Integrys Holding (TEG) 8-K Results of Operations and Financial Condition

Exhibit 99.1

[Integrys Energy Group, Inc. logo]

Integrys Energy Group, Inc.

Second Quarter 2012 Earnings

Released August 8, 2012

Contents

	Pages
News Release	5
Condensed Consolidated Statements of Income	1
Condensed Consolidated Statements of Comprehensive Income	1
Condensed Consolidated Balance Sheets	1
Condensed Consolidated Statements of Cash Flows	1
Diluted Earnings Per Share Information – Non-GAAP Financial Information	1
Non-GAAP Financial Information Reported by Segment	4
Non-GAAP Adjusted Earnings Variance Drivers – By Segment	2
Diluted Earnings Per Share Guidance Information	1
Supplemental Quarterly Financial Highlights	3

[Integrys Energy Group, Inc. logo]

For Immediate Release
August 8, 2012
	Contact:	Steven P. Eschbach, CFA
		Vice President – Investor Relations
		Integrys Energy Group, Inc.
		(312) 228-5408

Integrys Energy Group, Inc.'s Second Quarter 2012 Earnings Impacted by

 Unseasonably Warm Weather

Weather and Competitive Pressures at Integrys Energy Services Were Key Drivers Behind Revised Guidance

Chicago – August 8, 2012 – Integrys Energy Group, Inc. (NYSE: TEG) recognized earnings on a Generally Accepted Accounting Principles (GAAP) basis and an adjusted basis as follows:

	Quarter Ended June 30				Six Months Ended June 30
	2012		2011		2012		2011
GAAP earnings (millions)	$	48.8	$	29.1	$	147.7	$	151.8
GAAP diluted earnings per share	$	0.62	$	0.37	$	1.86	$	1.93
Adjusted earnings (millions) *	$	20.3	$	29.9	$	143.1	$	153.5
Diluted earnings per share – adjusted *	$	0.26	$	0.38	$	1.80	$	1.95

Adjusted earnings exclude the effects of certain items that are not comparable from one period to the next.

Second Quarter Results

Adjusted earnings were down this quarter compared with the same quarter last year. The main driver of the decrease was the unusually warm weather in 2012. The natural gas utility segment in particular saw lower sales volumes due to weather. In addition, in the second quarter of 2012, The Peoples Gas Light and Coke Company and North Shore Gas Company recorded $7.9 million after tax of reserves against regulatory assets that had been accrued for recovery in the first quarter of 2012 related to decoupling mechanisms. Recovery of these amounts is uncertain after an order from the Illinois Commerce Commission stated that revenues to be collected by Peoples Gas and North Shore Gas under permanent decoupling mechanisms are subject to

___________________________________

*This news release includes non-GAAP financial measures.  Schedules that provide details on these measures and reconcile these measures to the most comparable GAAP figures are included with this news release.

Integrys Energy Group, Inc.

Second Quarter 2012 Earnings

August 8, 2012

Page 2

refund, pending the outcome of appeals in the Illinois Appellate Court. Refunds would be required if the Court overturns the decoupling mechanism and orders a refund of any amounts collected. As a result, financial results for this segment are more sensitive to volume fluctuations in 2012 than they were in the past.  The negative impact of weather on earnings quarter over quarter at the natural gas utility segment, including the reserves against decoupling amounts, is estimated to be about $12 million after tax.

Adjusted earnings at the electric utility segment increased. The main driver was lower interest expense at Wisconsin Public Service Corporation due to the repayment of $150 million of long-term debt in August 2011.

Integrys Energy Services' adjusted earnings also increased quarter over quarter. Lower operating expenses more than offset reduced margins. Realized retail electric and natural gas margin decreases were mainly due to competitive pressure on per-unit margins, as well as warmer weather. In addition, energy asset margins were down due to the expiration of a long-term capacity contract in the fourth quarter of 2011.

"Absent the adverse weather impacts this quarter, our core utility earnings remain strong," said Charles A. Schrock, Chairman, President and Chief Executive Officer of Integrys Energy Group. "We continue to make good progress on our natural gas infrastructure and electric environmental retrofit projects."

 EARNINGS FORECAST

Integrys Energy Group’s guidance range for 2012 diluted earnings per share on a GAAP basis is between $3.02 and $3.17. This guidance assumes continued operational improvements, the availability of generation units, and normal weather conditions for the rest of 2012. The company's guidance range for 2012 diluted earnings per share – adjusted is between $3.00 and $3.15. At this time, Integrys Energy Group is not estimating the impact of derivative and inventory accounting activities and is not projecting any additional special items for the rest of 2012.

SUPPLEMENTAL DATA PACKAGE

A supplemental data package has been posted on Integrys Energy Group’s website.  It includes this news release, as well as financial statements, non-GAAP financial information, guidance information for diluted earnings per share, and quarterly financial information by reportable segment.

Integrys Energy Group, Inc.

Second Quarter 2012 Earnings

August 8, 2012

Page 3

CONFERENCE CALL

An earnings conference call is scheduled for 8 a.m. Central time on Thursday, August 9, 2012.   The call can be accessed 15 minutes prior to the scheduled start time by dialing 888-788-9425.  Callers will be required to supply EARNINGS as the passcode and MR. STEVEN ESCHBACH as the leader.  A replay of the conference call will be available through November 2, 2012, by dialing 888-568-0883.

Investors may also listen to the live conference or a replay on Integrys Energy Group’s website at http://www.integrysgroup.com/investor/presentations.aspx.

PowerPoint slides will be posted on the website and will be referred to within the prepared remarks during the call.  The slides will be available at 6 a.m. Central time on August 9.

FORWARD-LOOKING STATEMENTS

Financial results in this news release are unaudited.  In this news release, Integrys Energy Group makes statements concerning its 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, but rather are subject to numerous management assumptions, risks, and uncertainties. Therefore, actual results may differ materially from those expressed or implied by these statements. Although Integrys Energy Group believes that these forward-looking statements and the underlying assumptions are reasonable, it 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 Integrys Energy Group’s Annual Report on Form 10-K for the year ended December 31, 2011, as may be amended or supplemented in

Part II, Item IA of its 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 the regulated businesses;

● Federal and state legislative and regulatory changes relating to the environment, including climate change and other environmental regulations impacting coal-fired generation facilities and renewable energy standards;

● Other federal and state legislative and regulatory changes, including deregulation and 

Integrys Energy Group, Inc.

Second Quarter 2012 Earnings

August 8, 2012

Page 4

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 Integrys Energy Group and its subsidiaries are subject;

● Costs and effects of litigation and administrative proceedings, settlements, investigations, and claims, including manufactured gas plant site cleanup, third-party intervention in permitting and licensing projects, compliance with Clean Air Act requirements at generation plants, and prudence and reconciliation of costs recovered in revenues through automatic gas cost recovery mechanisms;

● Changes in credit ratings and interest rates caused by volatility in the financial markets and actions of rating agencies and their impact on Integrys Energy Group's and its 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 Integrys Energy Group’s 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 the ability to adequately forecast energy use for all of Integrys Energy Group’s 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 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;

Integrys Energy Group, Inc.

Second Quarter 2012 Earnings

August 8, 2012

Page 5

● The risk of financial loss, including increases in bad debt expense, associated with the inability of Integrys Energy Group’s and its 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 Integrys Energy Group’s earnings;

● The effect of accounting pronouncements issued periodically by standard-setting bodies; and

● Other factors discussed in reports Integrys Energy Group files with the United States Securities and Exchange Commission.

Except to the extent required by the federal securities laws, Integrys Energy Group undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

About Integrys Energy Group, Inc.

Integrys Energy Group is a diversified energy holding company with regulated natural gas and electric utility operations (serving customers in Illinois, Michigan, Minnesota, and Wisconsin), an approximate 34% equity ownership interest in American Transmission Company (a federally regulated electric transmission company operating in Wisconsin, Michigan, Minnesota, and Illinois), and nonregulated energy operations.

More information is available at www.integrysgroup.com.

- Unaudited Financial Statements to Follow -

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)	2012			2011			2012			2011
Utility revenues	$	563.6		$	670.8		$	1,534.6		$	1,839.5
Nonregulated revenues		278.3			340.0			558.6			798.4
Total revenues		841.9			1,010.8			2,093.2			2,637.9
Utility cost of fuel, natural gas, and purchased power		225.9			305.2			698.2			965.9
Nonregulated cost of sales		193.5			291.0			468.8			695.0
Operating and maintenance expense		252.2			261.1			513.2			525.7
Depreciation and amortization expense		63.2			62.2			125.9			124.5
Taxes other than income taxes		23.0			23.8			51.4			50.6
Operating income		84.1			67.5			235.7			276.2
Earnings from equity method investments		22.2			20.3			43.3			39.7
Miscellaneous income		1.7			1.3			4.1			3.1
Interest expense		(29.9	)		(32.2	)		(60.4	)		(67.0	)
Other expense		(6.0	)		(10.6	)		(13.0	)		(24.2	)
Income before taxes		78.1			56.9			222.7			252.0
Provision for income taxes		28.4			26.1			75.2			97.8
Net income from continuing operations		49.7			30.8			147.5			154.2
Discontinued operations, net of tax		(0.1	)		(0.9	)		1.8			(0.8	)
Net income		49.6			29.9			149.3			153.4
Preferred stock dividends of subsidiary		(0.8	)		(0.8	)		(1.6	)		(1.6	)
Net income attributed to common shareholders	$	48.8		$	29.1		$	147.7		$	151.8
Average shares of common stock
Basic		78.5			78.7			78.5			78.5
Diluted		79.3			79.1			79.3			78.8
Earnings (loss) per common share (basic)
Net income from continuing operations	$	0.62		$	0.38		$	1.86		$	1.94
Discontinued operations, net of tax		-			(0.01	)		0.02			(0.01	)
Earnings per common share (basic)	$	0.62		$	0.37		$	1.88		$	1.93
Earnings (loss) per common share (diluted)
Net income from continuing operations	$	0.62		$	0.38		$	1.84		$	1.94
Discontinued operations, net of tax		-			(0.01	)		0.02			(0.01	)
Earnings per common share (diluted)	$	0.62		$	0.37		$	1.86		$	1.93
Dividends per common share declared	$	0.68		$	0.68		$	1.36		$	1.36

INTEGRYS ENERGY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)	Three Months Ended						Six Months Ended
	June 30						June 30
(Millions)	2012			2011			2012			2011
Net income	$	49.6		$	29.9		$	149.3		$	153.4
Other comprehensive income, net of tax:
Cash flow hedges
Unrealized net gains (losses) arising during period, net of tax of $ - million, $3.6 million,
$(0.2) million, and $1.2 million, respectively		0.1			6.0			(0.2	)		1.9
Reclassification of net losses (gains) to net income, net of tax of $0.6 million, $(2.3) million,
$1.6 million, and $2.8 million, respectively		1.0			(4.3	)		2.5			4.1
Cash flow hedges, net		1.1			1.7			2.3			6.0
Defined benefit pension plans
Amortization of pension and other postretirement benefit costs included in net periodic benefit cost,
net of tax of $0.2 million, $ - million, $0.5 million,  and $0.2 million, respectively		0.4			0.3			0.7			0.5
Other comprehensive income, net of tax		1.5			2.0			3.0			6.5
Comprehensive income		51.1			31.9			152.3			159.9
Preferred stock dividends of subsidiary		(0.8	)		(0.8	)		(1.6	)		(1.6	)
Comprehensive income attributed to common shareholders	$	50.3		$	31.1		$	150.7		$	158.3

INTEGRYS ENERGY GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)	June 30			December 31
(Millions)	2012			2011
Assets
Cash and cash equivalents	$	25.7		$	28.1
Collateral on deposit		58.0			50.9
Accounts receivable and accrued unbilled revenues, net of reserves of $42.5 and $47.1, respectively		493.1			737.7
Inventories		141.8			252.3
Assets from risk management activities		195.4			227.2
Regulatory assets		112.8			125.1
Deferred income taxes		108.6			94.2
Prepaid taxes		152.9			209.6
Other current assets		90.6			78.2
Current assets		1,378.9			1,803.3
Property, plant, and equipment, net of accumulated depreciation of $3,092.9 and $3,018.7, respectively		5,358.6			5,199.1
Regulatory assets		1,635.8			1,658.5
Assets from risk management activities		53.1			64.4
Equity method investments		496.9			476.3
Goodwill		658.3			658.4
Other long-term assets		127.4			123.2
Total assets	$	9,709.0		$	9,983.2
Liabilities and Equity
Short-term debt	$	279.0		$	303.3
Current portion of long-term debt		387.0			250.0
Accounts payable		371.9			426.6
Liabilities from risk management activities		264.2			311.6
Accrued taxes		40.4			70.5
Regulatory liabilities		95.1			67.5
Other current liabilities		189.9			217.2
Current liabilities		1,627.5			1,646.7
Long-term debt		1,735.0			1,872.0
Deferred income taxes		1,153.3			1,070.7
Deferred investment tax credits		45.4			44.0
Regulatory liabilities		338.1			332.5
Environmental remediation liabilities		604.5			615.1
Pension and other postretirement benefit obligations		521.5			749.3
Liabilities from risk management activities		86.1			102.0
Asset retirement obligations		407.9			397.2
Other long-term liabilities		143.9			141.1
Long-term liabilities		5,035.7			5,323.9
Commitments and contingencies
Common stock - $1 par value; 200,000,000 shares authorized; 78,287,906 shares issued; 77,912,113 shares outstanding		78.3			78.3
Additional paid-in capital		2,568.4			2,579.1
Retained earnings		404.6			363.6
Accumulated other comprehensive loss		(39.5	)		(42.5	)
Shares in deferred compensation trust		(17.2	)		(17.1	)
Total common shareholders' equity		2,994.6			2,961.4
Preferred stock of subsidiary - $100 par value; 1,000,000 shares authorized; 511,882 shares issued; 510,495 shares outstanding		51.1			51.1
Noncontrolling interest in subsidiaries		0.1			0.1
Total liabilities and equity	$	9,709.0		$	9,983.2

INTEGRYS ENERGY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)			Six Months Ended
			June 30
(Millions)			2012			2011
Operating Activities
Net income			$	149.3		$	153.4
Adjustments to reconcile net income to net cash provided by operating activities
	Discontinued operations, net of tax			(1.8	)		0.8
	Depreciation and amortization expense			125.9			124.5
	Recoveries and refunds of regulatory assets and liabilities			14.9			23.9
	Net unrealized gains on energy contracts			(1.3	)		(9.7	)
	Nonregulated lower of cost or market inventory adjustments			4.2			0.3
	Bad debt expense			15.1			20.3
	Pension and other postretirement expense			35.4			36.1
	Pension and other postretirement contributions			(247.3	)		(108.9	)
	Deferred income taxes and investment tax credits			65.9			126.9
	Gain on sale of assets			(2.1	)		(0.5	)
	Equity income, net of dividends			(9.1	)		(7.8	)
	Other			4.5			12.8
	Changes in working capital
		Collateral on deposit		(7.5	)		(3.0	)
		Accounts receivable and accrued unbilled revenues		223.8			236.7
		Inventories		116.3			86.0
		Other current assets		45.5			(12.1	)
		Accounts payable		(62.6	)		(54.1	)
		Temporary LIFO liquidation credit		2.5			54.8
		Other current liabilities		(37.9	)		(92.2	)
Net cash provided by operating activities				433.7			588.2
Investing Activities
Capital expenditures				(249.2	)		(114.5	)
Proceeds from the sale or disposal of assets				5.9			3.3
Capital contributions to equity method investments				(15.5	)		(11.0	)
Other				(3.7	)		(0.3	)
Net cash used for investing activities				(262.5	)		(122.5	)
Financing Activities
Short-term debt, net				(24.3	)		57.6
Redemption of notes payable				-			(10.0	)
Issuance of long-term debt				28.0			-
Repayment of long-term debt				(28.2	)		(355.2	)
Payment of dividends
	Preferred stock of subsidiary			(1.6	)		(1.6	)
	Common stock			(106.0	)		(100.4	)
Issuance of common stock				-			4.9
Payments made on derivative contracts related to divestitures classified as financing activities				(19.8	)		(20.2	)
Other				(21.7	)		(8.4	)
Net cash used for financing activities				(173.6	)		(433.3	)
Change in cash and cash equivalents - continuing operations				(2.4	)		32.4
Change in cash and cash equivalents - discontinued operations
	Net cash provided by investing activities			-			-
Net change in cash and cash equivalents				(2.4	)		32.4
Cash and cash equivalents at beginning of period				28.1			179.0
Cash and cash equivalents at end of period			$	25.7		$	211.4

Integrys Energy Group, Inc.

Diluted Earnings Per Share – Adjusted

and Weather Impacts

Diluted Earnings Per Share Information (Non-GAAP 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.

	Three Months Ended June 30						Six Months Ended June 30
	2012			2011			2012			2011
Diluted EPS	$	0.62		$	0.37		$	1.86		$	1.93
Special Items (net of taxes):
Net noncash gains related to derivative and inventory accounting activities		(0.36	)		(0.08	)		(0.04	)		(0.08	)
Discontinued operations		-			0.01			(0.02	)		0.01
Tax expense resulting from Michigan law change		-			0.05			-			0.05
Tax expense resulting from health care reform legislation		-			0.02			-			0.02
Restructuring expense		-			0.01			-			0.02
Diluted EPS – adjusted	$	0.26		$	0.38		$	1.80		$	1.95
Average Shares of Common Stock – Diluted (in millions)		79.3			79.1			79.3			78.8

Weather Impacts (Compared to Normal, Net of Decoupling)

	Three Months Ended June 30						Six Months Ended June 30
	2012			2011			2012			2011
Dollar Impacts, net of taxes (Millions)
Natural Gas Utility Segment	$	(10.8	) *	$	0.7		$	(22.3	) *	$	2.1
Electric Utility Segment		-			(0.1	)		(2.3	)		(0.1	)
Integrys Energy Services – Core		(0.8	)		0.2			(2.2	)		0.8
Total	$	(11.6	)	$	0.8		$	(26.8	)	$	2.8

	Three Months Ended June 30					Six Months Ended June 30
	2012			2011		2012			2011
Diluted EPS Impacts
Natural Gas Utility Segment	$	(0.14	) *	$	0.01	$	(0.28	) *	$	0.03
Electric Utility  Segment		-			-		(0.03	)		-
Integrys Energy Services – Core		(0.01	)		-		(0.03	)		0.01
Total	$	(0.15	)	$	0.01	$	(0.34	)	$	0.04

* Includes the impact of reserves booked against regulatory assets at Peoples Gas and North Shore Gas related to their permanent decoupling mechanisms.

Integrys Energy Group, Inc.

Non-GAAP Financial Information Reported by Segment

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, 2012 and 2011.

June 30, 2012 (Millions)	Natural Gas Utility			Electric Utility		Electric Transmission Investment		Integrys EnergyServices					Holding Company and Other			Integrys Energy Group Consolidated
								Core		Other
Net income (loss) attributed to      common shareholders	$	(11.2	)	$	20.9	$	13.1	$	2.3	$	28.6		$	(4.9	)	$	48.8
Special Items (net of taxes)
Net noncash gains related to derivative and inventory accounting activities		-			-		-		-		(28.6	)		-			(28.6	)
Discontinued operations		-			-		-		-		-			0.1			0.1
Adjusted earnings (loss)	$	(11.2	)	$	20.9	$	13.1	$	2.3	$	-		$	(4.8	)	$	20.3

June 30, 2011 (Millions)	Natural Gas Utility			Electric Utility		Electric Transmission Investment		Integrys Energy Services					Holding Company and Other			Integrys Energy Group Consolidated
								Core		Other
Net income (loss) attributed to     common shareholders	$	1.2		$	18.2	$	12.0	$	1.2	$	4.8		$	(8.3	)	$	29.1
Special Items (net of taxes)
Net noncash gains related to derivative and inventory accounting activities at Integrys Energy Services		-			-		-		-		(6.3	)		-			(6.3	)
Discontinued operations		-			-		-		-		-			0.9			0.9
Tax expense (benefit) resulting from Michigan law change		(0.8	)		-		0.4		-		1.0			3.6			4.2
Tax expense (benefit) resulting from health care reform legislation		0.3			1.3		-		-		-			(0.1	)		1.5
Restructuring expense		-			-		-		-		0.5			-			0.5
Adjusted earnings (loss)	$	0.7		$	19.5	$	12.4	$	1.2	$	-		$	(3.9	)	$	29.9

Integrys Energy Group, Inc.

Non-GAAP Financial Information Reported by Segment

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, 2012 and 2011.

June 30, 2012	Natural Gas Utility			Electric Utility		Electric Transmission Investment		Integrys Energy Services					Holding Company and Other			Integrys Energy Group Consolidated
								Core		Other
Diluted EPS	$	(0.14	)	$	0.26	$	0.17	$	0.03	$	0.36		$	(0.06	)	$	0.62
Special Items (net of taxes)
Net noncash gains related to derivative and inventory accounting activities		-			-		-		-		(0.36	)		-			(0.36	)
Discontinued operations		-			-		-		-		-			-			-
Diluted EPS – adjusted	$	(0.14	)	$	0.26	$	0.17	$	0.03	$	-		$	(0.06	)	$	0.26

June 30, 2011	Natural Gas Utility			Electric Utility		Electric Transmission Investment		Integrys Energy Services					Holding Company and Other			Integrys Energy Group Consolidated
								Core		Other
Diluted EPS	$	0.02		$	0.23	$	0.15	$	0.02	$	0.06		$	(0.11	)	$	0.37
Special Items (net of taxes)
Net noncash gains related to derivative and inventory accounting activities at Integrys Energy Services		-			-		-		-		(0.08	)		-			(0.08	)
Discontinued operations		-			-		-		-		-			0.01			0.01
Tax expense (benefit) resulting from Michigan law change		(0.01	)		-		-		-		0.01			0.05			0.05
Tax expense (benefit) resulting from health care reform legislation		-			0.02		-		-		-			-			0.02
Restructuring expense		-			-		-		-		0.01			-			0.01
Diluted EPS – adjusted	$	0.01		$	0.25	$	0.15	$	0.02	$	-		$	(0.05	)	$	0.38

Integrys Energy Group, Inc.

Non-GAAP Financial Information Reported by Segment

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, 2012 and 2011.

June 30, 2012 (Millions)	Natural Gas Utility			Electric Utility		Electric Transmission Investment		Integrys EnergyServices					Holding Company and Other			Integrys Energy Group Consolidated
								Core		Other
Net income (loss) attributed to     common shareholders	$	67.4		$	45.2	$	26.4	$	8.1	$	2.7		$	(2.1	)	$	147.7
Special Items (net of taxes)
Net noncash gains related to derivative and inventory accounting activities		(0.1	)		-		-		-		(2.7	)		-			(2.8	)
Discontinued operations		-			-		-		-		-			(1.8	)		(1.8	)
Adjusted earnings (loss)	$	67.3		$	45.2	$	26.4	$	8.1	$	-		$	(3.9	)	$	143.1

June 30, 2011 (Millions)	Natural Gas Utility			Electric Utility		Electric Transmission Investment		Integrys Energy Services					Holding Company and Other			Integrys Energy Group Consolidated
								Core		Other
Net income (loss) attributed to     common shareholders	$	78.4		$	43.3	$	23.4	$	12.8	$	4.0		$	(10.1	)	$	151.8
Special Items (net of taxes)
Net noncash gains related to derivative and inventory accounting activities at Integrys Energy Services		-			-		-		-		(5.9	)		-			(5.9	)
Discontinued operations		-			-		-		-		(0.1	)		0.9			0.8
Tax expense (benefit) resulting from Michigan law change		(0.8	)		-		0.4		-		1.0			3.6			4.2
Tax expense (benefit) resulting from health care reform legislation		0.3			1.3		-		-		-			(0.1	)		1.5
Restructuring expense		-			0.1		-		-		1.1			-			1.2
Net gain on disposition related to Integrys Energy Services' strategy change		-			-		-		-		(0.1	)		-			(0.1	)
Adjusted earnings (loss)	$	77.9		$	44.7	$	23.8	$	12.8	$	-		$	(5.7	)	$	153.5

Integrys Energy Group, Inc.

Non-GAAP Financial Information Reported by Segment

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, 2012 and 2011.

June 30, 2012	Natural Gas Utility		Electric Utility		Electric Transmission Investment		Integrys Energy Services					Holding Company and Other			Integrys Energy Group Consolidated
							Core		Other
Diluted EPS	$	0.85	$	0.57	$	0.33	$	0.10	$	0.04		$	(0.03	)	$	1.86
Special Items (net of taxes)
Net noncash gains related to derivative and inventory accounting activities		-		-		-		-		(0.04	)		-			(0.04	)
Discontinued operations		-		-		-		-		-			(0.02	)		(0.02	)
Diluted EPS – adjusted	$	0.85	$	0.57	$	0.33	$	0.10	$	-		$	(0.05	)	$	1.80

June 30, 2011	Natural Gas Utility			Electric Utility		Electric Transmission Investment		Integrys Energy Services					Holding Company and Other			Integrys Energy Group Consolidated
								Core		Other
Diluted EPS	$	1.00		$	0.55	$	0.30	$	0.16	$	0.05		$	(0.13	)	$	1.93
Special Items (net of taxes)
Net noncash gains related to derivative and inventory accounting activities at Integrys Energy Services		-			-		-		-		(0.08	)		-			(0.08	)
Discontinued operations		-			-		-		-		-			0.01			0.01
Tax expense (benefit) resulting from Michigan law change		(0.01	)		-		-		-		0.01			0.05			0.05
Tax expense (benefit) resulting from health care reform legislation		-			0.02		-		-		-			-			0.02
Restructuring expense		-			-		-		-		0.02			-			0.02
Net gain on disposition related to Integrys energy Services' strategy change		-			-		-		-		-			-			-
Diluted EPS – adjusted	$	0.99		$	0.57	$	0.30	$	0.16	$	-		$	(0.07	)	$	1.95

Non-GAAP Adjusted Earnings Variance Drivers - By Segment
Quarter Ended June 30, 2012
(Millions)
ADJUSTED EARNINGS FOR QUARTER ENDED JUNE 30, 2011				$	29.9
Variance Driver by Segment	Variance
Natural Gas Utility
Impact of Illinois Commerce Commission amendatory order related to permanent decoupling mechanism	$	(7.9	)
Decrease in sales volumes, primarily driven by warmer weather, net of decoupling		(7.4	)
Increase in operating expenses driven by an increase in natural gas distribution costs		(2.8	)
Net increase in margins due to rate orders		6.4
Other		(0.2	)
					(11.9	)
Electric Utility
Decrease in interest expense, driven by the repayment of long-term debt in 2011	$	1.7
Decrease in maintenance expense due to the timing of scheduled plant outages		1.4
Tax adjustments required by GAAP to ensure the year-to-date interim effective tax rate reflects the
projected annual effective tax rate		(1.4	)
Decrease in margins due to the 2012 Wisconsin Public Service Corporation rate case re-opener		(1.1	)
Other		0.8
					1.4
Electric Transmission Investment
Increase in earnings from investment					0.7
Integrys Energy Services
Decrease in operating expenses, driven by a decrease in taxes other than income taxes	$	1.7
Increase in wholesale margins, due to residual contracts		1.0
Decrease in realized retail margins, driven by competitive pressure on per-unit margins, as well as
warmer weather		(1.6	)
Decrease in realized energy asset margins, driven by the expiration of a long-term capacity contract
in the fourth quarter of 2011		(0.7	)
Other		0.7
					1.1
Holding Company and Other					(0.9	)
ADJUSTED EARNINGS FOR QUARTER ENDED JUNE 30, 2012				$	20.3

Non-GAAP Adjusted Earnings Variance Drivers - By Segment
Six Months Ended June 30, 2012
(Millions)
ADJUSTED EARNINGS FOR SIX MONTHS ENDED JUNE 30, 2011				$	153.5
Variance Driver by Segment	Variance
Natural Gas Utility
Decrease in sales volumes, primarily driven by warmer weather, net of decoupling	$	(20.1	)
Increase in operating expenses driven by an increase in natural gas distribution costs		(4.7	)
Net increase in margins due to rate orders		13.2
Other		1.0
					(10.6	)
Electric Utility
Decrease in interest expense, driven by the repayment of long-term debt in 2011	$	3.4
Decrease in maintenance expense due to the timing of scheduled plant outages		1.1
Decrease in wholesale margins driven by lower sales volumes		(1.9	)
Decrease in margins due to the 2012 Wisconsin Public Service Corporation rate case re-opener		(1.3	)
Write-off of Upper Peninsula Power Company's net regulatory asset related to decoupling		(0.9	)
Other		0.1
					0.5
Electric Transmission Investment
Increase in earnings from investment					2.6
Integrys Energy Services
Decrease in realized retail margins, driven by the expiration of several large, lower margin contracts
in 2011, competitive pressure on per-unit margins, and warmer weather	$	(3.7	)
Decrease in realized energy asset margins, driven by the expiration of a long-term capacity contract
in the fourth quarter of 2011		(2.0	)
Net decrease in wholesale margins, due to residual contracts		(1.2	)
Decrease in operating expenses, driven by decreases in employee benefit expenses
and credit support fees to the holding company		2.8
Other		(0.6	)
					(4.7	)
Holding Company and Other					1.8
ADJUSTED EARNINGS FOR SIX MONTHS ENDED JUNE 30, 2012				$	143.1

Integrys Energy Group, Inc.

Diluted Earnings Per Share Guidance Information

2012 Diluted EPS Guidance	Potential 2012
	Low Scenario			High  Scenario
Regulated natural gas utility segment	$	1.12		$	1.13
Regulated electric utility segment		1.16			1.17
Electric transmission investment segment		0.66			0.68
Integrys Energy Services
Core		0.23			0.28
Other		-			-
Holding company and other segment		(0.15	)		(0.09	)
Diluted EPS	$	3.02		$	3.17
Average Shares of Common Stock – Diluted (in millions)		79.3			79.3

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 2012.

Diluted EPS	$	3.02		$	3.17
Special Items (net of taxes)
Discontinued operations		(0.02	)		(0.02	)
Diluted EPS – adjusted	$	3.00		$	3.15
Average Shares of Common Stock – Diluted (in millions)		79.3			79.3

Key Assumptions for 2012:

§   Continued operational improvements

§   Availability of generation units

§   Normal weather conditions for the rest of the year

§   Not estimating the impact of derivative and inventory accounting activities and not projecting any other special items for the rest of the year

Integrys Energy Group, Inc.
Supplemental Quarterly Financial Highlights
(millions, except per share amounts)
	2011															2012
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year Ended			1st Qtr			2nd Qtr			Year-to-Date
Regulated Natural Gas Utility Segment
Revenues	$	853.4		$	364.0		$	239.3		$	541.3		$	1,998.0		$	665.7		$	253.7		$	919.4
year-over-year change		-7.9	%		22.6	%		2.1	%		-9.7	%		-2.9	%		-22.0	%		-30.3	%		-24.5	%
Purchased natural gas costs		531.1			180.6			99.6			290.1			1,101.4			346.5			92.7			439.2
Margins	$	322.3		$	183.4		$	139.7		$	251.2		$	896.6		$	319.2		$	161.0		$	480.2
year-over-year change		0.9	%		4.3	%		-3.7	%		-5.2	%		-1.0	%		-1.0	%		-12.2	%		-5.0	%
margins/revenues		37.8	%		50.4	%		58.4	%		46.4	%		44.9	%		47.9	%		63.5	%		52.2	%
Operating and maintenance expense		139.8			130.8			121.1			131.9			523.6			135.3			127.0			262.3
Depreciation and amortization expense		31.2			31.3			31.7			31.9			126.1			32.4			32.7			65.1
Taxes other than income taxes		9.4			8.2			8.7			9.3			35.6			9.5			8.6			18.1
Operating income (loss)		141.9			13.1			(21.8	)		78.1			211.3			142.0			(7.3	)		134.7
year-over-year change		2.0	%		35.1	%		-24.8	%		-0.1	%		6.7	%		0.1	%		N/M	(1)		-13.1	%
Net income (loss) attributed to common shareholders	$	77.2		$	1.2		$	(20.0	)	$	44.9		$	103.3		$	78.6		$	(11.2	)	$	67.4
Total throughput in therms		1,693.5			678.6			454.5			1,042.8			3,869.4			1,372.3			601.8			1,974.1
year-over-year change		7.1	%		27.8	%		0.7	%		-10.8	%		3.6	%		-19.0	%		-11.3	%		-16.8	%
Retail throughput in therms
Residential		782.4			228.6			95.6			434.9			1,541.5			606.4			171.0			777.4
Commercial and industrial		238.4			67.0			37.1			127.0			469.5			183.4			51.0			234.4
Other		21.5			12.2			12.0			15.6			61.3			18.7			14.2			32.9
Total retail throughput in therms		1,042.3			307.8			144.7			577.5			2,072.3			808.5			236.2			1,044.7
Transport throughput in therms
Residential		114.5			39.5			16.6			66.8			237.4			87.1			31.3			118.4
Commercial and industrial		536.7			331.3			293.2			398.5			1,559.7			476.7			334.3			811.0
Total transport throughput in therms		651.2			370.8			309.8			465.3			1,797.1			563.8			365.6			929.4
Regulated Electric Utility Segment
Revenues	$	322.6		$	315.4		$	367.5		$	301.8		$	1,307.3		$	307.0		$	311.8		$	618.8
year-over-year change		-3.7	%		-1.7	%		-1.9	%		-2.2	%		-2.4	%		-4.8	%		-1.1	%		-3.0	%
Fuel and purchased power costs		137.8			133.6			157.5			117.4			546.3			127.5			135.5			263.0
Margins	$	184.8		$	181.8		$	210.0		$	184.4		$	761.0		$	179.5		$	176.3		$	355.8
year-over-year change		-5.0	%		-1.4	%		-4.6	%		4.7	%		-1.8	%		-2.9	%		-3.0	%		-2.9	%
margins/revenues		57.3	%		57.6	%		57.1	%		61.1	%		58.2	%		58.5	%		56.5	%		57.5	%
Operating and maintenance expense		101.0			106.5			102.7			111.3			421.5			100.3			99.8			200.1
Restructuring expense		0.2			-			-			-			0.2			-			-			-
Depreciation and amortization expense		22.1			22.0			22.0			22.4			88.5			22.0			22.1			44.1
Taxes other than income taxes		12.3			12.0			11.9			11.4			47.6			12.9			11.7			24.6
Operating income		49.2			41.3			73.4			39.3			203.2			44.3			42.7			87.0
year-over-year change		-11.2	%		-19.2	%		-9.4	%		29.7	%		-6.7	%		-10.0	%		3.4	%		-3.9	%
Net income attributed to common shareholders	$	25.1		$	18.2		$	39.5		$	17.7		$	100.5		$	24.3		$	20.9		$	45.2
Sales in kilowatt-hours		3,940.7			3,922.4			4,424.1			3,664.5			15,951.7			3,897.4			4,059.3			7,956.7
year-over-year change		-2.5	%		-3.4	%		-1.6	%		-8.2	%		-3.8	%		-1.1	%		3.5	%		1.2	%
Residential		814.3			685.2			882.4			753.7			3,135.6			775.2			687.4			1,462.6
Commercial and industrial		2,053.2			2,093.4			2,275.9			2,098.4			8,520.9			2,087.8			2,137.2			4,225.0
Wholesale		1,062.2			1,136.0			1,257.4			801.2			4,256.8			1,023.5			1,227.1			2,250.6
Other		11.0			7.8			8.4			11.2			38.4			10.9			7.6			18.5
Electric Transmission Investment Segment
American Transmission Company (ATC)
Equity contributions to ATC	$	3.4		$	2.5		$	2.6		$	-		$	8.5		$	3.4		$	5.1		$	8.5
After-tax equity earnings recognized from ATC investment		11.4			12.0			12.2			12.2			47.8			13.3			13.1			26.4
Notes:
(1) Not meaningful

  Integrys Energy Group, Inc. Financial Supplement

Page 1

Integrys Energy Group, Inc.
Supplemental Quarterly Financial Highlights
(millions, except Integrys Energy Services' natural gas sales volumes)
	2011															2012
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year Ended			1st Qtr			2nd Qtr			Year-to-Date
Nonregulated Segment - Integrys Energy Services
Nonregulated revenues	$	455.5		$	336.3		$	337.4		$	266.7		$	1,395.9		$	273.0		$	271.4		$	544.4
year-over-year change		-29.3	%		-16.2	%		-14.9	%		-30.1	%		-23.5	%		-40.1	%		-19.3	%		-31.2	%
Nonregulated cost of fuel, natural gas, and purchased power		402.5			289.7			291.1			289.4			1,272.7			271.7			190.0			461.7
Margins	$	53.0		$	46.6		$	46.3		$	(22.7	)	$	123.2		$	1.3		$	81.4		$	82.7
year-over-year change		728.1	%		-46.4	%		-22.3	%		N/M	(1)		-41.2	%		-97.5	%		74.7	%		-17.0	%
Margin Detail:
- Electric and other margins		37.3			37.9			44.4			(20.9	)		98.7			(22.0	)		68.8			46.8
- Natural gas margins		15.7			8.7			1.9			(1.8	)		24.5			23.3			12.6			35.9
Margins		53.0			46.6			46.3			(22.7	)		123.2			1.3			81.4			82.7
Retail Electric Realized Unit Margins	$	6.88		$	8.01		$	7.79		$	9.08		$	7.93		$	5.79		$	7.23		$	6.53
Retail Natural Gas Realized Unit Margins	$	0.48		$	0.29		$	0.23		$	0.42		$	0.39		$	0.54		$	0.25		$	0.44
Operating and maintenance expense		31.1			29.4			24.2			24.1			108.8			29.2			28.1			57.3
Restructuring expense		1.0			0.8			-			-			1.8			-			-			-
Impairment losses on property, plant, and equipment		-			-			-			4.6			4.6			-			-			-
Net gain on Integrys Energy Services    dispositions related to    strategy change		(0.1	)		(0.1	)		-			(0.1	)		(0.3	)		-			-			-
Depreciation and amortization expense		3.3			3.2			3.1			3.1			12.7			2.9			3.0			5.9
Taxes other than income taxes		1.8			2.1			1.1			2.0			7.0			2.3			0.6			2.9
Operating income (loss)		15.9			11.2			17.9			(56.4	)		(11.4	)		(33.1	)		49.7			16.6
year-over-year change		N/M	(1)		-84.5	%		N/M	(1)		N/M	(1)		N/M	(1)		N/M	(1)		343.8	%		-38.7	%
Discontinued operations, net of tax		0.1			-			-			-			0.1			-			-			-
Net income (loss) attributed to common shareholders	$	10.8		$	6.0		$	10.9		$	(33.8	)	$	(6.1	)	$	(20.1	)	$	30.9		$	10.8
Physically settled volumes
- Retail electric sales volumes in kilowatt-hours		2,952.5			2,997.0			3,504.6			2,962.4			12,416.5			2,918.9			3,082.7			6,001.6
- Wholesale assets and distributed    solar electric sales volumes    in kilowatt-hours (2)		72.6			57.8			107.8			81.9			320.1			88.9			68.1			157.0
- Retail natural gas sales volumes    in billion cubic feet		48.5			23.9			18.3			34.8			125.5			43.8			23.3			67.1
Nonregulated Segment - Holding Company and Other
Net income (loss) attributed to common shareholders	$	(1.8	)	$	(8.3	)	$	(5.7	)	$	(2.3	)	$	(18.1	)	$	2.8		$	(4.9	)	$	(2.1	)
Notes:
(1) Not meaningful
(2) The volumes related to the remaining wholesale electric contracts are not significant.

  Integrys Energy Group, Inc. Financial Supplement

Page 2

Integrys Energy Group, Inc.
Supplemental Quarterly Financial Highlights
(millions, except heating and cooling degree days information and Integrys Energy Services' sales volumes)
	2011															2012
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year Ended			1st Qtr			2nd Qtr			Year-to-Date
Other information:
Heating and Cooling Degree Days - WPS
Heating Degree Days - Actual		3,892			1,084			246			2,302			7,524			2,864			748			3,612
period-over-period change		13.0	%		45.7	%		8.4	%		-13.6	%		6.3	%		-26.4	%		-31.0	%		-27.4	%
compared with normal		6.3	%		10.8	%		10.8	%		-13.3	%		0.1	%		-22.7	%		-24.7	%		-23.1	%
Heating Degree Days - Normal		3,660			978			222			2,654			7,514			3,705			994			4,699
Cooling Degree Days - Actual		-			102			494			7			603			11			264			275
period-over-period change		N/M	(1)		-26.1	%		3.3	%		N/M	(1)		-2.1	%		N/M	(1)		158.8	%		169.6	%
compared with normal		N/M	(1)		-26.1	%		46.6	%		40.0	%		25.6	%		N/M	(1)		107.9	%		116.5	%
Cooling Degree Days - Normal		-			138			337			5			480			-			127			127
Heating and Cooling Degree Days - UPPCO
Heating Degree Days - Actual		4,108			1,487			346			2,735			8,676			3,282			1,182			4,464
period-over-period change		14.4	%		34.0	%		-19.5	%		-4.7	%		8.4	%		-20.1	%		-20.5	%		-20.2	%
compared with normal		3.3	%		6.8	%		-16.6	%		-6.1	%		-0.2	%		-18.5	%		-16.4	%		-18.0	%
Heating Degree Days - Normal		3,977			1,392			415			2,913			8,697			4,029			1,414			5,443
Cooling Degree Days - Actual		-			31			270			4			305			-			99			99
period-over-period change		N/M	(1)		-45.6	%		10.7	%		N/M	(1)		1.3	%		N/M	(1)		219.4	%		219.4	%
compared with normal		N/M	(1)		-40.4	%		66.7	%		300.0	%		41.9	%		N/M	(1)		94.1	%		94.1	%
Cooling Degree Days - Normal		-			52			162			1			215			-			51			51
Heating Degree Days - MGU
Heating Degree Days - Actual		3,316			791			161			1,916			6,184			2,472			659			3,131
period-over-period change		9.1	%		54.2	%		34.2	%		-14.4	%		4.6	%		-25.5	%		-16.7	%		-23.8	%
compared with normal		5.2	%		0.0	%		12.6	%		-14.4	%		-2.2	%		-20.8	%		-16.1	%		-19.9	%
Heating Degree Days - Normal		3,151			791			143			2,238			6,323			3,122			785			3,907
Heating Degree Days - MERC
Heating Degree Days - Actual (northern service territory)		4,660			1,308			394			2,948			9,310			3,608			1,086			4,694
period-over-period change		11.4	%		24.9	%		-13.4	%		-10.7	%		3.6	%		-22.6	%		-17.0	%		-21.3	%
compared with normal		5.1	%		3.6	%		-7.7	%		-12.8	%		-2.0	%		-19.6	%		-15.4	%		-18.7	%
Heating Degree Days - Normal (northern service territory)		4,433			1,262			427			3,382			9,504			4,490			1,283			5,773
Heating Degree Days - Actual (southern service territory)		3,920			869			204			2,306			7,299			2,851			596			3,447
period-over-period change		6.5	%		48.3	%		11.5	%		-15.8	%		1.5	%		-27.3	%		-31.4	%		-28.0	%
compared with normal		6.1	%		3.5	%		-1.0	%		-16.1	%		-2.5	%		-23.8	%		-29.7	%		-24.9	%
Heating Degree Days - Normal (southern service territory)		3,694			840			206			2,747			7,487			3,742			848			4,590
Heating Degree Days - PGL and NSG
Heating Degree Days - Actual		3,340			853			153			1,838			6,184			2,379			530			2,909
period-over-period change		6.9	%		61.9	%		115.5	%		-19.7	%		2.9	%		-28.8	%		-37.9	%		-30.6	%
compared with normal		7.8	%		21.3	%		82.1	%		-16.7	%		1.5	%		-24.3	%		-26.7	%		-24.8	%
Heating Degree Days - Normal		3,099			703			84			2,207			6,093			3,144			723			3,867
Capital Expenditures
Regulated utility expenditures		47.3			58.0			80.4			97.7			283.4			109.7			111.3			221.0
Integrys Energy Services		1.2			3.3			7.0			6.5			18.0			8.2			7.5			15.7
Other		2.7			2.0			2.5			2.8			10.0			5.1			7.4			12.5
Total Capital Expenditures	$	51.2		$	63.3		$	89.9		$	107.0		$	311.4		$	123.0		$	126.2		$	249.2

Nonregulated Segment - Integrys Energy Services	Forward Contracted Volumes at 06/30/11						Forward Contracted Volumes at 06/30/12
	07/01/11 - 06/30/12		07/01/12 - 06/30/13		Post 06/30/13		07/01/12 - 06/30/13		07/01/13 - 06/30/14		Post 06/30/14
Retail natural gas sales volumes - billion cubic feet		63.3		17.6		5.2		68.3		19.5		6.5
Retail electric sales volumes - million kilowatt-hours		9,049		4,289		2,177		11,578		5,577		2,649
	07/01/11 - 12/31/11		1/01/12 - 12/31/12		Post 01/01/13		07/01/12 - 12/31/12		1/01/13 - 12/31/13		Post 01/01/14
Retail natural gas sales volumes - billion cubic feet		36.4		37.4		12.3		39.4		39.6		15.3
Retail electric sales volumes - million kilowatt-hours		5,653		6,082		3,780		6,565		8,731		4,508

Nonregulated Segment - Integrys Energy Services	Wholesale Counterparty Credit Exposure at 06/30/11						Wholesale Counterparty Credit Exposure at 06/30/12
	Exposure						Exposure
Counterparty Rating	Total		< 1 Year		1 - 3 Years		Total		< 1 Year		1 - 3 Years		> 3 Years
Investment grade - regulated utilities	$	9.6	$	6.1	$	3.5	$	6.7	$	6.7	$	-	$	-
Investment grade - other		8.7		8.4		0.3		0.6		0.6		-		-
Non-investment grade - regulated utilities		-		-		-		-		-		-		-
Non-investment grade - other		4.2		3.6		0.6		2.0		1.5		0.1		0.4
Non-rated - regulated utilities		2.3		2.2		0.1		0.1		0.1		-		-
Non-rated - other		0.1		0.1		-		0.4		0.4		-		-
Total Exposure	$	24.9	$	20.4	$	4.5	$	9.8	$	9.3	$	0.1	$	0.4

	The investment and non-investment grade categories are determined by publicly available credit ratings of the counterparty or the rating of any guarantor, whichever is higher.  Investment grade counterparties are those with a senior unsecured Moody's rating of Baa3 or above or a Standard & Poor's rating of BBB- or above.  Exposure before collateral considers netting of accounts receivable and accounts payable where netting agreements are in place as well as net mark to market exposure.  Credit collateral includes cash and letters of credit from the counterparties.  Net exposure does not include those counterparties to which Integrys Energy Services Inc. has exposure.
Notes:
(1) Not meaningful

   Integrys Energy Group, Inc. Financial Supplement

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