Regulated Operational Update 7. Regulated Operational Update (continued) 8. Regulated Operational Update (continued) 9. Nonregulated Operational Update 10. Diluted Earnings Per Share Adjusted and Weather Impacts 11. Key Variances in Diluted EPS Adjusted by Segment 12. Estimated Capital Expenditures 13. Estimated Utility Depreciation 14. Projected Average Rate Base Financing Summary Diluted Earnings Per Share Adjusted Guidance Presented on August 6, 2013 vs. May 2, Key Investment Highlights 18. APPENDIX 19. Economic Drivers in Regulated Utility Service Territories 20. Regulated Utilities Regulatory Rate Base and Return on Equity 21. Regulated Utilities Statistics 22. Peoples Gas and North Shore Gas Rate Cases Per January 25, 2013 Filing 23. Peoples Gas and North Shore Gas Rate Cases Summary of Positions 24. Wisconsin Public Service 2013 General Rate Case As Filed 25. Wisconsin Rate Case Audit by PSCW 26. Wisconsin Rate Case Audit by PSCW (continued) 27. Michigan Gas Utilities Current General Rate Case As Filed 28. Upper Peninsula Power Current General Rate Case As Filed 29. State Regulatory Commissions in Jurisdictions Served by Integrys Energy Group 30. Integrys Energy Services Delivered and Estimated Contracted Volumes 31. Integrys Energy Services Margins 32. Integrys Energy Services Volumes, Unit Margins, and Definitions Related to Margin Slide 33. Nonregulated Estimated Contracted Retail Volumes by Region 34. Nonregulated Retail Services Offered 35. Special Items by Segment Adjusted Earnings (Loss) Second Quarters 2013 and Special Items by Segment Diluted Earnings Per Share Adjusted Second Quarters 2013 and Adjusted Earnings Drivers Regulated Natural Gas Utility Segment Second Quarter 2013 vs Adjusted Earnings Drivers Regulated Electric Utility Segment Second Quarter 2013 vs Adjusted Earnings Drivers Electric Transmission Investment Segment Second Quarter 2013 vs Adjusted Earnings Drivers Nonregulated Integrys Energy Services Segment Second Quarter 2013 vs Adjusted Earnings Drivers Holding Company/Other Second Quarter 2013 vs Special Items by Segment Adjusted Earnings (Loss) Six Months 2013 and Special Items by Segment Diluted Earnings Per Share Adjusted Six Months 2013 and Adjusted Earnings Drivers Regulated Natural Gas Utility Segment Six Months 2013 vs Adjusted Earnings Drivers Regulated Electric Utility Segment Six Months 2013 vs Adjusted Earnings Drivers Electric Transmission Investment Segment Six Months 2013 vs Adjusted Earnings Drivers Nonregulated Integrys Energy Services Segment Six Months 2013 vs Adjusted Earnings Drivers Holding Company/Other Six Months 2013 vs Integrys Credit Ratings 50. Integrys Long-Term Debt Maturities 51. Disclosure of Full Forward-Looking Statements

3 Condensed Commentary on Forward-Looking Statements In this presentation, we make statements concerning our 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 forwardlooking statements include those described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012, as may be amended or supplemented in Part II, Item 1A of our subsequently filed Quarterly Reports on Form 10-Q. 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 51 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

4 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 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

5 Second Quarter 2013 Financial Results; 2013 Guidance Consolidated diluted earnings per share adjusted of $0.45 for the three months ended June 30, 2013 versus $0.27 for the same period in 2012 Consolidated diluted earnings per share adjusted of $2.20 for the six months ended June 30, 2013 versus $1.83 for the same period in Guidance: Diluted earnings per share adjusted narrowed to $3.35 to $3.60 on a consolidated basis (Millions) Second Quarter Supporting Detail in Appendix Six Months Supporting Detail in Appendix 2012 Adjusted Earnings $ 21.7 Slide 35 $ Slide 42 Segment Changes Regulated Natural Gas Utility 12.9 Slide Slide 44 Regulated Electric Utility 2.8 Slide Slide 45 Electric Transmission Investment 0.5 Slide Slide 46 Nonregulated Integrys Energy Services (4.7) Slide 40 (1.1) Slide 47 Holding Company and Other 2.5 Slide 41 Slide 48 Total Segment Changes Adjusted Earnings $ 35.7 Slide 35 $ Slide 42

6 Regulated Operational Update Regulated Natural Gas Utility The Natural Gas Consumer, Safety & Reliability Act (Illinois Public Act ) signed by Illinois Governor Quinn on July 5 Key provisions: For Peoples Gas only Effective 2014 through 2023 Primarily covers AMRP investment Rate cap cumulative rate increases average 4% annually since last rate case, not to exceed 5.5% in any given year Natural gas infrastructure continuing our Accelerated Main Replacement Program (AMRP) activity in Chicago During 2Q13, installed 36.4 miles of main compared with 50.6 miles installed during 2Q12 Expect to complete about 90 miles of main installation in

7 Regulated Operational Update (continued) Regulated Electric Utility Fox Energy Center now owned and operated Cost deferral for 2013 incremental costs Weston 3 environmental upgrade (ReACT ) Site preparation under way System Modernization and Reliability Project (SMRP) approved Approved by PSCW on July 19, 2013 Construction to begin in 2014, rates included in 2014 test year 7

8 Regulated Operational Update (continued) Rate cases progressing as expected Final order received in the combined Peoples Gas and North Shore Gas rate case on June 18, 2013 (see Slides 22 and 23 for summary details) for new rates effective June 27, 2013 Wisconsin Public Service 2014 rate case filed on March 29, 2013 (see Slides 24, 25, and 26 for summary details) for new rates effective on January 1, 2014 Michigan Gas Utilities 2014 rate case filed on June 7, 2013 to raise retail natural gas base rates by 6.01% (see Slide 27 for summary details) Upper Peninsula Power 2014 rate case filed on June 28, 2013 to raise retail electric base rates by 8.10% (see Slide 28 for summary details) 8

9 Nonregulated Operational Update Energy marketing business Delivered volumes are up compared to the same period last year Electric up 56.9%, natural gas up 73.4% (see Slide 30) Contracted forward volumes are up versus last year Electric up 17%, natural gas up 118% based upon estimated volumes (see Slide 33 for distribution by region) Unit margins continue to be lower than historic levels due to continued competitive pressures Capital usage within the business has been low, driven by low commodity prices and low volatility, which has created better than expected returns 9

10 Diluted Earnings Per Share Adjusted and Weather Impacts Diluted Earnings Per Share Information (Non-GAAP Information) Three Months Ended June 30 Six Months Ended June Diluted EPS $ (0.07) $ 0.62 $ 2.29 $ 1.86 Special Items (net of taxes): Net noncash losses (gains) related to derivative and inventory accounting activities 0.51 (0.38) (0.02) (0.05) Discontinued operations (0.07) 0.02 Diluted EPS adjusted $ 0.45 $ 0.27 $ 2.20 $ 1.83 Average Shares of Common Stock Diluted (in millions) Weather Impacts (Compared to Normal, Net of Decoupling) Three Months Ended June 30 Six Months Ended June 30 Dollar Impacts, net of taxes (Millions) Natural Gas Utility Segment $ 0.1 $ (2.9) $ 0.7 $ (22.3) Electric Utility Segment (2.3) Integrys Energy Services Core (1.8) (0.8) (1.6) (2.2) Out-of-period reserves related to decoupling mechanisms at Peoples Gas and North Shore Gas (1) (7.9) 9.9 (2) Total $ (1.7) $ (11.6) $ 9.0 $ (26.8) (1) (2) Reflects the after-tax impact of reserves related to first quarter 2012 decoupling accruals. Reflects the reversal of the full calendar year 2012 reserves. Three Months Ended June 30 Six Months Ended June 30 Diluted EPS Impacts, net of taxes Natural Gas Utility Segment $ $ (0.04) $ 0.01 $ (0.28) Electric Utility Segment (0.03 ) Integrys Energy Services Core (0.02) (0.01) (0.02) (0.03) Out-of-period reserves related to decoupling mechanisms at Peoples Gas and North Shore Gas (1) (0.10) 0.12 (2) Total $ (0.02) $ (0.15) $ 0.11 $ (0.34 ) 10 (1) (2) Reflects the after-tax impact of reserves related to first quarter 2012 decoupling accruals. Reflects the reversal of the full calendar year 2012 reserves.

11 Key Variances in Diluted EPS Adjusted by Segment Key Variances in Non-GAAP Diluted EPS Adjusted By Segment Three Months Ended June 30, 2013 EPS impacts, net of taxes Natural Gas Utility Electric Utility Electric Transmission Investment Integrys Energy Services Holding Company and Other Integrys Energy Group Consolidated Diluted EPS Adjusted for the three months ended June 30, 2012 $ (0.14) $ 0.26 $ 0.17 $ 0.04 $ (0.06) $ 0.27 Weather impacts, net of decoupling 0.13 * (0.01) 0.12 Utility rate impacts Other utility margin impacts / Nonregulated margins Increase in operating expense (0.16) (0.12) (0.05) (0.01) (0.34) Tax impacts / Other 0.01 (0.03) Diluted EPS Adjusted for the three months ended June 30, 2013 $ 0.02 $ 0.30 $ 0.17 $ (0.01) $ (0.03) $ 0.45 * $0.10 of this amount relates to reserves recorded against decoupling amounts at The People Gas Light and Coke Company and North Shore Gas Company in the second quarter of 2012 related to prior periods Key Variances in Non-GAAP Diluted EPS Adjusted By Segment Six Months Ended June 30, 2013 EPS impacts, net of taxes Natural Gas Utility Electric Utility Electric Transmission Investment Integrys Energy Services Holding Company and Other Integrys Energy Group Consolidated Diluted EPS Adjusted for the six months ended June 30, 2012 $ 0.85 $ 0.57 $ 0.33 $ 0.13 $ (0.05) $ 1.83 Weather impacts, net of decoupling 0.35 * 0.02 (0.00) 0.37 Utility rate impacts Other utility margin impacts / Nonregulated margins Increase in operating expense (0.37) (0.12) (0.09) (0.02) (0.60) Tax impacts / Other (0.03) (0.01) Diluted EPS Adjusted for the six months ended June 30, 2013 $ 1.14 $ 0.66 $ 0.34 $ 0.11 $ (0.05) $ * $0.12 of this amount relates to the reversal of the 2012 decoupling accrual reserve at The People Gas Light and Coke Company and North Shore Gas Company

12 Estimated Capital Expenditures (Dollars in Millions) Total Wisconsin Public Service * $ 674 $ 324 $ 274 $ 1,272 Peoples Gas ,002 Upper Peninsula Power Minnesota Energy Resources North Shore Gas Michigan Gas Utilities Subtotal for Utilities $ 1,104 $ 719 $ 676 $ 2,499 Integrys Energy Services Integrys Business Support Integrys Transportation Fuels (Trillium CNG) Total Anticipated Capital Expenditures $ 1,228 $ 904 $ 812 $ 2,944 American Transmission Company (equity contribution) $ 14 $ 17 $ 17 $ 48 * Includes $392 million for Fox Energy Center in

13 Estimated Utility Depreciation (Dollars in 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 $ 231 $ 253 $ 270 $

14 Projected Average Rate Base $ in Millions $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $4,049 $1,833 $2,216 $4,547 $303 $1,779 $2,465 $4,244 $5,114 $2,370 $2,744 29% Growth $5,473 $2,479 $2,994 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 (-) $ Regulated Natural Gas Regulated Electric Fox Energy Center * The $303 is for nine months. 14

15 Financing Summary Provide adequate capital levels at a reasonable cost and maintain current credit ratings; see Appendix Slide 49 for credit rating details Transactions in 2013 Common equity Integrys Energy Group common stock new issuance of about $55 million through June 30, 2013 raised by our Stock Investment Plan and other stock-based benefit plans with another $20 million expected to be raised during the balance of the year, plus equity issuances for stock option exercise activity. Long-term debt Peoples Gas $50 million, 4.00%, funded April 18, 2013, maturity February 1, 2033 North Shore Gas $54 million, 3.96%, funded May 1, 2013, maturity May 1, 2043 Peoples Gas $220 million, 3.96%, funded August 1, 2013, maturity August 1, 2043 Wisconsin Public Service up to $450 million Hybrid debt securities Integrys Energy Group up to $400 million 15

16 2013 Diluted Earnings Per Share Adjusted Guidance Presented on August 6, 2013 vs. May 2, 2013 Guidance Presented Guidance Presented August 6, 2013 May 2, 2013 Variance Low High Low High Low High Diluted EPS GAAP $0.40 ($0.32) Regulated Natural Gas Utility Segment $ 1.36 $ 1.44 $ 1.20 $ 1.40 $ 0.16 $ 0.04 Regulated Electric Utility Segment Electric Transmission Investment Segment Integrys Energy Services Core $3.26 $3.30 Other (0.02) (0.02) (0.01) (0.01) Holding Company and Other Segment (0.15) (0.09) (0.11) (0.04) (0.04) (0.05) Diluted EPS GAAP * $ 3.41 $ 3.66 $ 3.32 $ 3.67 $ 0.09 $ (0.01) Special items (net of taxes) Discontinued Operations Integrys Energy Services Other Holding Company and Other Segment (0.08) (0.08) (0.08) (0.08) Diluted EPS - Adjusted $ 3.35 $ 3.60 $ 3.25 $ 3.60 $ 0.10 $ Average Shares of Common Stock Diluted (millions) Non-GAAP Financial Information Key Assumptions for 2013: Continued operational improvements Availability of generation units Normal weather conditions for the rest of the year Not estimating the impact of derivative and inventory fair value accounting activities * 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.

17 Key Investment 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: 85% to 90% regulated (including earnings from American Transmission Company) and 10% to 15% nonregulated Our improved 2013 guidance for diluted earnings per share adjusted on a consolidated basis is in the range of $3.35 to $3.60 Our portfolio of businesses, operational excellence initiatives, and cost control efforts will enable us to meet our 2013 consolidated financial objectives We expect long-term growth in diluted EPS adjusted on an average annualized basis of 4% to 6% through 2015 with 2011 as the base year, assuming reasonable rate relief 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 17

18 Appendix 18 Second Quarter 2013 Earnings Conference Call August 6, 2013

19 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 Jan Feb Mar Apr May Jun United States (29.0) (41.0) (25.0) (12.7) (14.3) Minnesota (31.0) (39.0) (23.0) (18.6) Wisconsin (17.0) (38.0) (21.0) (28.9) (5.6) (12.6) (9.9) Illinois (35.0) (52.0) (30.0) (26.3) (15.9) (2.9) Michigan (39.0) (41.0) (29.0) (9.8) (16.2) Source: U.S. Census Bureau Preliminary Unemployment Rates (Percent) for Integrys Energy Group s Regulated Service Area States and Selected Metropolitan Areas Jan Feb Mar Apr May Jun United States Minnesota Rochester Wisconsin Green Bay Illinois Chicago Michigan Monroe Source: Bureau of Labor Statistics Preliminary 19

20 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 9.28% 9.28% 9.70% Authorized regulatory equity % 50.43% 50.32% 50.48% Date of decision 6/18/2013 6/18/2013 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) 374 (3) 1,421 (3) 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 (4) 3 (5) Allowed ROE Authorized regulatory equity % Date of decision 20 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) Wisconsin includes working capital. (4) Service provided under FERC Tariff and Market-Based Rate Contracts, each of which is formula based. (5) Primarily Distribution Service served under the Joint Tariff for the Sales of Ancillary Services ( JAST ).

21 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 376 * 1,372 * Rate base/investment ($ millions) - Michigan Rate base/investment ($ millions) - Minnesota 184 Wholesale as of (Estimated) Rate base/investment ($ millions) * Rate base includes working capital as the Wisconsin Commission handles it differently. 21

22 Peoples Gas and North Shore Gas Rate Cases Per January 25, 2013 Filing Company surrebuttal filed on January 25, 2013 for new rates effective on June 27, 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 (cross bores/chicago Department of Transportation) including administrative and general costs Key Dates Date of Final Order: June 18, 2013 New Rates Effective: June 27, 2013 Website Rate cases: Peoples North Shore 22

23 Peoples Gas and North Shore Gas Rate Cases Summary of Positions Summary of positions after Administrative Law Judges Proposed Order (ALJPO) and Final Order: PEOPLES GAS Integrys ALJPO Final Order Rate Increase $ 97.8 M 52.0 M $ 57.2 M Rate Base/Investment * $ 1,659.3 M 1,463.1 M $ 1,470.2 M Return on Equity 10.00% 9.33% 9.28% Equity Component ~50% ~50% ~50% Revenue Requirement Impacts of Major Adjustments: Rate of Return $ (10.8) M $ (11.6) M Average Rate Base $ (9.9) M $ (9.8) M State Income Tax $ (4.8) M $ (4.8) M Non-Union Payroll $ (5.8) M $ (0.7) M Pension Asset $ (5.2) M $ (5.2) M Plastic Pipe $ (2.0) M $ (2.0) M NORTH SHORE GAS Integrys ALJPO Final Order Rate Increase $ 9.6 M $ 6.1 M $ 6.6 M Rate Base/Investment * $ M $ M $ M Return on Equity 10.00% 9.33% 9.28% Equity Component ~50% ~50% ~50% Revenue Requirement Impacts of Major Adjustments: Rate of Return $ (1.4) M $ (1.4) M Average Rate Base $ (0.7) M $ (0.4) M IBS Expense Allocations $ (0.7) M $ (0.6) M Non-Union Payroll $ (0.4) M $ (0.1) M * ALJPO/Final Order based on average rate base. 23

24 Wisconsin Public Service 2013 General Rate Case As Filed Filed on March 29, 2013 for new rates effective January 1, 2014 Requested for Wisconsin jurisdiction: $71.1 million (7.4%) increase in retail electric rates $19.0 million (5.6%) increase in retail natural gas rates Rate base $1,965 million Wisconsin electric retail and $389 million Wisconsin natural gas retail Return on Equity 10.75% with equity component of 51.11% Reasons for rate increase request: The purchase and operation of the Fox Energy Center (electric) Installation of environmental upgrades at Columbia Plant (electric) Completion of the one-time 2012 fuel refund to customers (electric) Increased transmission costs (electric) Improving reliability by converting electric distribution lines from overhead to underground (electric) Increased costs to inspect natural gas pipelines (natural gas) Decoupling (electric decrease and natural gas increase) General inflation (electric and natural gas) Offset by lower employee benefit costs (electric and natural gas) Key Dates: Intervenor and Commission staff direct testimony: August 29, 2013 Rebuttal testimony: September 16, 2013 Surrebuttal testimony: September 25, 2013 Prehearing testimony: September 26, 2013 Public hearing: September 27, 2013 Website: UR

25 Wisconsin Rate Case Audit by PSCW Natural Gas Filed Revenue Requirement $19.0 million ROE (10.2% vs %) ($1.7 million) * Incentive Pay ($3.3 million) * Retail Sales ($2.5 million) * O&M Adjustments ($3.0 million) generally reflecting cost trends Income Taxes ($1.1 million) driven by ROE and revenue requirement changes Staff Recommendation $7.8 million Additional information WPS filed for 51.11% equity, staff audit reflects 50.14%. Staff did increase rev requirement by $1.2 million for increased manufactured gas plant cleanup to reflect updated costs. Items with * above are likely items of contesting. Other adjustments reflect trend analysis that we do not disagree with. 25

26 Wisconsin Rate Case Audit by PSCW (continued) Electric Retail Filed Revenue Requirement $71.0 million ROE (10.2% vs %) ($7.5 million) * Incentive Pay ($11.0 million) * Non-fuel O&M Adjustment ($3.0 million) generally reflecting cost trends mostly production Distribution, Customer Care ($4.0 million) generally reflecting cost trends distribution Income Taxes ($6.4 million) Driven by ROE and revenue requirement changes Fuel Normal Adjustment ($1.8 million) updated NYMEX prices Fuel Staff Process ($18.0 million) * Adjustments to NYMEX using recent history Retail sales ($9.0 million) * Adjustments to Wisconsin retail sales Rg and small C&I Staff Audit Revenue Requirement $9.3 million Additional information WPS filed for 51.11% equity, staff audit reflects 50.14%. Staff audit reflects several nomination changes for large retail customers going to real-time pricing, firm nominations associated with interruptible service, as well as wholesale customers sales. These updates are appropriate and supported by the company and do have implications to the retail electric rate case. Some of these changes decrease the retail revenue requirement (increase in wholesale firm nominations) and some increase the Wisconsin retail rev requirement (Cp customers going to RTMP). At this time, the net impact to Wisconsin rate case appears to be minimal. We will continue to work in this area to better understand and may have more info prior to analyst day. Items with * above are likely items of contesting. Other adjustments reflect trend analysis that we do not disagree with. 26

27 Michigan Gas Utilities Current General Rate Case As Filed Filed on June 7, 2013 for new rates effective January 2014 Requested: $8 million (6.01%) increase in retail natural gas rates Rate base $210 million natural gas retail Return on Equity 10.75% with equity component of 50.12% Reasons for rate increase request: Cost of upgrades to the Michigan Gas Utilities natural gas transmission and distribution systems A decrease in margin revenues A higher cost of capital Increased costs associated with filling employee vacancies Increased costs associated with building maintenance Cost of engineering analysis on vintage natural gas transmission and distribution mains Increased costs of customer service functions General inflation Key Dates: Interim rates: January 1, 2014 Final order: No later than June 7,

28 Upper Peninsula Power Current General Rate Case As Filed Filed on June 28, 2013 for new rates effective January 2014 Requested: $7.9 million (8.10%) increase in retail electric rates Rate base $217.5 million electric retail (deferred taxes not included) Return on Equity 10.75% with equity component of 54.98% Reasons for rate increase request: Required safety improvements at Victoria and Prickett hydro plants Increased tree trimming Increased costs for uncollectibles Inflation Key Dates: Interim rates: January 1, 2014 Final order: No later than June 28,

29 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 Sally Talberg Independent Governor Snyder No 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 Dr. David Boyd Republican Governor Pawlenty Yes Nancy Lange Democrat Governor Dayton Yes 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 Eric Callisto Democrat Governor Doyle Yes Ellen Nowak Republican Governor Walker Yes

30 Integrys Energy Services Delivered and Estimated Contracted Volumes Billion Cubic Feet Retail Natural Gas 116.5* ** Actual Delivered Volumes through June 30 Estimated Contracted Volumes as of June 30 for Balance of Year Actual 2012 and Estimated 2013 Volumes Incremental to Contracted Volumes as of June 30 Actual 2012* and Estimated 2013** Annual Delivered Volumes Million Megawatt- Hours * Retail Electric ** Actual Delivered Volumes through June 30 Estimated Contracted Volumes as of June 30 for Balance of Year Actual 2012 and Estimated 2013 Volumes Incremental to Contracted Volumes as of June 30 Actual 2012* and Estimated 2013** Annual Delivered Volumes 30

31 Integrys Energy Services Margins (Millions) Three Months Ended June 30 Six Months Ended June Change Change Natural Gas Retail Realized margins without lower-of-cost-or-market impact $ 5.9 $ 5.9 $ - $ 24.8 $ 29.4 $ (4.6) Lower-of-cost-or-market impact on realized margins (1.7) 1.7 (3.4) (1.0) Unrealized gain/(loss) (0.5) 9.1 (9.6) (0.7) Effect of purchase accounting on margins (1.3) - (1.3) (1.3) - (1.3) (14.3) (7.6) Wholesale Realized margins without lower-of-cost-or-market impact (0.1) (1.0) (1.6) 1.7 Unrealized gain/(loss) 0.1 (3.1) 3.2 (4.2) (2.0) (2.2) (0.0) (4.1) 4.1 (4.1) (3.6) (0.5) Total Natural Gas Margins (10.2) (8.1) Electric and Renewable Energy Assets Retail Realized margins Unrealized gain/(loss) (59.7) 40.4 (100.1) 2.2 (1.3) 3.5 (33.1) 62.7 (95.8) Renewable Energy Asset Realized Margins Wholesale Realized margins (0.5) 0.9 Unrealized gain/(loss) (5.0) 0.5 (5.5) (4.2) (0.5) (3.7) (4.6) 0.6 (5.2) (3.8) (1.0) (2.8) Total Electric and Renewable Energy Asset Margins (33.2) 67.7 (100.9) Total Gross Margin $ (30.8) $ 80.3 $ (111.1) $ 84.2 $ 79.8 $ 4.4 Realized margins without lower-of-cost-or-market impact $ 37.3 $ 31.7 $ 5.6 $ 83.3 $ 73.5 $ 9.8 Lower-of-cost-or-market impact on realized margins (1.7) 1.7 (3.4) (1.0) Unrealized gain/(loss) (65.1) 46.9 (112.0) (0.1) 3.0 (3.1) Effect of purchase accounting on margins (1.3) - (1.3) (1.3) - (1.3) Total Gross Margin $ (30.8) $ 80.3 $ (111.1) $ 84.2 $ 79.8 $

32 Integrys Energy Services Volumes, Unit Margins, and Definitions Related to Margin Slide Physically Settled Volumes Three Months Ended June 30 Six Months Ended June Change Change Retail Natural Gas (in billion cubic feet) Realized per unit margins ($ per dekatherm) $ 0.16 $ 0.28 $ (0.12) $ 0.28 $ 0.48 $ (0.20) Retail Electric (in kilowatt hours) 4, , , , , ,154.7 Realized per unit margins ($ per megawatt hour) $ 5.50 $ 7.23 $ (1.73) $ 5.52 $ 6.53 $ (1.01) 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. Effect of purchase accounting on margins Represents the assignment of purchase price related to the contracts acquired via the Compass acquisition. The value of the individual contracts (calculated as of the acquisition date) is amortized through gross margin in the month of settlement. This schedule excludes the amortization of intangibles identified as part of the acquisition (i.e., customer list) which is included in operating expenses. 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. 32

33 Nonregulated Estimated Contracted Retail Volumes by Region Ohio 7.9% Michigan 8.8% Compass (Mid Atlantic and Ohio) 31.7% New England 16.8% Estimated Contracted Volumes as of June 30, 2013 Retail Natural Gas by Region Mid Atlantic 3.8% Illinois 22.1% Estimated Contracted Volumes as of June 30, 2013 Retail Electric by Region Michigan/Ohio 9.9% Illinois 49.1% Wisconsin 25.7% New York 9.1% Mid Atlantic 15.1% 33

34 Nonregulated Retail Services Offered GAS GAS ELECTRIC ELECTRIC GAS ELECTRIC State Residential and Small Commercial Government Aggregation Residential and Small Commercial Government Aggregation Commercial and Industrial Commercial and Industrial Wisconsin X Illinois X X X X X Michigan X X X Indiana XX Kentucky XX Ohio X X X X X 0 New England Connecticut X Maine X Massachusettts X New Hampshire X X Rhode Island X Mid-Atlantic Delaware X Maryland 0 X New Jersey 0 X North Carolina XX Pennsylvania XX 0 South Carolina XX Virginia 0 Washington, D.C. 0 X West Virginia XX New York X X Minnesota 0 34 X Existing Integrys Energy Services' region 0 New offering within last 18 months XX New region associated with Compass acquisition

35 Special Items by Segment Adjusted Earnings (Loss) Second Quarters 2013 and 2012 Net income (loss) attributed to common shareholders is adjusted by reportable segment for the financial impact of special items for the quarters ended June 30, 2013 and Integrys Energy Services June 30, 2013 (Millions) Natural Gas Utility Electric Utility Electric Transmission Investment Core Other Holding Company and Other Integrys Energy Group Consolidated Net income (loss) attributed to common shareholders $ 1.5 $ 23.7 $ 13.6 $ (1.0) $ (40.8) $ (2.4) $ (5.4) Special Items (net of taxes) Net noncash losses related to derivative and inventory accounting activities Discontinued operations Adjusted earnings (loss) $ 1.7 $ 23.7 $ 13.6 $ (1.0) $ $ (2.3) $ 35.7 June 30, 2012 (Millions) Natural Gas Utility Electric Utility Electric Transmission Investment Integrys Energy Services Core Other Holding Company and Other Integrys Energy Group Consolidated Net income (loss) attributed to common shareholders $ (11.2) $ 20.9 $ 13.1 $ 3.7 $ 27.2 $ (4.9) $ 48.8 Special Items (net of taxes) Net noncash gains related to derivative and inventory accounting activities (29.2) (29.2) Discontinued operations Adjusted earnings (loss) $ (11.2) $ 20.9 $ 13.1 $ 3.7 $ $ (4.8) $ 21.7 Non-GAAP Financial Information 35

36 Special Items by Segment Diluted Earnings Per Share Adjusted Second Quarters 2013 and 2012 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 June 30, 2013 and Integrys Energy Services June 30, 2013 Natural Gas Utility Electric Utility Electric Transmission Investment Core Other Holding Company and Other Integrys Energy Group Consolidated Diluted EPS $ 0.02 $ 0.30 $ 0.17 $ (0.01) $ (0.52) $ (0.03) $ (0.07) Special Items (net of taxes) Net noncash losses related to derivative and inventory accounting activities Discontinued operations Diluted EPS adjusted $ 0.02 $ 0.30 $ 0.17 $ (0.01) $ $ (0.03) $ 0.45 June 30, 2012 Natural Gas Utility Electric Utility Electric Transmission Investment Integrys Energy Services Core Other Holding Company and Other Integrys Energy Group Consolidated Diluted EPS $ (0.14) $ 0.26 $ 0.17 $ 0.04 $ 0.35 $ (0.06) $ 0.62 Special Items (net of taxes) Net noncash gains related to derivative and inventory accounting activities (0.38) (0.38) Discontinued operations Diluted EPS adjusted $ (0.14) $ 0.26 $ 0.17 $ 0.04 $ $ (0.06) $ 0.27 Non-GAAP Financial Information 36

37 Adjusted Earnings Drivers Regulated Natural Gas Utility Segment Second Quarter 2013 vs $ in millions $16 $14 $12 $12.9 $0.7 $0.4 $10 $8 $6 $4 $2 $0 $10.5 ($12.8) $1.7 $1.7 ($2) ($4) ($6) ($8) ($10) ($12) ($11.2) 2Q12 Adjusted Loss $14.1 A B C D E 2Q13 Adjusted Earnings A Other utility margin impacts B Weather impacts, net of decoupling ($7.9 million of this amount relates to reserves recorded against decoupling amounts at The Peoples Gas Light and Coke Company and North Shore Gas Company in the second quarter of 2012) C Tax impacts/other D Utility rate impacts E Increase in operating expense 37 Non-GAAP Financial Information

38 Adjusted Earnings Drivers Regulated Electric Utility Segment Second Quarter 2013 vs $ in millions $36 $2.8 $34 $32 $30 $28 $2.8 $0.7 ($0.1) ($9.5) $26 $24 $8.9 $22 $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 $20.9 2Q12 Adjusted Earnings $23.7 A B C D E 2Q13 Adjusted Earnings 38 A Other utility margin impacts B Utility rate impacts C Tax impacts/other D Weather impacts, net of decoupling E Increase in operating expense Non-GAAP Financial Information

39 Adjusted Earnings Drivers Electric Transmission Investment Segment Second Quarter 2013 vs $ in millions $0.5 $14 $12 $10 $0.5 $8 $13.1 $13.6 $6 $4 $2 $0 2Q12 Adjusted Earnings A 2Q13 Adjusted Earnings A Tax impacts/other Non-GAAP Financial Information 39

40 Adjusted Earnings Drivers Nonregulated Integrys Energy Services Segment Second Quarter 2013 vs $ in millions ($4.7) $8 $7 $1.8 ($1.0) $6 $5 $3.5 $4.2 ($2.1) ($3.4) ($3.1) $4 $3 $2 $3.7 $4.4 $1 $9.9 ($3.8) $0 ($1) ($1.0) ($2) 2Q12 Adjusted Earnings A B C D 2Q13 Adjusted Loss A Nonregulated margins B Weather impacts C Tax impacts/other D Increase in operating expense Non-GAAP Financial Information 40

41 Adjusted Earnings Drivers Holding Company/Other Second Quarter 2013 vs $ in millions $0 $2.5 ($1) $0.8 ($2.3) ($2) ($3) ($4.8) $2.7 ($0.7) $0.6 $0.7 ($0.8) ($1.2) ($2.3) ($4) ($1.6) ($5) ($6) 2Q12 Adjusted Loss A B C 2Q13 Adjusted Loss A Tax impacts/other B Nonregulated margins C Increase in operating expense Non-GAAP Financial Information 41

42 Special Items by Segment Adjusted Earnings (Loss) Six Months 2013 and 2012 Net income (loss) attributed to common shareholders is adjusted by reportable segment for the financial impact of special items for the six months ended June 30, 2013 and Integrys Energy Services June 30, 2013 (Millions) Natural Gas Utility Electric Utility Electric Transmission Investment Core Other Holding Company and Other Integrys Energy Group Consolidated Net income attributed to common shareholders $ 91.2 $ 52.3 $ 27.0 $ 8.9 $ 0.7 $ 2.0 $ Special Items (net of taxes) Net noncash losses (gains) related to derivative and inventory accounting activities 0.1 (1.3) (1.2) Discontinued operations 0.6 (5.9) (5.3) Adjusted earnings (loss) $ 91.3 $ 52.3 $ 27.0 $ 8.9 $ $ (3.9) $ June 30, 2012 (Millions) Natural Gas Utility Electric Utility Electric Transmission Investment Integrys Energy Services Core Other Holding Company and Other Integrys Energy Group Consolidated Net income (loss) attributed to common shareholders $ 67.4 $ 45.2 $ 26.4 $ 10.0 $ 0.8 $ (2.1) $ Special Items (net of taxes) Net noncash gains related to derivative and inventory accounting activities (0.1) (3.8) (3.9) Discontinued operations 3.0 (1.8) 1.2 Adjusted earnings (loss) $ 67.3 $ 45.2 $ 26.4 $ 10.0 $ $ (3.9) $ Non-GAAP Financial Information 42

43 Special Items by Segment Diluted Earnings Per Share Adjusted Six Months 2013 and 2012 Diluted earnings per share is adjusted by reportable segment for the financial impact of special items on diluted earnings per share for the six months ended June 30, 2013 and Integrys Energy Services June 30, 2013 Natural Gas Utility Electric Utility Electric Transmission Investment Holding Company and Other Integrys Energy Group Consolidated Diluted EPS $ 1.14 $ 0.66 $ 0.34 $ 0.11 $ 0.01 $ 0.03 $ 2.29 Core Other Special Items (net of taxes) Net noncash gains related to derivative and inventory accounting activities (0.02) (0.02) Discontinued operations 0.01 (0.08 ) (0.07) Diluted EPS adjusted $ 1.14 $ 0.66 $ 0.34 $ 0.11 $ $ (0.05) $ 2.20 June 30, 2012 Natural Gas Utility Electric Utility Electric Transmission Investment Integrys Energy Services Holding Company and Other Integrys Energy Group Consolidated Diluted EPS $ 0.85 $ 0.57 $ 0.33 $ 0.13 $ 0.01 $ (0.03) $ 1.86 Core Other Special Items (net of taxes) Net noncash gains related to derivative and inventory accounting activities (0.05) (0.05) Discontinued operations 0.04 (0.02 ) 0.02 Diluted EPS adjusted $ 0.85 $ 0.57 $ 0.33 $ 0.13 $ $ (0.05) $ 1.83 Non-GAAP Financial Information 43

44 Adjusted Earnings Drivers Regulated Natural Gas Utility Segment Six Months 2013 vs $ in millions $140 $24.0 $120 $100 $25.1 $2.9 ($2.4) ($29.0) $80 $27.4 $60 $40 $67.3 $91.3 $20 $0 Six Months 2012 Adjusted Earnings A B C D E Six Months 2013 Adjusted Earnings A Weather impacts, net of decoupling ($9.9 million of this amount relates to the reversal of the 2012 decoupling accrual reserve at The Peoples Gas Light and Coke Company and North Shore Gas Company) B Other utility margin impacts C Utility rate impacts D Tax impacts/other E Increase in operating expense Non-GAAP Financial Information 44

45 Adjusted Earnings Drivers Regulated Electric Utility Segment Six Months 2013 vs $ in millions $70 $7.1 $60 $5.6 $1.3 ($0.2) ($9.8) $50 $10.2 $40 $52.3 $30 $45.2 $20 $10 $0 Six Months 2012 Adjusted Earnings A B C D E Six Months 2013 Adjusted Earnings A Other utility margin impacts B Utility rate impacts C Weather impacts, net of decoupling D Tax impacts/other E Increase in operating expense Non-GAAP Financial Information 45

46 Adjusted Earnings Drivers Electric Transmission Investment Segment Six Months 2013 vs $ in millions $0.6 $28 $26 $24 $0.6 $22 $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $26.4 $27.0 $0 Six Months 2012 Adjusted Earnings A Six Months 2013 Adjusted Earnings A Tax impacts/other Non-GAAP Financial Information 46

47 Adjusted Earnings Drivers Nonregulated Integrys Energy Services Segment Six Months 2013 vs $ in millions $18 ($1.1) $16 $14 $12 $1.8 $4.4 $4.2 $0.8 ($2.1) $0.7 ($3.1) ($7.0) $10 $4.4 $8 $6 $10.0 $9.9 $8.9 $4 $2 $0 Six Months 2012 Adjusted Earnings A B C D Six Months 2013 Adjusted Earnings A Nonregulated margins B Tax impacts/other C Weather impacts D Increase in operating expense 47 Non-GAAP Financial Information

48 Adjusted Earnings Drivers Holding Company/Other Six Months 2013 vs $ in millions $0 ($1) ($2.7) $0.8 $0.0 ($2) ($3.9) ($0.7) $0.1 ($3.9) ($3) $1.5 ($1.6) ($4) ($5) Six Months 2012 Adjusted Loss A B C Six Months 2013 Adjusted Loss A Tax impacts/other B Nonregulated margins C Increase in operating expense Non-GAAP Financial Information 48

49 Integrys Credit Ratings Integrys Energy Group Issuer credit rating Senior unsecured debt Commercial paper Junior subordinated notes Wisconsin Public Service Issuer credit rating First mortgage bonds Senior secured debt Preferred stock Commercial paper 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 BBB A- N/A A BBB A-2 A- A A-2 A- A Moody s N/A Baa1 P-2 Baa2 A2 Aa3 Aa3 Baa1 P-1 A3 A1 P-2 A3 A1 N/A = Not Applicable 49

50 Integrys Long-Term Debt Maturities Millions $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 $177 * $100 $ * Reflects remainder of 2013; full year total was $

51 Disclosure of Full Forward-Looking Statements In this presentation, we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. These statements are forwardlooking 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, 2012, as may be amended or supplemented in Part II, Item 1A of our subsequently filed Quarterly Reports on Form 10-Q, and those identified below: The timing and resolution of rate cases and related negotiations, including recovery of deferred and current costs and the ability to earn a reasonable return on investment, and other regulatory decisions impacting our regulated businesses; Federal and state legislative and regulatory changes relating to the environment, including climate change and other environmental regulations impacting generation facilities and renewable energy standards; Other federal and state legislative and regulatory changes, including deregulation and restructuring of the electric and natural gas utility industries, financial reform, health care reform, energy efficiency mandates, reliability standards, pipeline integrity and safety standards, and changes in tax and other laws and regulations to which we and our subsidiaries are subject; Costs and effects of litigation and administrative proceedings, settlements, investigations, and claims; Changes in credit ratings and interest rates caused by volatility in the financial markets and actions of rating agencies and their impact on our and our subsidiaries liquidity and financing efforts; The risks associated with changing commodity prices, particularly natural gas and electricity, and the available sources of fuel, natural gas, and purchased power, including their impact on margins, working capital, and liquidity requirements; The timing and outcome of any audits, disputes, and other proceedings related to taxes; The effects, extent, and timing of additional competition or regulation in the markets in which our subsidiaries operate; The ability to retain market-based rate authority; The risk associated with the value of goodwill or other intangible assets and their possible impairment; The investment performance of employee benefit plan assets and related actuarial assumptions, which impact future funding requirements; The impact of unplanned facility outages; Changes in technology, particularly with respect to new, developing, or alternative sources of generation; The effects of political developments, as well as changes in economic conditions and the related impact on customer use, customer growth, and our ability to adequately forecast energy use for our customers; Potential business strategies, including mergers, acquisitions, and construction or disposition of assets or businesses, which cannot be assured to be completed timely or within budgets; The risk of terrorism or cyber security attacks, including the associated costs to protect our assets and respond to such events; The risk of failure to maintain the security of personally identifiable information, including the associated costs to notify affected persons and to mitigate their information security concerns; The effectiveness of risk management strategies, the use of financial and derivative instruments, and the related recovery of these costs from customers in rates; The risk of financial loss, including increases in bad debt expense, associated with the inability of our and our subsidiaries counterparties, affiliates, and customers to meet their obligations; Unusual weather and other natural phenomena, including related economic, operational, and/or other ancillary effects of any such events; The ability to use tax credit and loss carryforwards; The financial performance of American Transmission Company and its corresponding contribution to our earnings; The effect of accounting pronouncements issued periodically by standard-setting bodies; and Other factors discussed in reports we file with the United States Securities and Exchange Commission. Except to the extent required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. 51