TEG TAG Immobilien AG

INTEGRYS ENERGY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended June 30 June 30 (Millions, except per share data) 2007 2006 2007 2006 Nonregulated revenue $1,649.9 $1,125.8 $3,426.7 $2,682.4 Utility revenue 711.8 349.5 1,681.6 788.6 Total revenues 2,361.7 1,475.3 5,108.3 3,471.0 Nonregulated cost of fuel, natural gas, and purchased power 1,650.9 1,072.0 3,314.6 2,543.6 Utility cost of fuel, natural gas, and purchased power 420.2 171.4 1,072.0 440.5 Operating and maintenance expense 251.9 120.4 438.6 238.5 Depreciation and amortization expense 50.6 29.3 90.8 56.5 Taxes other than income taxes 22.0 14.6 43.1 29.2 Operating income (loss) (33.9) 67.6 149.2 162.7 Miscellaneous income 21.6 14.5 33.9 23.2 Interest expense (42.6) (22.4) (79.0) (40.7) Minority interest - 1.2 0.1 2.4 Other expense (21.0) (6.7) (45.0) (15.1) Income (loss) before taxes (54.9) 60.9 104.2 147.6 Provision (benefit) for income taxes (15.3) 19.0 26.6 46.4 Income (loss) from continuing operations (39.6) 41.9 77.6 101.2 Discontinued operations, net of tax 24.0 (6.2) 47.0 (4.6) Income (loss) before preferred stock dividends of subsidiary (15.6) 35.7 124.6 96.6 Preferred stock dividends of subsidiary 0.8 0.8 1.6 1.6 Income (loss) available for common shareholders ($16.4) $34.9 $123.0 $95.0 Average shares of common stock Basic 76.0 42.2 66.8 41.2 Diluted 76.0 42.2 67.1 41.3 Earnings (loss) per common share - - basic Income (loss) from continuing operations ($0.53) $0.97 $1.14 $2.42 Discontinued operations, net of tax $0.31 ($0.14) $0.70 ($0.11) Earnings (loss) per common share -- basic ($0.22) $0.83 $1.84 $2.31 Earnings (loss) per common share - - diluted Income (loss) from continuing operations ($0.53) $0.97 $1.13 $2.41 Discontinued operations, net of tax $0.31 ($0.14) $0.70 ($0.11) Earnings (loss) per common share -- diluted ($0.22) $0.83 $1.83 $2.30 Dividends per common share declared $0.660 $0.565 $1.243 $1.130 INTEGRYS ENERGY GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) June 30 December 31 (Millions) 2007 2006 Assets Cash and cash equivalents $31.7 $23.2 Restricted cash - 22.0 Accounts receivable - net of reserves of $69.9 and $17.0, respectively 1,190.2 1,037.3 Accrued unbilled revenues 208.8 184.8 Inventories 651.7 456.3 Current assets from risk management activities 898.5 1,068.6 Deferred income taxes 13.2 - Assets held for sale 828.4 6.1 Other current assets 129.2 129.1 Current assets 3,951.7 2,927.4 Property, plant, and equipment, net of accumulated depreciation of $2,584.0 and $1,427.8, respectively 4,325.0 2,534.8 Regulatory assets 1,241.2 417.8 Long-term assets from risk management activities 419.5 308.2 Goodwill 946.8 303.9 Pension assets 89.4 - Other 406.8 369.6 Total assets $11,380.4 $6,861.7 Liabilities and Shareholders' Equity Short-term debt $865.6 $722.8 Current portion of long-term debt 54.9 26.5 Accounts payable 1,154.0 949.4 Current liabilities from risk management activities 899.8 1,001.7 Deferred income taxes - 3.1 Liabilities held for sale 46.3 - Other current liabilities 434.6 202.9 Current liabilities 3,455.2 2,906.4 Long-term debt 2,142.7 1,287.2 Deferred income taxes 536.6 97.6 Deferred investment tax credits 38.9 13.6 Regulatory liabilities 304.3 301.7 Environmental remediation liabilities 637.3 95.8 Pension and postretirement benefit obligations 384.6 188.6 Long-term liabilities from risk management activities 367.9 264.7 Asset retirement obligations 136.7 10.1 Other 153.1 111.3 Long-term liabilities 4,702.1 2,370.6 Commitments and contingencies Preferred stock of subsidiary with no mandatory redemption 51.1 51.1 Common stock equity 3,172.0 1,533.6 Total liabilities and shareholders' equity $11,380.4 $6,861.7 INTEGRYS ENERGY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended (Millions) June 30 2007 2006 Operating Activities Net income before preferred stock dividends of subsidiary $124.6 $96.6 Adjustments to reconcile net income to net cash provided by operating activities Discontinued operations, net of tax (47.0) 4.6 Depreciation and amortization 90.8 56.5 Recovery of Kewaunee outage expenses 5.1 6.3 Refund of non-qualified decommissioning trust (27.3) (30.0) Recoveries and refunds of other regulatory assets and liabilities 17.9 13.0 Unrealized gains on nonregulated energy contracts (6.7) (33.0) Pension and postretirement expense 35.4 25.7 Pension and postretirement funding (4.4) (2.7) Deferred income taxes and investment tax credit 18.2 8.0 Gains due to settlement of contracts pursuant to the merger with PEC (4.0) - Gain on the sale of interest in Guardian Pipeline, LLC - (6.2) Gain on the sale of WPS ESI Gas Storage. LLC - (9.0) Gain on the sale of partial interest in synthetic fuel operation (1.4) (3.5) Equity income, net of dividends 1.6 5.8 Other (2.6) 15.4 Changes in working capital Receivables, net 548.5 375.6 Inventories (57.2) (168.1) Other current assets 62.6 3.0 Accounts payable (249.0) (384.7) Other current liabilities (154.5) (1.1) Net cash provided by (used for) operating activities 350.6 (27.8) Investing Activities Capital expenditures (155.0) (153.6) Proceeds from the sale of property, plant and equipment 2.3 2.4 Purchase of equity investments and other acquisitions (34.9) (41.5) Proceeds on the sale of interest in Guardian Pipeline, LLC - 38.5 Proceeds on the sale of WPS ESI Gas Storage, LLC - 19.9 Cash paid for transaction costs pursuant to the merger with PEC (13.8) - Acquisition of natural gas operations in Michigan and Minnesota, net of liabilities assumed 1.7 (317.9) Restricted cash for repayment of long-term debt 22.0 - Restricted cash for acquisition - (333.3) Transmission interconnection (23.9) (1.8) Other 6.4 2.1 Net cash used for investing activities (195.2) (785.2) Financing Activities Short-term debt, net (66.3) 738.0 Gas loans, net (7.5) (43.1) Repayment of long-term debt (25.0) (1.4) Payment of dividends Preferred stock (1.6) (1.6) Common stock (76.9) (46.7) Issuance of common stock 25.2 151.9 Other 2.1 0.3 Net cash provided by (used for) financing activities (150.0) 797.4 Change in cash and cash equivalents - continuing operations 5.4 (15.6) Change in cash and cash equivalents - discontinued operations Net cash provided by operating activities 40.1 23.1 Net cash provided by (used for) investing activities (37.0) (17.7) Change in cash and cash equivalents 8.5 (10.2) Cash and cash equivalents at beginning of period 23.2 27.7 Cash and cash equivalents at end of period $31.7 $17.5 Diluted Earnings Per Share Information - Non-GAAP Financial Information Non-GAAP Financial Information Integrys Energy Group prepares financial statements in accordance with accounting principles generally accepted in the United States (GAAP). Along with this information, we disclose and discuss diluted earnings per share (EPS) from continuing operations - adjusted, which is a non-GAAP measure. Management uses the measure in its internal performance reporting and for reports to the Board of Directors. We disclose this measure in our quarterly earnings releases, on investor conference calls, and during investor conferences and related events. Management believes that diluted EPS from continuing operations - adjusted is a useful measure for providing investors with additional insight into our operating performance because it eliminates the effects of certain items that are not comparable from one period to the next. Therefore, this measure allows investors to better compare our financial results from period to period. The presentation of 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. Actual Quarter and Year-to-Date for Periods Ended June 30, 2007 and 2006 Three Months Ended Six Months Ended June 30 June 30 2007 2006 2007 2006 Diluted EPS from continuing operations $(0.53) $0.97 $1.13 $2.41 Diluted EPS from discontinued operations 0.31 (0.14) 0.70 (0.11) Total Diluted EPS $(0.22) $0.83 $1.83 $2.30 Average Shares of Common Stock - Diluted 76.0 42.2 67.1 41.3 Information on Special Items: Diluted earnings per share from continuing operations, as adjusted for special items and their financial impact on diluted earnings per share from continuing operations for the three and six months ended June 30, 2007 and 2006 are as follows: Diluted EPS from continuing operations $(0.53) $0.97 $1.13 $2.41 Adjustments (net of taxes): Asset sales (gains)/losses 0.00 (0.22) 0.00 (0.22) External transition costs related to MGUC and MERC acquisitions 0.00 0.06 0.01 0.12 Integrys Energy Services power contract in Maine liquidated in 2005 0.00 0.02 0.00 0.05 External transition costs related to Peoples Energy merger 0.02 0.00 0.03 0.00 Impacts of purchase accounting adjustments due to Peoples Energy merger 0.04 0.00 0.07 0.00 Synfuel - realized and unrealized oil option gains, tax credits, production costs, premium amortization, deferred gain recognition, and royalties 0.20 (0.20) (0.06) (0.44) Diluted EPS from continuing operations - adjusted $(0.27) $0.63 $1.18 $1.92 Weather impact - regulated utilities (as compared to normal) Electric impact - favorable/(unfavorable) $0.01 $(0.04) $0.00 $(0.07) Natural gas impact - favorable/(unfavorable) (0.02) (0.04) (0.09) (0.09) Total weather impact $(0.01) $(0.08) $(0.09) $(0.16) Diluted Earnings Per Share Information - Non-GAAP Financial Information Actual 2006 with 2007 and 2008 Potential 2007 Potential 2008 Forecasts Diluted Diluted EPS Ranges EPS Ranges Actual Low High Low High 2006 Scenario Scenario Scenario Scenario Diluted EPS from continuing operations $3.50 $2.49 $2.59 $3.67 $3.89 Diluted EPS from discontinued operations 0.17 1.04 1.39 - - Total Diluted EPS $3.67 $3.53 $3.98 $3.67 $3.89 Average Shares of Common Stock - Diluted 42.4 71.8 71.8 76.7 76.7 Information on Special Items: Diluted earnings per share from continuing operations, as adjusted for special items and their financial impact on the actual 2006 diluted earnings per share from continuing operations and the 2007 and 2008 diluted earnings per share from continuing operations guidance are as follows: Diluted EPS from continuing operations $3.50 $2.49 $2.59 $3.67 $3.89 Adjustments (net of taxes): Asset sales (gains)/losses (0.22) (0.01) (0.01) - - External transition costs related to MGUC and MERC acquisitions 0.27 - - - - Integrys Energy Services power contract in Maine liquidated in 0.09 0.01 0.01 - - 2005 External transition costs related to Peoples Energy merger 0.03 0.26 0.26 0.16 0.16 Impacts of purchase accounting adjustments due to Peoples Energy merger 0.00 0.13 0.13 0.08 0.08 Synfuel - realized and unrealized oil option gains, tax credits, production costs, premium amortization, deferred gain recognition, and royalties (0.47) (0.28) (0.28) - - Diluted EPS from continuing operations - adjusted $3.20 $2.60 $2.70 $3.91 $4.13 Weather impact - regulated utilities (as compared to normal) Electric impact - favorable/(unfavorable) $(0.05) $ - $ - $ - $ - Natural gas impact - favorable/(unfavorable) (0.13) (0.08) (0.08) Total weather impact $(0.18) $(0.08) $(0.08) $ - $ - Integrys Energy Group Supplemental Quarterly Financial Highlights (millions, except per share amounts and Integrys Energy Services natural gas sales volumes) 2006 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Ended Regulated Electric Utility Segment Revenues $256.4 $262.4 $315.0 $265.6 $1,099.4 year-over-year change 5.1% 9.2% 5.5% 4.4% 6.0% Fuel and purchased power costs 125.7 118.8 163.5 143.0 551.0 Margins 130.7 143.6 151.5 122.6 548.4 year-over-year change -20.0% -10.8% 2.0% 2.2% -7.5% margins/revenues 51.0% 54.7% 48.1% 46.2% 49.9% Operating and maintenance expense(2) 69.8 69.8 63.4 62.3 265.3 Depreciation and amortization 19.2 19.6 19.7 20.0 78.5 Taxes other than income 10.5 10.3 10.2 10.6 41.6 Operating Income 31.2 43.9 58.2 29.7 163.0 year-over-year change -24.5% N/M(1) 17.8% N/M(1) 107.1% Income available for common shareholders $15.5 $23.4 $31.0 $15.6 $85.5 Sales in kilowatt-hours 3,829.3 3,777.0 4,221.5 4,097.5 15,925.3 year-over-year change 4.0% -0.7% 0.3% 3.2% 1.7% Residential 793.6 697.9 847.9 805.4 3,144.8 Commercial and industrial 2,085.7 2,065.5 2,291.1 2,202.9 8,645.2 Resale 938.3 1,005.1 1,073.0 1,076.7 4,093.1 Other 11.7 8.5 9.5 12.5 42.2 Notes: (1) Not meaningful (2) External costs to achieve allocated (related to the merger with PEC) N/A N/A N/A N/A N/A Regulated Natural Gas Utility Segment Revenues $193.0 $95.6 $91.1 $297.2 $676.9 year-over-year change 10.5% 6.5% 26.9% 60.0% 29.7% Purchased gas costs 148.2 62.0 58.1 225.5 493.8 Margins 44.8 33.6 33.0 71.7 183.1 year-over-year change -3.2% 42.4% 71.9% 102.0% 47.0% margins/revenues 23.2% 35.1% 36.2% 24.1% 27.0% Operating and maintenance expense(3)(4) 24.0 31.5 30.2 35.6 121.3 Depreciation and amortization 5.5 7.5 9.8 9.9 32.7 Taxes other than income 1.7 2.7 4.1 3.3 11.8 Operating Income 13.6 (8.1) (11.1) 22.9 17.3 year-over-year change -44.5% N/M(1) 184.6% 133.7% -41.9% Income available for common shareholders $6.7 $(7.5) $(11.0) $9.5 $(2.3) Total throughput in therms(5)(6) 266.9 194.9 275.0 530.5 1,267.3 year-over-year change -13.5% 19.9% 113.8% 133.3% 53.2% Residential(5)(6) 97.8 47.6 32.8 173.3 351.5 Commercial and industrial(5)(6) 58.5 21.5 22.8 87.8 190.6 Interruptible(5)(6) 6.3 7.0 7.5 19.3 40.1 Interdepartmental(5)(6) 4.5 4.4 8.9 9.8 27.6 Transport(5),(6) 99.8 114.4 203.0 240.3 657.5 Notes: (3) External transition costs associated with the integration of MGUC and MERC $4.1 $4.1 $2.3 $1.3 $11.8 (4) External costs to achieve allocated (related to the merger with PEC) N/A N/A N/A N/A N/A (5) Throughput in therms related to MGUC and MERC Residential N/A 17.6 17.8 99.1 134.5 Commercial and industrial N/A 7.8 10.8 47.5 66.1 Interruptible N/A - 2.9 12.7 15.6 Transport N/A 40.7 135.1 149.4 325.2 Total N/A 66.1 166.6 308.7 541.4 (6) Throughput in therms related to Peoples Gas and North Shore Gas Residential N/A N/A N/A N/A N/A Commercial and industrial N/A N/A N/A N/A N/A Interruptible N/A N/A N/A N/A N/A Transport N/A N/A N/A N/A N/A Total N/A N/A N/A N/A N/A Integrys Energy Group Supplemental Quarterly Financial Highlights (millions, except per share amounts and Integrys Energy Services natural gas sales volumes) 2007 1st Qtr 2nd Qtr YTD Regulated Electric Utility Segment Revenues $299.2 $305.2 $604.4 year-over-year change 16.7% 16.3% 16.5% Fuel and purchased power costs 150.3 160.4 310.7 Margins $148.9 $144.8 $293.7 year-over-year change 13.9% 0.8% 7.1% margins/revenues 49.8% 47.4% 48.6% Operating and maintenance expense(2) 83.9 83.5 167.4 Depreciation and amortization 20.2 20.4 40.6 Taxes other than income 10.9 10.7 21.6 Operating Income 33.9 30.2 64.1 year-over-year change 8.7% -31.2% -14.6% Income available for common shareholders $16.5 $15.0 31.5 Sales in kilowatt-hours 3,935.5 3,908.3 7,843.8 year-over-year change 2.8% 3.5% 3.1% Residential 838.6 723.5 1,562.1 Commercial and industrial 2,103.2 2,162.5 4,265.7 Resale 981.7 1,013.8 1,995.5 Other 12.0 8.5 20.5 Notes: (1) Not meaningful (2) External costs to achieve allocated (related to the merger with PEC) $4.8 $0.8 $5.6 Regulated Natural Gas Utility Segment Revenues $681.8 $417.8 $1,099.6 year-over-year change 253.3% 337.0% 281.0% Purchased gas costs 509.9 $273.2 $783.1 Margins 171.9 144.6 316.5 year-over-year change 283.7% 330.4% 303.7% margins/revenues 25.2% 34.6% 28.8% Operating and maintenance expense(3),(4) 75.9 114.9 190.8 Depreciation and amortization 16.7 26.8 43.5 Taxes other than income 6.6 8.6 15.2 Operating Income 72.7 (5.7) 67.0 year-over-year change 434.6% -29.6% 1118.2% Income available for common shareholders $35.2 $(4.0) $31.2 Total throughput in therms(5)(6) 1,014.7 637.1 1,651.8 year-over-year change 280.2% 226.9% 257.7% Residential(5)(6) 437.7 213.1 650.8 Commercial and industrial(5)(6) 177.1 66.0 243.1 Interruptible(5)(6) 23.7 8.2 31.9 Interdepartmental(5)(6) 5.0 9.7 14.7 Transport(5)(6) 371.2 340.1 711.3 Notes: (3) External transition costs associated with the integration of MGUC and MERC $0.5 $ - $0.5 (4) External costs to achieve allocated (related to the merger with PEC) $2.0 $0.4 $2.4 (5) Throughput in therms related to MGUC and MERC Residential 161.3 28.5 189.8 Commercial and industrial 82.9 16.5 99.4 Interruptible 17.5 3.6 21.1 Transport 147.8 111.2 259.0 Total 409.5 159.8 569.3 (6) Throughput in therms related to Peoples Gas and North Shore Gas Residential 164.2 151.4 315.6 Commercial and industrial 32.9 31.2 64.1 Interruptible - - - Transport 116.5 152.9 269.4 Total 313.6 335.5 649.1 Integrys Energy Group Supplemental Quarterly Financial Highlights (millions, except per share amounts and Integrys Energy Services natural gas sales volumes) 2006 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Ended Nonregulated Segment - Integrys Energy Services Nonregulated revenues $1,557.8 $1,130.4 $1,160.9 $1,310.0 $5,159.1 year-over-year change 48.5% 14.0% -14.6% -31.6% -2.9% Nonregulated cost of fuel, natural gas, and purchased power 1,478.4 1,076.1 1,139.1 1,284.4 4,978.0 Margins 79.4 54.3 21.8 25.6 181.1 year-over-year change 90.4% 67.6% -53.2% -45.9% 7.8% Margins/Revenues 5.1% 4.8% 1.9% 2.0% 3.5% Margin Detail: - Electric and other margin 41.1 40.1 (9.4) (11.3) 60.5 - Natural gas margin 38.3 14.2 31.2 36.9 120.6 Margins 79.4 54.3 21.8 25.6 181.1 Operating and maintenance expense(7) 20.5 16.6 17.0 27.4 81.5 Depreciation and amortization 2.4 2.3 2.3 2.4 9.4 Taxes other than income 2.3 1.4 1.4 2.1 7.2 Operating Income 54.2 34.0 1.1 (6.3) 83.0 year-over-year change 180.8% 365.8% -94.4% N/M(1) 32.8% Income available for common shareholders $37.1 $13.4 $21.1 $0.7 $72.3 Gross Volumes (includes transactions both physically and financially settled)(8) - Wholesale electric sales volumes in kilowatt-hours 13,345.7 12,206.6 15,476.7 17,765.9 58,794.9 - Retail electric sales volumes in kilowatt-hours 1,139.1 1,304.8 1,989.7 2,120.5 6,554.1 - Wholesale natural gas sales volumes in billion cubic feet 106.4 87.7 100.7 107.4 402.2 - Retail natural gas sales volumes in billion cubic feet 73.7 78.4 76.7 85.7 314.5 Physical Volumes (includes only transactions settled physically)(8) - Wholesale electric sales volumes in kilowatt-hours 264.7 200.2 207.7 295.6 968.2 - Retail electric sales volumes in kilowatt-hours 931.6 1,035.2 1,266.0 1,332.8 4,565.6 - Wholesale natural gas sales volumes in billion cubic feet 100.9 81.9 95.9 94.8 373.5 - Retail natural gas sales volumes in billion cubic feet 69.5 61.8 61.2 71.5 264.0 Notes: (7)External costs to achieve allocated (related to the merger with PEC) N/A N/A N/A N/A N/A (8)Gross Volumes from nonregulated marketing operations of Peoples Energy - Wholesale electric sales volumes in kilowatt-hours N/A N/A N/A N/A N/A - Retail electric sales volumes in kilowatt-hours N/A N/A N/A N/A N/A - Wholesale natural gas sales volumes in billion cubic feet N/A N/A N/A N/A N/A - Retail natural gas sales volumes in billion cubic feet N/A N/A N/A N/A N/A (8)Physical Volumes from nonregulated marketing operations of Peoples Energy - Wholesale electric sales volumes in kilowatt-hours N/A N/A N/A N/A N/A - Retail electric sales volumes in kilowatt-hours N/A N/A N/A N/A N/A - Wholesale natural gas sales volumes in billion cubic feet N/A N/A N/A N/A N/A - Retail natural gas sales volumes in billion cubic feet N/A N/A N/A N/A N/A Nonregulated Segment - Holding Company and Other American Transmission Company (ATC) Equity contributions to ATC related to the Wausau, WI to Duluth MN, transmission line $16.1 $6.3 $- $- $22.4 Other equity contributions to ATC 4.5 4.7 4.9 - 14.1 Percent ownership interest in ATC 32.8% 32.7% 31.6% 30.7% 30.7% After-tax equity earnings recognized from the investment in ATC 5.3 5.9 6.1 6.1 23.4 Income available for common shareholders(9) $0.8 $5.6 $(1.6) $(4.5) $0.3 (9)External costs to achieve allocated (related to the merger with PEC) N/A N/A $0.5 $1.6 N/A Integrys Energy Group Supplemental Quarterly Financial Highlights (millions, except per share amounts and Integrys Energy Services natural gas sales volumes) 2007 1st Qtr 2nd Qtr YTD Nonregulated Segment - Integrys Energy Services Nonregulated revenues $1,775.4 $1,648.4 $3,423.8 year-over-year change 14.0% 45.8% 27.4% Nonregulated cost of fuel, natural gas, and purchased power 1,666.7 1,649.9 3,316.6 Margins 108.7 (1.5) 107.2 year-over-year change 36.9% -102.8% -19.8% Margins/Revenues 6.1% -0.1% 3.1% Margin Detail: - Electric and other margin 72.3 (20.1) 52.2 - Natural gas margin 36.4 18.6 55.0 Margins 108.7 (1.5) 107.2 Operating and maintenance expense(7) 31.6 44.3 75.9 Depreciation and amortization 2.8 2.8 5.6 Taxes other than income 2.7 1.7 4.4 Operating Income 71.6 (50.3) 21.3 year-over-year change 32.1% -247.9% -75.9% Income available for common shareholders $79.7 $(44.0) $35.7 Gross Volumes (includes transactions both physically and financially settled)(8) - Wholesale electric sales volumes in kilowatt-hours 26,070.7 29,412.1 55,482.8 - Retail electric sales volumes in kilowatt-hours 2,487.0 3,467.5 5,954.5 - Wholesale natural gas sales volumes in billion cubic feet 112.3 112.4 224.7 - Retail natural gas sales volumes in billion cubic feet 111.9 87.4 199.3 Physical Volumes (includes only transactions settled physically)(8) - Wholesale electric sales volumes in kilowatt-hours 715.4 607.9 1,323.3 - Retail electric sales volumes in kilowatt-hours 2,439.4 3,419.8 5,859.2 - Wholesale natural gas sales volumes in billion cubic feet 97.9 105.5 203.4 - Retail natural gas sales volumes in billion cubic feet 91.5 73.5 165.0 Notes: (7)External costs to achieve allocated (related to the merger with PEC) $2.0 $1.2 $3.2 (8)Gross Volumes from nonregulated marketing operations of Peoples Energy - Wholesale electric sales volumes in kilowatt-hours - - - - Retail electric sales volumes in kilowatt-hours 507.6 1,366.1 1,873.7 - Wholesale natural gas sales volumes in billion cubic feet 5.1 11.3 16.4 - Retail natural gas sales volumes in billion cubic feet 6.8 7.9 14.7 (8)Physical Volumes from nonregulated marketing operations of Peoples Energy - Wholesale electric sales volumes in kilowatt-hours - - - - Retail electric sales volumes in kilowatt-hours 507.6 1,366.1 1,873.7 - Wholesale natural gas sales volumes in billion cubic feet 4.9 11.2 16.1 - Retail natural gas sales volumes in billion cubic feet 6.8 7.9 14.7 Nonregulated Segment - Holding Company and Other American Transmission Company (ATC) Equity contributions to ATC related to the Wausau, WI to Duluth MN, transmission line $12.0 $12.9 $24.9 Other equity contributions to ATC - - - Percent ownership interest in ATC 31.3% 32.4% 32.4% After-tax equity earnings recognized from the investment in ATC 7.1 7.2 14.3 Income available for common shareholders(9) $- $(6.2) $(6.2) (9)External costs to achieve allocated (related to the merger with PEC) $(7.8) $- $(7.8) Integrys Energy Group Supplemental Quarterly Financial Highlights (millions, except per share amounts and Integrys Energy Services natural gas sales volumes) 2006 Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Ended Other information: Heating and Cooling Degree Days - WPSC Heating Degree Days - Actual 3,322 779 244 2,440 6,785 period-over-period change -11.1% -11.7% 114.0% -8.6% -8.3% compared with normal -10.3% -21.6% 3.4% -10.6% -11.5% Heating Degree Days - Normal 3,705 994 236 2,728 7,663 Cooling Degree Days - Actual - 123 395 3 521 period-over-period change N/M(1) -40.6% -3.9% -90.3% -19.7% compared with normal N/M(1) -4.7% 14.8% N/M(1) 10.1% Cooling Degree Days - Normal - 129 344 - 473 Heating Degree Days - MGUC Heating Degree Days - Actual N/A 668 162 2,093 2,923 period-over-period change N/A N/A N/A N/A N/A compared with normal N/A -24.6% -28.6% -8.3% -13.9% Heating Degree Days - Normal N/A 886 227 2,282 3,395 Heating Degree Days - MERC Heating Degree Days - Actual (northern service territory) N/A N/A 169 3,033 3,202 Heating Degree Days - Normal (northern service territory) N/A N/A 259 3,026 3,285 compared with normal N/A N/A -34.7% 0.2% -2.5% Heating Degree Days - Actual (southern service territory) N/A N/A 378 3,213 3,591 Heating Degree Days - Normal (southern service territory) N/A N/A 480 3,563 4,043 compared with normal N/A N/A -21.3% -9.8% -11.2% Heating Degree Days - Peoples Gas Light & Coke Heating Degree Days - Actual (for period from 02/21 - 06/30) N/A N/A N/A N/A N/A Heating Degree Days - Normal (for period from 02/21 - 06/30) N/A N/A N/A N/A N/A compared with normal N/A N/A N/A N/A N/A Heating Degree Days - North Shore Gas Heating Degree Days - Actual (for period from 02/21 - 06/30) N/A N/A N/A N/A N/A Heating Degree Days - Normal (for period from 02/21 - 06/30) N/A N/A N/A N/A N/A compared with normal N/A N/A N/A N/A N/A Diluted Earnings per Share Impact - favorable/(unfavorable) - WPSC Heating compared with prior year Electric impact $(0.03) $(0.01) $- $(0.01) $(0.05) Gas impact (0.05) (0.02) 0.02 (0.02) (0.07) Heating compared with normal Electric impact (0.03) (0.02) - (0.02) (0.07) Gas impact (0.05) (0.04) - (0.04) (0.13) Cooling compared with prior year Electric impact - (0.11) (0.02) (0.02) (0.15) Gas Impact - - - - - Cooling compared with normal Electric impact - (0.02) 0.04 - 0.02 Gas impact - - - - - Diluted Earnings per Share Impact - favorable/(unfavorable) - MGUC Heating compared with normal - gas impact N/A $(0.01) $- $(0.01) (0.02) Heating compared with prior year - gas impact N/A N/A N/A N/A N/A Diluted Earnings per Share Impact - favorable/(unfavorable) - MERC Heating compared with normal - gas impact N/A N/A $(0.01) $(0.02) $(0.03) Diluted Earnings per Share Impact - favorable/(unfavorable) - Peoples Gas Light & Coke Heating compared with normal - gas impact (for period from 02/21 - 06/30) N/A N/A N/A N/A N/A Diluted Earnings per Share Impact - favorable/(unfavorable) - North Shore Gas Heating compared with normal - gas impact (for period from 02/21 - 06/30) N/A N/A N/A N/A N/A (10) Note that UPPCO weather information was not included in the above table as it not have a significant impact on financial results. Integrys Energy Group Supplemental Quarterly Financial Highlights (millions, except per share amounts and Integrys Energy Services natural gas sales volumes) 2007 1st Qtr 2nd Qtr YTD Other information: Heating and Cooling Degree Days - WPSC Heating Degree Days - Actual 3,552 850 4,402 period-over-period change 6.9% 9.1% 7.3% compared with normal -3.9% -14.2% -6.1% Heating Degree Days - Normal 3,696 991 4,687 Cooling Degree Days - Actual - 204 204 period-over-period change N/M(1) 65.9% 65.9% compared with normal N/M(1) 46.8% 46.8% Cooling Degree Days - Normal - 139 139 Heating Degree Days - MGUC Heating Degree Days - Actual 3,141 758 3,899 period-over-period change N/A 13.5% N/A compared with normal -1.9% -14.4% -4.6% Heating Degree Days - Normal 3,203 886 4,089 Heating Degree Days - MERC Heating Degree Days - Actual (northern service territory) 3,827 754 4,581 Heating Degree Days - Normal (northern service territory) 3,962 907 4,869 compared with normal -3.4% -16.9% -5.9% Heating Degree Days - Actual (southern service territory) 4,441 1,162 5,603 Heating Degree Days - Normal (southern service territory) 4,590 1,254 5,844 compared with normal -3.2% -7.3% -4.1% Heating Degree Days - Peoples Gas Light & Coke Heating Degree Days - Actual (for period from 02/21 - 06/30) 925 677 1,602 Heating Degree Days - Normal (for period from 02/21 - 06/30) 1,085 768 1,853 compared with normal -14.7% -11.8% -13.5% Heating Degree Days - North Shore Gas Heating Degree Days - Actual (for period from 02/21 - 06/30) 925 677 1,602 Heating Degree Days - Normal (for period from 02/21 - 06/30) 1,085 768 1,853 compared with normal -14.7% -11.8% -13.5% Diluted Earnings per Share Impact - favorable/(unfavorable) - WPSC Heating compared with prior year Electric impact $0.01 - $0.01 Gas impact 0.02 0.01 0.03 Heating compared with normal Electric impact (0.01) (0.01) (0.02) Gas impact (0.02) (0.01) (0.03) Cooling compared with prior year Electric impact - 0.03 0.03 Gas Impact - - - Cooling compared with normal Electric impact - 0.02 0.02 Gas impact - - - Diluted Earnings per Share Impact - favorable/(unfavorable) - MGUC Heating compared with normal - gas impact - - - Heating compared with prior year - gas impact N/A - - Diluted Earnings per Share Impact - favorable/(unfavorable) - MERC Heating compared with normal - gas impact - - (0.01) Diluted Earnings per Share Impact - favorable/(unfavorable) - Peoples Gas Light & Coke Heating compared with normal - gas impact (for period from 02/21 - 06/30) (0.04) (0.01) (0.04) Diluted Earnings per Share Impact - favorable/(unfavorable) - North Shore Gas Heating compared with normal - gas impact (for period from 02/21 - 06/30) (0.01) - (0.01) (10) Note that UPPCO weather information was not included in the above table as it not have a significant impact on financial results. Integrys Energy Group Supplemental Quarterly Financial Highlights (millions, except per share amounts and Integrys Energy Services natural gas sales volumes) 2006 Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Ended Other information: Capital Expenditures Weston 4 $35.2 $41.7 $44.0 $26.0 $146.9 Other regulated utility expenditures 28.7 45.8 54.4 60.7 189.6 Integrys Energy Services 1.1 1.1 3.3 - 5.5 Other N/A N/A N/A N/A N/A Total Capital Expenditures $65.0 $88.6 $101.7 $86.7 $342.0 Impact of Synthetic Fuel Activities on Results of Operations Nonregulated revenue: Mark-to-market gains (losses) on 2006 oil options $6.0 $11.7 $(15.8) $(5.9) $(4.0) Net realized gains on 2006 oil options 2.0 - - 0.1 2.1 Mark-to-market gains (losses) on 2007 oil options 2.4 2.6 (2.2) (3.3) (0.5) Miscellaneous income Operating losses - synthetic fuel facility (4.7) (8.2) (5.7) (5.3) (23.9) Variable payments recognized 0.9 1.0 1.3 - 3.2 Royalty income recognized - - - - - Deferred gain recognized 0.6 0.5 0.6 0.6 2.3 Interest recognized on fixed note receivable 0.3 0.2 0.2 0.2 0.9 Minority Interest 1.2 1.2 1.4 - 3.8 Income (loss) before taxes and tax credits related to synthetic fuel activities 8.7 9.0 (20.2) (13.6) (16.1) Estimated provision (benefit) for income taxes (40%) 3.5 3.6 (8.1) (5.4) (6.4) Income (loss) before tax credits related to synthetic fuel activities 5.2 5.4 (12.1) (8.2) (9.7) Section 29/45K federal tax credits recognized 4.5 3.1 12.4 9.5 29.5 Total impact on income available for common shareholders $9.7 $8.5 $0.3 $1.3 $19.8 Statistics from the Oil and Gas Production Segment Earnings realized by the oil and gas segment (most recorded as discontinued operations) N/A N/A N/A N/A N/A Total production - gas equivalent (Mmcfe)(11) N/A N/A N/A N/A N/A Daily average gas production (MMcfd) N/A N/A N/A N/A N/A Daily average oil production (MBd) N/A N/A N/A N/A N/A Daily average production - gas equivalent (MMcfed)(11) N/A N/A N/A N/A N/A Gas production as a percentage of total production N/A N/A N/A N/A N/A Gas average sales price ($/Mcf) N/A N/A N/A N/A N/A Oil average sales price ($/Bbl) N/A N/A N/A N/A N/A (11) Oil production is converted to gas equivalents based on a conversion of six Mcf of gas per barrel of oil Integrys Energy Group Supplemental Quarterly Financial Highlights (millions, except per share amounts and Integrys Energy Services natural gas sales volumes) 2007 1st Qtr 2nd Qtr YTD Other information: Capital Expenditures Weston 4 $21.0 21.4 42.4 Other regulated utility expenditures 30.4 66.6 97.0 Integrys Energy Services 1.1 6.4 7.5 Other 5.1 3.0 8.1 Total Capital Expenditures $57.6 $97.4 $155.0 Impact of Synthetic Fuel Activities on Results of Operations Nonregulated revenue: Mark-to-market gains (losses) on 2006 oil options $- $- $- Net realized gains on 2006 oil options - - - Mark-to-market gains (losses) on 2007 oil options 1.0 0.2 1.2 Miscellaneous income Operating losses - synthetic fuel facility (4.6) (5.0) (9.6) Variable payments recognized 0.1 - 0.1 Royalty income recognized 0.1 (0.1) - Deferred gain recognized 0.6 0.5 1.1 Interest recognized on fixed note receivable 0.1 0.1 0.2 Minority Interest 0.1 (0.1) - Income (loss) before taxes and tax credits related to synthetic fuel activities (2.6) (4.4) (7.0) Estimated provision (benefit) for income taxes (40%) 1.0 1.8 2.8 Income (loss) before tax credits related to synthetic fuel activities (1.6) (2.6) (4.2) Section 29/45K federal tax credits recognized 20.6 (12.6) 8.0 Total impact on income available for common shareholders $19.0 $(15.2) $3.8 Statistics from the Oil and Gas Production Segment Earnings realized by the oil and gas segment (most recorded as discontinued operations) $8.0 22.8 30.8 Total production - gas equivalent (Mmcfe)(11) 2,768.0 6,579.1 9,347.4 Daily average gas production (MMcfd) 64.4 66.1 65.6 Daily average oil production (MBd) 1.4 1.0 1.1 Daily average production - gas equivalent (MMcfed)(11) 72.9 72.3 72.5 Gas production as a percentage of total production 88% 91% 91% Gas average sales price ($/Mcf) $6.9 $7.54 $7.4 Oil average sales price ($/Bbl) $56.3 $59.8 $58.5 (11) Oil production is converted to gas equivalents based on a conversion of six Mcf of gas per barrel of oil Integrys Energy Services Supplemental Gross Margin Detail (millions, except per unit margins and volumes delivered) Quarter-to-date Year-to-date 2007 2006 Change 2007 2006 Change Natural Gas Retail Realized margins(1) $6.5 $6.8 $(0.3) $34.0 $26.5 $7.5 Unrealized gain/(loss)(2) 3.6 8.6 (5.0) (17.6) 13.7 (31.3) Effect of purchase accounting on realized margins(3) (2.6) -- (2.6) (5.6) -- (5.6) Effect of purchase accounting on unrealized margins(3) 0.9 -- 0.9 2.8 -- 2.8 8.4 15.4 (7.0) 13.6 40.2 (26.6) Wholesale Realized margins(1) 12.1 12.7 (0.6) 26.0 24.5 1.5 Unrealized gain/(loss)(2) (4.1) (13.9) 9.8 12.6 (12.2) 24.8 Effect of purchase accounting on realized margins(3) 2.0 -- 2.0 2.5 -- 2.5 Effect of purchase accounting on unrealized margins(3) 0.2 -- 0.2 0.3 -- 0.3 10.2 (1.2) 11.4 41.4 12.3 29.1 Total Natural Gas Margins 18.6 14.2 4.4 55.0 52.5 2.5 Electric and Other Retail Realized margins(1) 14.6 5.3 9.3 16.5 4.6 11.9 Unrealized gain/(loss)(2) (31.7) (4.9) (26.8) 8.8 (8.7) 17.5 Effect of purchase accounting on realized margins(3) 8.4) -- (8.4) (12.1) -- (12.1) Effect of purchase accounting on unrealized margins(3) 1.9 -- 1.9 2.6 -- 2.6 (23.6) 0.4 (24.0) 15.8 (4.1) 19.9 Wholesale Trading and Structured Origination (4) Realized margins(1) 23.7 30.4 (6.7) 39.2 45.1 (5.9) Unrealized gain/(loss)(2) (20.4) (5.0) (15.4) (4.0) 15.5 (19.5) 3.3 25.4 (22.1) 35.2 60.6 (25.4) Oil option activity Unrealized gain/(loss) 0.2 14.3 (14.1) 1.2 24.7 (23.5) Total Electric and Other Margins (20.1) 40.1 (60.2) 52.2 81.2 (29.0) Total Gross Margin $(1.5) $54.3 $(55.8) $107.2 $133.7 $(26.5) Volumes Delivered (includes only transactions settled physically for the periods shown) Retail Natural Gas (in billion cubic feet) 73.5 61.8 11.7 165.1 131.3 33.8 Realized per unit margins ($ per dekatherm) $0.09 $0.11 $(0.02) $0.21 $0.20 $0.01 Retail Electric (in kilowatt hours) 3,419.8 1,035.2 2,384.6 5,859.3 1,966.8 3,892.5 Realized per unit margins ($ per megawatt hour) $4.27 $5.12 $(0.85) $2.82 $2.34 $0.48 Definitions (1) Realized margins - Represents physical sales, net of physical purchases and the cash settlement of financial contracts (i.e. forwards, futures and swaps). (2) Unrealized gain/(loss) - Represents the non-cash change in fair value of contracts that are deemed to be derivative instruments as defined by Financial Accounting Standards Board Statement No. 133 "Accounting for Derivative Instruments". Mark-to-market gain/loss is another frequently used term to describe this activity. (3) Effect of purchase accounting - Represents the attribution of purchase price related to the contracts acquired via the Peoples merger. The value of the contracts (calculated as of the merger date) is reversed through gross margin in the month of settlement. A portion of this impact runs through unrealized gains and loss and another portion runs through realized margins. Both are noncash impacts that are broken out above in order to help reconcile to the 10Q year-over-year variance discussion. This schedule excludes the amortization of intangibles identified as part of the merger (i.e. customer list) which is included in operating expenses. (4) Wholesale Trading and Structured Origination - Captures our proprietary trading activity, structured origination activity and optimization of our plants and customer load. Variance explanations are captured in three line items in the 10-Q (1) Realized gains on structured origination contracts (2) Liquidation of an electric supply contract in 2005 and (3) All other wholesale electric operations. DATASOURCE: Integrys Energy Group, Inc. Web site: http://www.integrysgroup.com/

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