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References in this report to "MGE" are to Madison Gas and Electric Company.&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:0pt'&gt;&amp;#160;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:0pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;MGE Power &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Elm Road &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;and MGE Power &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;West Campus&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; own electric generating assets and lease those assets to MGE. &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Both entities are variable interest entities under applicable authoritative guidance. MGE is considered the primary beneficiary of these entities as a result of contractual agreements.&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; As a result, &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;MGE has consolidated MGE Power &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Elm Road and MGE Power &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;West Campus&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;.&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; See Footnote 2 of Notes to Consolidated Financial Statements under Item 8, Financial Statements and Supplementary Data, of MGE Energy's and MGE's 2012 Annual Report on Form 10-K.&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:0pt'&gt;&amp;#160;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:0pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;The accompanying consolidated financial statements as of &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;June 30,&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;2013&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;, and for the &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;three and six months ended&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;, are unaudited, but include all adjustments that MGE&amp;#160;Energy and MGE management consider necessary for a fair statement of their respective financial statements. 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