0000783325
2009-04-01
2009-06-30
0000783325
2008-04-01
2008-06-30
0000783325
2008-01-01
2008-06-30
0000783325
2007-12-31
0000783325
2008-12-31
0000783325
2008-06-30
0000783325
2009-06-30
0000783325
2009-01-01
2009-06-30
iso4217:USD
xbrli:shares
xbrli:shares
iso4217:USD
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</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>1 — GENERAL INFORMATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Our accompanying unaudited consolidated condensed financial statements should be read in
conjunction with Item 8, Financial Statements and Supplementary Data, in our 2008 Annual Report on
Form 10-K. In the opinion of management, we have included all adjustments, normal and recurring in
nature, necessary to a fair presentation of the results of operations, cash flows and financial
position in the accompanying income statements, statements of cash flows and balance sheets. The
results of operations for the three and six months ended June 30, 2009 are not necessarily
indicative of the results which may be expected for the entire fiscal year 2009 because of seasonal
and other factors.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Reclassifications: </i></b>We have reclassified certain prior year financial statement amounts to conform
to their current year presentation. These reclassifications had no effect on total assets, net
income or earnings per share.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The reclassifications relate to the reporting of discontinued operations. The footnotes contained
herein reflect continuing operations for all periods presented. For further information, see Note
5.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Subsequent Events: </i></b>We have evaluated and determined that no material events took place after our
balance sheet date of June 30, 2009 through our financial statement issuance date of August 4,
2009.
</div>
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<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2 — NEW ACCOUNTING PRONOUNCEMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Fair Value Measurements: </i></b>In September 2006, the FASB issued SFAS 157. SFAS 157 defines fair
value, provides guidance for using fair value to measure assets and liabilities as well as a
framework for measuring fair value, and expands disclosures related to fair value measurements.
SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15,
2007. We partially adopted the provisions of SFAS 157 effective January 1, 2008. We adopted the
provisions of SFAS 157-2 effective January 1, 2009 and the provisions of SFAS 157-4 effective April
1, 2009. The adoption of SFAS 157 did not have a significant financial impact on our financial
condition, results of operations or cash flow. See Note 6 — Fair Value Measurements for required
disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Noncontrolling Interests in Consolidated Financial Statements: </i></b>In December 2008, the FASB issued
SFAS 160. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008. This
statement clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated financial statements. We
adopted the provisions of SFAS 160 effective January 1, 2009. The adoption of SFAS 160 did not
have a material financial impact on our financial condition, results of operations or cash flows.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Disclosures about Derivative Instruments and Hedging Activities: </i></b>In March 2008, the FASB issued
SFAS 161, which amends SFAS 133. SFAS 161 requires qualitative disclosures about objectives and
strategies for using derivatives, quantitative disclosures about fair value amounts of gains and
losses on derivative instruments, and disclosures about credit-risk-related contingent features in
derivative agreements. SFAS 161 is effective for fiscal years beginning after November 15, 2008.
We adopted the provisions of SFAS 161 effective January 1, 2009. The adoption of SFAS 161 did not
have any financial impact on our financial condition, results of operations or cash flows. See Note
7 — Derivative Instruments for required disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Subsequent Events: </i></b>In May 2009, the FASB issued SFAS 165. SFAS 165 provides guidance on
management’s assessment of subsequent events. This statement clarifies that management must
evaluate, as of each reporting period, events or transactions that occur after the balance sheet
date through the date the financial statements are issued or are available to be issued. SFAS 165
is effective for interim and annual periods ending after June 15, 2009. We adopted the provisions
of SFAS 165 effective June 30, 2009. The adoption of SFAS 165 had no material financial impact on
our financial condition, results of operations or cash flows.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Interim Disclosures about Fair Value of Financial Instruments: </i></b>In April 2009, the FASB issued FSP
SFAS 107-1, which requires disclosures about the fair value of financial instruments for interim
reporting periods of publicly traded companies as well as in financial statements. We adopted the
provisions of FSP SFAS 107-1 effective June 30, 2009. The adoption of FSP SFAS 107-1 had no
financial impact on our financial condition, results of operations or cash flows.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Recognition and Presentation of Other-Than-Temporary Impairments: </i></b>In April 2009, the FASB issued
FSP SFAS 115-2, which amends the other-than-temporary impairment guidance for debt securities to be
more operational and to improve the presentation and disclosure of the other-than-temporary
impairments on debt and equity securities in financial statements. We adopted FSP SFAS 115-2
effective June 30, 2009. The adoption of FSP SFAS 115-2 had no material financial impact on our
financial condition, results of operations or cash flows.
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<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Amendments to Variable Interest Entity Consolidation Guidance: </i></b>In June 2009, the FASB issued SFAS
167, which amends certain requirements of FIN 46(R). The purpose of this standard is to improve
financial reporting by enterprises with variable interest entities. SFAS 167 is effective for all
new and existing variable interest entities for fiscal years beginning after November 15, 2009. We
expect to adopt SFAS 167 on January 1, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Employers’ Disclosures about Post-retirement Benefit Plan Assets</i></b>: In December 2008, the FASB
issued FSP SFAS 132(R)-1, which provides guidance on an employer’s disclosures about plan assets of
a defined benefit pension or other post-retirement plan. FSP SFAS 132(R)-1 will result in expanded
disclosures related to post-retirement benefit plan assets and is effective for fiscal years ending
after December 15, 2009. We expect to adopt FSP SFAS 132(R)-1 on December 31, 2009.
</div>
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<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>3 — ACCOUNTING AND REPORTING FOR POWER THE FUTURE GENERATING UNITS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Background: </i></b>As part of our PTF strategy, our non-utility subsidiary, We Power, is building four
new generating units (PWGS 1 and 2 and OC 1 and 2) that will be leased to our utility subsidiary,
Wisconsin Electric, under long-term leases that have been approved by the PSCW, our primary
regulator. The leases are designed to recover the capital costs of the plant including a return.
PWGS 1 was placed in service in July 2005 and PWGS 2 was placed in service in May 2008. The
accompanying consolidated financial statements eliminate all intercompany transactions between We
Power and Wisconsin Electric and reflect the cash inflows from Wisconsin Electric customers and the
cash outflows to our vendors and suppliers.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Oak Creek expansion includes common projects that will benefit the existing units at this site
as well as the new units. These projects include a coal handling facility and a water intake
system. The costs associated with these projects are included in the OC 1 captions below. In
November 2007, the coal handling system for Oak Creek was placed in service, and the water intake
system was placed in service in January 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>During Construction: </i></b>Under the terms of each lease, we collect in current rates amounts
representing our pre-tax cost of capital (debt and equity) associated with capital expenditures for
our PTF units. Our pre-tax cost of capital is approximately 14%. The carrying costs that we
collect in rates are recorded as deferred revenue and will be amortized to revenue over the term of
each lease once the respective unit is placed into service. During the construction of our PTF
units, we capitalize interest costs at an overall weighted-average pre-tax cost of interest which
was approximately 5% for the six months ended June 30, 2009 and approximately 6% in 2008.
Capitalized interest is included in the total cost of the PTF units shown below.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Cash Flows: </i></b>The following table identifies key pre-tax cash outflows and inflows for the six
months ended June 30 related to the construction of our PTF units as compared to Wisconsin Energy
overall:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="23%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000">Capital Expenditures (Millions of Dollars)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Total</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PTF</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">WEC</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2009
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">45.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">35.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">80.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">365.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2008
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">42.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">157.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">141.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">340.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">642.0</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="23%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000">Capitalized Interest (Millions of Dollars)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Total</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PTF</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">WEC</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2009
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">22.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">13.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">35.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">38.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2008
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">7.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">23.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">41.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">43.3</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="23%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000">Deferred Revenue (Millions of Dollars)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Total</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PTF</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">WEC</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2009
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">60.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">37.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">97.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">97.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2008
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">16.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">57.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">27.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">102.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">102.0</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Balance Sheet: </i></b>As noted above, we collect in current rates carrying costs that are
calculated based on the cash expenditures included in CWIP multiplied by our pre-tax cost of
capital. The carrying costs are recorded as deferred revenue and included in Other long-term
liabilities. Our total CWIP balance includes cash expenditures, capitalized interest and accruals.
The following
table identifies key amounts related to our PTF units that were recorded on our balance sheet as of
June 30, 2009 and December 31, 2008:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000">CWIP - Cash Expenditures (Millions of Dollars)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Total</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PTF</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">June 30, 2009
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">892.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">554.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,446.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">December 31, 2008
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">952.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">520.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,473.7</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000">Total CWIP (Millions of Dollars)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Total</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PTF</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">WEC</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">June 30, 2009
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,009.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">618.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,627.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,920.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">December 31, 2008
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,065.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">571.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,636.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,829.9</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000">Net Plant in Service (Millions of Dollars)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Total</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PTF</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">WEC</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">June 30, 2009
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">328.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">356.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">322.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,007.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">6,758.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">December 31, 2008
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">332.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">360.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">194.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">887.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">6,596.5</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000">Deferred Revenue (Millions of Dollars)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Total</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PWGS 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 1</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">OC 2</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">PTF</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">WEC</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">June 30, 2009
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">61.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">75.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">345.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">156.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">639.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">639.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">December 31, 2008
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">62.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">77.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">285.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">119.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">545.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">545.4</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Income Statement: </i></b>Once the PTF units are placed in service, we expect to recover in rates
the lease costs which reflect the authorized cash construction costs of the units plus a return on
the investment. The authorized cash costs are established by the PSCW. The authorized cash costs
exclude capitalized interest since carrying costs are recovered during the construction of the
units. The lease payments are expected to be levelized, except that OC 1 and OC 2 will be
recovered on a levelized basis that has a one time 10.6% escalation after the first five years of
the leases. The leases established a set return on equity component of 12.7% after tax. The
interest component of the return is determined up to 180 days prior to the date that the units are
placed in service.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We recognize revenues related to the lease payments that are included in our rates. In addition,
our revenues include the amortization of the deferred revenues that reflect the carrying costs that
are collected during construction. The deferred revenue is amortized on a straight line basis over
the lease term. We depreciate the units on a straight line basis over their expected service life.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In July 2005, PWGS 1 was placed in service. This asset had a cost of approximately $364.3 million,
which included approximately $31.1 million of capitalized interest. The asset is being depreciated
over its estimated useful life of 37 years. The cost of the plant, plus a return on the
investment, is expected to be recovered through Wisconsin Electric’s rates over a 25 year period at
an annual amount of approximately $48 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In November 2007, the coal handling system for Oak Creek was placed into service. This asset had a
cost of approximately $199.1 million. This asset is being depreciated over its estimated useful
life of 40 years. The cost of the system, plus a return on the investment, is expected to be
recovered through Wisconsin Electric’s rates over a 32 year period at an annual amount of
approximately $24 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2008, PWGS 2 was placed in service. This asset had a cost of approximately $366.0 million,
which included approximately $34.0 million of capitalized interest. The asset is being
depreciated over its estimated useful life of 37 years. The cost of the plant, plus a return on
the investment, is expected to be recovered through Wisconsin Electric’s rates over a 25 year
period at an annual amount of approximately $49 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In January 2009, the new water intake system that serves both the existing units at Oak Creek and
OC 1 and OC 2 was placed in service. This asset had a cost of approximately $132.5 million. This
asset is being depreciated over its estimated useful life of 40 years. The cost of the system,
plus a return on the investment, is expected to be recovered through Wisconsin Electric’s rates
over a 31 year period at an annual amount of approximately $16 million.
</div>
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<!-- Begin Block Tagged Note 4 - us-gaap:StockholdersEquityNoteDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>4 — COMMON EQUITY</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Share-Based Compensation Expense: </i></b>For a description of share-based compensation, including stock
options, restricted stock and performance units, see Note J — Common Equity in our 2008 Annual
Report on Form 10-K. We utilize the straight-line attribution method for recognizing share-based
compensation expense. Accordingly, for employee awards, equity classified share-based compensation
cost is measured at the grant date based on the fair value of the award, and is recognized as
expense over the requisite service period. There were no modifications to outstanding stock
options during the period. Shares purchased on the open market by our independent agents are
currently used to satisfy share-based awards.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes recorded pre-tax share-based compensation expense and the related
tax benefit for share-based awards made to our employees and directors:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Millions of Dollars)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Stock options
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Performance units
</div></td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Restricted stock
</div></td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Share-based compensation expense
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Related Tax Benefit
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Stock Option Activity: </i></b>During the first six months of 2009, the Compensation Committee
granted 1,216,625 options that had an estimated fair value of $8.01 per share. During the first
six months of 2008, the Compensation Committee granted 1,362,160 options that had an estimated fair
value of $9.39 per share. The following assumptions were used to value the options using a
binomial option pricing model:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">0.3% – 2.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">2.9% – 3.9</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Dividend yield
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">3.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.1</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">25.9</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">20.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected forfeiture rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected life (years)
</div></td>
<td> </td>
<td> </td>
<td align="right">6.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.2</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The risk-free interest rate is based on the U.S. Treasury interest rate whose term is
consistent with the expected life of the stock options. Dividend yield, expected volatility,
expected forfeiture rate and expected life assumptions are based on our historical experience.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a summary of our stock option activity for the three and six months ended June 30,
2009:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Weighted-Average</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Weighted-</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Remaining</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Aggregate</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Average</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Contractual Life</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Intrinsic Value</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Stock Options </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Number of Options</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Exercise Price</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">(Years)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">(Millions)</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding as of April 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">9,633,669</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">37.81</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(119,858</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">27.27</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(7,360</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">46.09</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding as of June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">9,506,451</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">37.93</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding as of January 1,
2009
</div></td>
<td> </td>
<td> </td>
<td align="right">8,543,564</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">36.97</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">1,216,625</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">42.22</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(246,378</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">25.41</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(7,360</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">46.09</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding as of June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">9,506,451</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">37.93</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">47.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercisable as of June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">5,789,956</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">32.74</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">47.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The intrinsic value of options exercised was $1.4 million and $3.9 million for the three and
six months ended June 30, 2009, and $4.1 million and $6.2 million for the same periods in 2008,
respectively. Cash received from options exercised was $6.3 million and $7.6 million for the six
months ended June 30, 2009 and 2008, respectively. The actual tax benefit realized for the tax
deductions from option exercises for the same periods was approximately $1.6 million and $1.9
million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Stock options to purchase 3,945,255 shares of common stock, with prices ranging from $42.22 to
$48.04 per share, respectively, were outstanding during the first six months of 2009, but were not
included in the computation of diluted earnings per share because they were anti-dilutive.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes information about stock options outstanding as of June 30, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000">Options Outstanding</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000">Options Exercisable</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Weighted-Average</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Weighted-Average</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Remaining</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Remaining</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Number of</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Exercise</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Contractual</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Number of</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Exercise</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Contractual</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Range of Exercise Prices</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Options</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Price</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Life (Years)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Options</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Price</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Life (Years)</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">$19.62 to $31.07
</div></td>
<td> </td>
<td> </td>
<td align="right">1,878,911</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">25.17</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,878,911</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">25.17</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">$33.44 to $39.48
</div></td>
<td> </td>
<td> </td>
<td align="right">3,682,285</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">35.67</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,682,285</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">35.67</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">$42.22 to $48.04
</div></td>
<td> </td>
<td> </td>
<td align="right">3,945,255</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">46.13</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">228,760</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">47.79</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">9,506,451</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">37.93</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,789,956</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">32.74</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes information about our non-vested options during the three and
six months ended June 30, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Weighted-</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Number</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Average</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">of</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Fair</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Non-Vested Stock Options </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Options</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Value</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-vested as of April 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">3,723,855</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">8.72</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(7,360</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">8.73</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-vested as of June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">3,716,495</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">8.72</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-vested as of January 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">3,598,379</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">8.81</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">1,216,625</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">8.01</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1,091,149</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">7.55</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(7,360</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">8.73</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-vested as of June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">3,716,495</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">8.72</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of June 30, 2009, total compensation costs related to non-vested stock options not yet
recognized was approximately $13.0 million, which is expected to be recognized over the next 19
months on a weighted-average basis.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Restricted Shares: </i></b>The Compensation Committee has also approved restricted stock grants to
certain key employees and directors. The following restricted stock activity occurred during the
three and six months ended June 30, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Weighted-</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Number</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Average</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">of</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Grant Date</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Restricted Shares </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Shares</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Fair Value</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding as of April 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">117,510</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Released / Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(4,780</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">27.76</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding as of June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">112,730</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding as of January 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">116,373</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">14,216</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">42.11</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Released / Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(17,859</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">35.96</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding as of June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">112,730</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We record the market value of the restricted stock awards on the date of grant, and then we
charge their value to expense over the vesting period of the awards. We also adjust expense for
acceleration of vesting due to achievement of performance goals. The intrinsic value of restricted
stock vesting was $0.1 million and $0.7 million for the three and six months ended June 30, 2009,
and $0.8 million and $1.8 million for the same periods in 2008. The actual tax benefits realized
for the tax deductions from released restricted shares was $0.1 million and $0.3 million for the
three and six months ended June 30, 2009, and $0.3 million and $0.4 million for the same periods in
2008, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of June 30, 2009, total compensation cost related to restricted stock not yet recognized was
approximately $1.8 million, which is expected to be recognized over the next 32 months on a
weighted-average basis.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Performance Units: </i></b>In January 2009 and 2008, the Compensation Committee granted 333,220 and
133,855 performance units, respectively, to officers and other key employees under the Wisconsin
Energy Performance Unit Plan. Under the grants, the ultimate number of units that will be awarded
is dependent upon the achievement of certain financial performance of our stock over a three year
period. We are accruing compensation costs over the three year period based on our estimate of the
final expected value of the awards. Performance units earned as of December 31, 2008 and 2007
vested and were settled during the first quarter of 2009 and 2008, and had a total intrinsic value
of $8.4 million and $5.2 million, respectively. The actual tax benefit realized for the tax
deductions from the settlement of performance units was approximately $3.1 million and $1.8
million, respectively. As of June 30, 2009, total compensation cost related to performance units
not yet recognized was approximately $15.4 million, which is expected to be recognized over the
next 26 months on a weighted-average basis.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Restrictions: </i></b>Wisconsin Energy’s ability as a holding company to pay common dividends primarily
depends on the availability of funds received from its principal utility subsidiaries, Wisconsin
Electric and Wisconsin Gas. Various financing arrangements and regulatory requirements impose
certain restrictions on the ability of our principal utility subsidiaries to transfer funds to us
in the form of cash dividends, loans or advances. In addition, under Wisconsin law, Wisconsin
Electric and Wisconsin Gas are prohibited from loaning funds, either directly or indirectly, to
Wisconsin Energy. See Note J —Common Equity in our 2008 Annual Report on Form 10-K for additional
information on these and other restrictions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We do not believe that these restrictions will materially affect our operations or limit any
dividend payments in the foreseeable future.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Comprehensive Income: </i></b>Comprehensive income includes all changes in equity during a period except
those resulting from investments by and distributions to owners. We recorded the following total
comprehensive income, net of tax, during the six months ended June 30:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Comprehensive Income</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Millions of Dollars)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net Income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">205.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">181.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other Comprehensive Income
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Hedging
</div></td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Other Comprehensive Income
</div></td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Comprehensive Income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">205.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">181.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
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<head></head>
<body>
<!-- Begin Block Tagged Note 5 - us-gaap:DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>5 — DISCONTINUED OPERATIONS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Effective April 30, 2009, we sold our water utility to the City of Mequon, Wisconsin for
approximately $14.5 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The assets and liabilities associated with our water utility reclassified as held for sale within
other current assets and liabilities on our Consolidated Condensed Balance Sheets as of December
31, 2008 were $14.4 million and $0.3 million, respectively. We also reclassified the water utility
income as discontinued operations in the accompanying Consolidated Condensed Income Statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of the components of Income from Discontinued Operations, Net of Tax in our Consolidated
Condensed Income Statements follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Ended June 30</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Ended June 30</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009 (a)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009 (a)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Millions of Dollars)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Operating revenues
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Operating expenses
</div></td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.7</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Income before income taxes
</div></td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Income tax expense
</div></td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Income from discontinued water operations, net of tax
</div></td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Income (Loss) from discontinued other operations, net of tax
</div></td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Income (Loss) from Discontinued Operations, Net of Tax
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>As a result of its sale effective April 30, 2009, we operated the
water utility for one of the three months ended June 30, 2009 and
for four of the six months ended June 30, 2009.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Cash provided by operating activities in our Consolidated Condensed Statements of Cash Flows
reflects income from discontinued water operations, net of tax, of $0.4 million for the six months
ended June 30, 2009 and 2008. Cash used in investing activities reflects activity from
discontinued water operations of $0.1 million and $0.2 million for the six months ended June 30,
2009 and 2008, respectively. Discontinued water operations had no impact on financing activities
for the six months ended June 30, 2009 and 2008.
</div>
<!-- Folio -->
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
</div>
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<!-- Begin Block Tagged Note 6 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>6 — FAIR VALUE MEASUREMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Fair value measurements require enhanced disclosures about assets and liabilities that are measured
and reported at fair value and establish a hierarchal disclosure framework which prioritizes and
ranks the level of observable inputs used in measuring fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Fair value is the price that would be received upon the sale of an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date (exit
price). We primarily apply the market approach for recurring fair value measurements and attempt
to utilize the best available information. Accordingly, we also utilize valuation techniques that
maximize the use of observable inputs and minimize the use of unobservable inputs. We are able to
classify fair value balances based on the observability of those inputs. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Assets and liabilities measured and reported at fair value are classified and disclosed in one of
the following categories:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Level 1 — Quoted prices are available in active markets for identical assets or liabilities as
of the reporting date. Active markets are those in which transactions for the asset or
liability occur in sufficient frequency and volume to provide pricing information on an ongoing
basis. Instruments in this category consist of financial instruments such as exchange-traded
derivatives, cash equivalents and restricted cash investments.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Level 2 — Pricing inputs are other than quoted prices in active markets, which are either
directly or indirectly observable as of the reporting date, and fair value is determined
through the use of models or other valuation methodologies. Instruments in this category
include non-exchange-traded derivatives such as OTC forwards and options.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Level 3 — Pricing inputs include significant inputs that are generally less observable from
objective sources. The inputs in the determination of fair value require significant management
judgment or estimation. At each balance sheet date, we perform an analysis of all instruments
subject to fair value reporting and include in Level 3 all instruments whose fair value is
based on significant unobservable inputs.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In certain cases, the inputs used to measure fair value may fall into different levels of the fair
value hierarchy. In such cases, an instrument’s level within the fair value hierarchy is based on
the lowest level of input that is significant to the fair value measurement. Our assessment of the
significance of a particular input to the fair value measurement in its entirety requires judgment
and considers factors specific to the instrument.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following tables summarize our financial assets and liabilities by level within the fair value
hierarchy:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">As of June 30, 2009</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Recurring Fair Value Measures</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">(Millions of Dollars)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Restricted Cash
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">283.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">283.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivatives
</div></td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:60px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">283.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">15.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">301.4</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Liabilities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivatives
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">26.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">26.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32.5</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">As of December 31, 2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Recurring Fair Value Measures</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">(Millions of Dollars)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Cash Equivalents
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">9.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Restricted Cash
</div></td>
<td> </td>
<td> </td>
<td align="right">386.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">386.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivatives
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:60px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">395.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">408.6</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Liabilities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivatives
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">38.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">71.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">38.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">71.0</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Cash Equivalents consist of certificates of deposit and money market funds. Restricted cash
consists of certificates of deposit and government backed interest bearing securities and
represents the remaining funds to be distributed to customers resulting from the net proceeds
received from the sale of Point Beach. Derivatives reflect positions we hold in exchange-traded
derivative contracts and OTC derivative contracts. Exchange-traded derivative contracts, which
include futures and exchange-traded options, are generally based on unadjusted quoted prices in
active markets and are classified within Level 1. Some OTC derivative contracts are valued using
broker or dealer quotations, or market transactions in either the listed or OTC markets utilizing a
mid-market pricing convention (the mid-point between bid and ask prices), as appropriate. In such
cases, these derivatives are classified within Level 2. Certain OTC derivatives may utilize models
to measure fair value. Generally, we use a similar model to value similar instruments. Valuation
models utilize various inputs which include quoted prices for similar assets or liabilities in
active markets, quoted prices for identical or similar assets or liabilities in markets that are
not active, other observable inputs for the asset or liability, and market-corroborated inputs
(i.e., inputs derived principally from or corroborated by observable market data by correlation or
other means). Where observable inputs are available for substantially the full term of the asset
or liability, the instrument is categorized in Level 2. Certain OTC derivatives are in less active
markets with a lower availability of pricing information which might not be observable in or
corroborated by the market. When such inputs have a significant impact on the measurement of fair
value, the instrument is categorized in Level 3.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following tables summarize the fair value of derivatives classified as Level 3 in the fair
value hierarchy:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Quarter to Date </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Millions of Dollars)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of April 1
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Realized and unrealized gains (losses)
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Purchases, issuances and settlements
</div></td>
<td> </td>
<td> </td>
<td align="right">12.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Transfers in and/or out of Level 3
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of June 30
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">15.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">21.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Change in unrealized gains
(losses) relating to instruments still held as of June 30
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Year to Date</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Millions of Dollars)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of January 1
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">8.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Realized and unrealized gains (losses)
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Purchases, issuances and settlements
</div></td>
<td> </td>
<td> </td>
<td align="right">6.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Transfers in and/or out of Level 3
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of June 30
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">15.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">21.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Change in unrealized
gains (losses) relating to instruments still held as of June 30
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Derivative instruments reflected in Level 3 of the hierarchy include MISO FTRs that are
measured at fair value each reporting period using monthly or annual auction shadow prices from
relevant auctions. Changes in fair value for Level 3 recurring items are recorded on our balance
sheet. See Note 7 — Derivative Instruments, for further information on the offset to regulatory
assets and liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The carrying amount and estimated fair value of certain of our recorded financial instruments are
as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">June 30, 2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">December 31, 2008</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Carrying</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Fair</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Carrying</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Fair</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Financial Instruments</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Amount</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Amount</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Value</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15">(Millions of Dollars)</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Preferred stock, no redemption required
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">30.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">19.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">30.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">19.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term debt including current portion
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">3,967.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3,889.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4,009.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3,711.9</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The carrying value of net accounts receivable, accounts payable and short-term borrowings
approximates fair value due to the short-term nature of these instruments. The fair value of our
preferred stock is estimated based upon the quoted market value for the same or similar issues.
The fair value of our long-term debt, including the current portion of long-term debt, but
excluding capitalized leases and unamortized discount on debt, is estimated based upon quoted
market value for the same or similar issues or upon the quoted market prices of U.S. Treasury
issues having a similar term to maturity, adjusted for the issuing company’s bond rating and the
present value of future cash flows.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
</div>
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<head></head>
<body>
<!-- Begin Block Tagged Note 7 - us-gaap:DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>7 — DERIVATIVE INSTRUMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We record derivative instruments on the balance sheet as an asset or liability measured at its fair
value, and changes in the derivative’s fair value are recognized currently in earnings unless
specific hedge accounting criteria are met. For most energy related physical and financial
contracts in our regulated operations that qualify as derivatives, the PSCW allows the effects of
the fair market value accounting to be offset to regulatory assets and liabilities. We do not
offset fair value amounts recognized for the right to reclaim cash collateral or the obligation to
return cash collateral against fair value amounts recognized for derivatives executed with the same
counterparty under the same master netting arrangement. As of June 30, 2009, we recognized $50.0
million in regulatory assets and $17.9 million in regulatory liabilities related to derivatives.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We utilize derivatives as part of our risk management program to manage the volatility and costs of
purchased power, generation and natural gas purchases for the benefit of our customers and
shareholders. Our approach is non-speculative and designed to mitigate risk and protect against
price volatility. Regulated hedging programs require prior approval by the PSCW.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We record our current derivative assets on the balance sheet in Other current assets and the
current portion of the liabilities in Other current liabilities. The long-term portion of our
derivative assets of $0.2 million is recorded in Other deferred charges and other assets and the
long-term portion of our derivative liabilities of $4.3 million is recorded in Other deferred
credits and other liabilities. Our Consolidated Condensed Balance Sheet as of June 30, 2009
includes:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Derivative</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Derivative</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Asset</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Liability</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Millions of Dollars)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Natural Gas
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Fuel Oil
</div></td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">FTRs
</div></td>
<td> </td>
<td> </td>
<td align="right">15.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Coal
</div></td>
<td> </td>
<td> </td>
<td align="right">2.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">18.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Our Consolidated Condensed Income Statements include gains (losses) on derivative instruments
used in our risk management strategies under Fuel and purchased power for those commodities
supporting our electric operations and under Cost of gas sold for the natural gas sold to our
customers. Our estimated notional volumes and gain (losses) for the three and six months ended
June 30, 2009 follow:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="51%"> </td>
<td width="3%"> </td>
<td width="12%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Three Months Ended June 30, 2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Six Months Ended June 30, 2009</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Volume</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gains</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Volume</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gains</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(Losses)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(Losses)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">(Millions of</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">(Millions of</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Dollars)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Dollars)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Natural Gas
</div></td>
<td> </td>
<td colspan="1" align="right">23.3 million Dth</td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(28.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td colspan="1" nowrap="nowrap" align="right">45.7 million Dth</td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(53.6</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Energy
</div></td>
<td> </td>
<td colspan="1" nowrap="nowrap" align="right">3,200 MWh purchased</td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td colspan="1" nowrap="nowrap" align="right">15,120 MWh purchased</td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.6</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Fuel Oil
</div></td>
<td> </td>
<td colspan="1" nowrap="nowrap" align="right">1.7 million gallons</td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td colspan="1" nowrap="nowrap" align="right">3.0 million gallons</td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.8</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">FTRs
</div></td>
<td> </td>
<td colspan="1" nowrap="nowrap" align="right">6,809 MW</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.1</td>
<td> </td>
<td> </td>
<td colspan="1" align="right">14,772 MW</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(25.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(50.8</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The aggregate fair value of all derivative instruments that are in a liability position as of
June 30, 2009 is $32.5 million, for which we have posted collateral of $36.5 million in the normal
course of business.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 8 - us-gaap:PensionAndOtherPostretirementBenefitsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>8 — BENEFITS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The components of our net periodic pension and OPEB costs for the three and six months ended June
30, 2009 and 2008 were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Pension Benefits</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">OPEB</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Benefit Plan Cost Components</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">(Millions of Dollars)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td align="center">
<div style="margin-left:15px; text-indent:-15px">Three Months Ended June 30
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net Periodic Benefit Cost
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right">17.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Expected return on plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(24.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4.4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Transition obligation
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Prior service cost (credit)
</div></td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.7</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.2</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Actuarial loss
</div></td>
<td> </td>
<td> </td>
<td align="right">4.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net Periodic Benefit Cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="center">
<div style="margin-left:15px; text-indent:-15px">Six Months Ended June 30
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net Periodic Benefit Cost
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">11.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right">36.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Expected return on plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(47.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(42.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6.8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8.8</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Transition obligation
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Prior service cost (credit)
</div></td>
<td> </td>
<td> </td>
<td align="right">1.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6.3</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Actuarial loss
</div></td>
<td> </td>
<td> </td>
<td align="right">9.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net Periodic Benefit Cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">10.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In January 2009, we contributed $289.3 million to our benefit plans. Future contributions to
the plans will be dependent upon many factors, including the performance of existing plan assets
and long-term discount rates. In January 2009, the committee that oversees the investment of the
pension assets authorized the Plan Trustee to invest in the commercial paper of Wisconsin Energy.
As of June 30, 2009, the Pension Trust held approximately $89 million of commercial paper issued by
Wisconsin Energy.
</div>
<!-- Folio -->
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
</div>
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<head></head>
<body>
<!-- Begin Block Tagged Note 9 - us-gaap:ScheduleOfGuaranteeObligationsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>9 — GUARANTEES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We enter into various guarantees to provide financial and performance assurance to third parties on
behalf of our affiliates. As of June 30, 2009, we had the following guarantees:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Maximum Potential</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Future Payments</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Outstanding</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Liability Recorded</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10">(Millions of Dollars)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Wisconsin Energy
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Non-Utility Energy
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Wisconsin Electric
</div></td>
<td> </td>
<td> </td>
<td align="right">2.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A non-utility energy segment guarantee in support of Wisvest-Connecticut, which we sold in
December 2002 to PSEG, provides financial assurance for potential obligations relating to
environmental remediation under the original purchase agreement for Wisvest-Connecticut with The
United Illuminating Company. The potential obligations for environmental remediation, which are
unlimited, are reimbursable by PSEG under the terms of the sale agreement in the event that we are
required to perform under the guarantee.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Other guarantees support obligations of our affiliates to third parties under loan agreements and
surety bonds. In the event our affiliates fail to perform, we would be responsible for the
obligations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Wisconsin Electric is subject to the potential retrospective premiums that could be assessed under
its insurance program.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Postemployment Benefits: </i></b>Postemployment benefits provided to former or inactive employees are
recognized when an event occurs. The estimated liability for such benefits was $17.4 million as of
June 30, 2009 and $18.6 million as of December 31, 2008.
</div>
<!-- Folio -->
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
</div>
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<html>
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<body>
<!-- Begin Block Tagged Note 10 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>10 — SEGMENT INFORMATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Summarized financial information concerning our reportable operating segments for the three and six
months ended June 30, 2009 and 2008 is shown in the following table:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Corporate &</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Reportable Operating Segments</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Other (a) &</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Energy</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Reconciling</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Total</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Wisconsin Energy Corporation</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Utility</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Non-Utility</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Items</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Consolidated</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15">(Millions of Dollars)</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td align="center">
<div style="margin-left:15px; text-indent:-15px">Three Months Ended
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating Revenues (b)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">839.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">44.1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(41.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">842.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Depreciation, Decommissioning and Amortization
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">78.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">7.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">86.3</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating Income (Loss)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">90.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">30.8</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(1.8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">119.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Equity in Earnings of Unconsolidated Affiliates
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">14.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">14.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest Expense, net
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">29.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">6.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">39.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Income Tax Expense (Benefit)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">31.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11.1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(4.8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">37.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Income from Discontinued Operations, Net of Tax
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.3</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net Income (Loss)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">50.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">16.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(3.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">63.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Capital Expenditures
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">144.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">43.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">5.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">193.7</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td align="center">
<div style="margin-left:15px; text-indent:-15px">Three Months Ended
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">June 30, 2008
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating Revenues (b)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">943.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">32.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(30.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">945.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Depreciation, Decommissioning and Amortization
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">75.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">5.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">80.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating Income (Loss)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">90.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">20.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(2.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">107.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Equity in Earnings of Unconsolidated Affiliates
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">12.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(0.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">11.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest Expense, net
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">24.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">9.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">35.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Income Tax Expense (Benefit)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">30.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">8.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(4.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">34.3</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Loss from Discontinued Operations, Net of Tax
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Net Income (Loss)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">52.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11.9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(6.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">58.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Capital Expenditures
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">126.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">166.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">293.8</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Corporate &</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7">Reportable Operating Segments</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Other (a) &</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Energy</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Reconciling</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Total</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Wisconsin Energy Corporation</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Utility</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Non-Utility</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Items</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Consolidated</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15">(Millions of Dollars)</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td align="center">
<div style="margin-left:15px; text-indent:-15px">Six Months Ended
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating Revenues (b)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">2,235.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">80.8</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(77.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">2,238.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Depreciation, Decommissioning and Amortization
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">157.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">14.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">172.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating Income (Loss)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">306.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">58.7</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(3.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">362.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Equity in Earnings of Unconsolidated Affiliates
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">28.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">28.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest Expense, net
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">59.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">8.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">12.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">80.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Income Tax Expense (Benefit)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">104.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21.9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(7.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">119.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Income (Loss) from Discontinued Operations,
Net of Tax
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">0.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(0.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">0.3</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net Income (Loss)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">183.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">30.5</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(9.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">205.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Capital Expenditures
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">274.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">84.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">5.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">365.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total Assets (c)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">10,572.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2,613.8</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(888.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">12,298.3</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="center">
<div style="margin-left:15px; text-indent:-15px">Six Months Ended
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">June 30, 2008
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating Revenues (b)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">2,376.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">51.7</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(51.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">2,376.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Depreciation, Decommissioning and Amortization
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">148.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">9.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">158.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating Income (Loss)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">296.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">34.2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(5.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">325.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Equity in Earnings of Unconsolidated Affiliates
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">23.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(0.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">22.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest Expense, net
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">52.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">18.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">74.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Income Tax Expense (Benefit)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">108.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">13.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(9.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">111.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Income (Loss) from Discontinued Operations,
Net of Tax
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">0.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(0.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net Income (Loss)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">173.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">19.3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(11.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">181.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Capital Expenditures
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">299.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">342.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">642.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total Assets (c)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">10,201.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2,345.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(821.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">11,725.0</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>Other includes all other non-utility activities, primarily
non-utility real estate investment and development by Wispark, as
well as interest on corporate debt.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>An elimination for intersegment revenues of $41.6 million and
$30.5 million for the three months ended June 30, 2009 and 2008,
respectively, and $77.8 million and $50.4 million for the six
months ended June 30, 2009 and 2008, respectively, is included in
Operating Revenues.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(c)</td>
<td> </td>
<td>An elimination of $892.4 million and $786.3 million is included in
Total Assets at June 30, 2009 and 2008, respectively, for all
PTF-related activity between We Power and Wisconsin Electric.</td>
</tr>
</table>
<!-- Folio -->
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</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 11 - us-gaap:ScheduleOfVariableInterestEntitiesTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>11 — VARIABLE INTEREST ENTITIES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The primary beneficiary of a variable interest entity must consolidate the related assets and
liabilities. Certain disclosures are required by sponsors, significant interest holders in
variable interest entities and potential variable interest entities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We assess our relationships with potential variable interest entities such as our coal suppliers,
natural gas suppliers, coal and gas transporters, and other counterparties in power purchase
agreements and joint ventures. In making this assessment, we consider the potential that our
contracts or other arrangements provide subordinated financial support, the potential for us to
absorb losses or rights to residual returns of the entity, the ability to directly or indirectly
make decisions about the entities’ activities and other factors.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We have identified two tolling and purchased power agreements with third parties but have been
unable to determine if we are the primary beneficiary of these two variable interest entities. The
requested information required to make this determination has not been supplied. As a result, we
do not consolidate these entities. Instead, we account for one of these contracts as a capital
lease and the other contract as an operating lease. We have approximately $446.2 million of
required payments over the remaining terms of these two agreements, which expire over the next 14
years. We believe the required payments or any replacement power purchased will continue to be
recoverable in rates. Total capacity and minimum lease payments under these contracts for the
periods ended June 30, 2009 and December 31, 2008, were $30.1 million and $66.4 million,
respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 12 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>12 — COMMITMENTS AND CONTINGENCIES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Environmental Matters: </i></b>We periodically review our exposure for remediation costs as evidence
becomes available indicating that our liability has changed. Given current information, we believe
that future costs in excess of the amounts accrued and/or disclosed on all presently known and
quantifiable environmental contingencies will not be material to our financial position or results
of operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Divestitures: </i></b>Over the past several years, we have sold various businesses and assets. In
connection with these sales, we have agreed to provide the respective buyers with customary
indemnification provisions including, but not limited to, certain environmental, asbestos and
product liability matters. In addition, pursuant to the sale of Point Beach, we have agreed to
indemnification provisions customary to transactions involving the sale of nuclear assets. We have
established reserves as deemed appropriate for these indemnification provisions.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 13 - us-gaap:CashFlowSupplementalDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>13 — SUPPLEMENTAL CASH FLOW INFORMATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the six months ended June 30, 2009, we paid $79.8 million in interest, net of amounts
capitalized, and $1.3 million in income taxes, net of refunds. During the six months ended June
30, 2008, we paid $90.7 million in interest, net of amounts capitalized, and $0.9 million in income
taxes, net of refunds.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of June 30, 2009 and 2008, the amount of accounts payable related to capital expenditures was
$40.2 million and $45.0 million, respectively.
</div>
</div>
</body>
</html>
N/A
false
--12-31
2009-06-30
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