form11k.htm

Investment Valuation and Income Recognition — The Plan’s investments are stated at fair value. Investments in Integrys common stock are stated at fair market value based on the closing price reported by the New York Stock Exchange at year end. Mutual fund investments are valued as determined by the Trustee by reference to published market data. The common collective trust funds are stated at fair value as determined by the issuer of the common collective trust based on the fair market value of the underlying investments. The underlying investments in the Wells Fargo Stable Return Fund N4 are stated at fair value and are then adjusted by the issuer to contract value. There are no reserves against contract value for credit risk of the contract issuer or otherwise.

The Wells Fargo Stable Return Fund N4 is a stable value fund that is a commingled pool within the Wells Fargo Stable Return Fund G for Employee Benefit Plans. The fund may invest in fixed interest insurance investment contracts, money market funds, corporate and government bonds, mortgage-backed securities, bond funds, and other fixed income securities. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. Contract value represents contributions made to the fund, plus earnings, less participant withdrawals.

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The Northern Trust Company common collective funds invest primarily in traded securities and have a variety of investment strategies including equity funds, fixed income funds and balanced funds.

Dividends are recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Purchases and sales of securities are recorded on a trade-date basis.

Contributions Receivable — The Plan records employer contributions receivable when earned by the participants.

Operating Expenses — All expenses of maintaining the Plan are initially paid by the Company, with reimbursement from affiliates for their share of these expenses, and thus are not reflected in the Plan’s financial statements. Such expenses paid by Integrys were $142,213 and $147,384 for the plan years ended December 31, 2009 and 2008, respectively.

Payment of Benefits — Benefit payments to participants are recorded upon distribution. There were no benefits payable as of December 31, 2009 and 2008.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Plan management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Risks and Uncertainties — The Plan utilizes various investment instruments, but primarily investments in shares of Integrys common stock. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.

3.	INVESTMENTS

The Plan is primarily invested in shares of Integrys common stock. These shares are held in a bank-administered trust fund. This is the only investment that represents 5% or more of the Plan’s net assets. The values of shares held at December 31, 2009 and 2008, are as follows:

	2009		2008

Common stock of Integrys Energy Group, Inc., 3,022,281.214
shares at $41.99 per share and 2,512,278.330 shares at
$42.98 per share, respectively*	$	126,905,588	$	107,977,723

The investment in Integrys common stock is nonparticipant directed.

*Party-in-interest

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During 2009 and 2008, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated/(depreciated) in value as follows:

	2009		2008

Common stock of Integrys Energy Group, Inc.	$	2,705,509	$	(20,935,041	)
Mutual funds		392,579		(275,198	)
Common collective trusts		41,968		9,393

Total	$	3,140,056	$	(21,200,846	)

4.	NONPARTICIPANT-DIRECTED INVESTMENTS

Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments is as follows:

	2009		2008

Net assets:
Common stock of Integrys Energy Group, Inc.	$	126,905,588	$	107,977,723
Money market fund		1,838		2,338
Employer contribution receivable		1,247,339		892,711

Total	$	128,154,765	$	108,872,772

	Year Ended
	2009			2008

Changes in net assets:
Contributions	$	14,499,043		$	13,806,791
Dividend income		7,559,488			6,428,797
Interest income		38			644
Net appreciation (depreciation)		2,705,509			(20,935,041	)
Distributions to participants		(3,287,254	)		(8,761,554	)
Dividend distributions		(373,223	)		(389,080	)
Transfers to participant-directed investments		(1,821,608	)		(2,160,676	)

Total	$	19,281,993		$	(12,010,119	)

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5.	FAIR VALUE MEASUREMENTS

The Plan classifies its investments into Level 1, which refers to securities valued using quoted prices from active markets for identical assets; Level 2, which refers to securities not traded on an active market but for which observable market inputs are readily available; and Level 3, which refers to securities valued based on significant unobservable inputs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth by level within the fair value hierarchy a summary of the Plan’s investments measured at fair value on a recurring basis at December 31, 2009 and 2008.

	Fair Value Measurements
	at December 31, 2009, Using
	Level 1		Level 2		Level 3		Total

Integrys Energy Group, Inc. common stock	$	126,905,588	$	-	$	-	$	126,905,588

Cash and cash equivalents		1,838		-		-		1,838

Mutual funds:
Equity		1,436,157		-		-		1,436,157
Balanced		538,871		-		-		538,871
Fixed Income		311,081		-		-		311,081
Total mutal funds		2,286,109		-		-		2,286,109

Common collective trusts:
Equity		-		152,240		-		152,240
Balanced		-		4,962		-		4,962
Fixed Income		-		18,774		-		18,774
Stable Return Fund		-		1,022,453		-		1,022,453
Total common collective trusts		-		1,198,429		-		1,198,429

	$	129,193,535	$	1,198,429	$	-	$	130,391,964


	Fair Value Measurements
	at December 31, 2008, Using
	Level 1		Level 2		Level 3		Total

Integrys Energy Group, Inc. common stock	$	107,977,723	$	-	$	-	$	107,977,723

Cash and cash equivalents		2,338		-		-		2,338

Mutual funds:
Equity		721,420		-		-		721,420
Balanced		357,459		-		-		357,459
Fixed Income		116,558		-		-		116,558
Total mutual funds		1,195,437		-		-		1,195,437

Common collective trusts:
Stable Return Fund		-		657,243		-		657,243

	$	109,175,498	$	657,243	$	-	$	109,832,741

6.	EXEMPT PARTY-IN-INTEREST TRANSACTIONS

Certain Plan investments are shares of a money market fund and a common collective trust managed by the Trustee and, therefore, these transactions qualify as exempt party-in-interest transactions. Fees paid by the Plan for investment management services were included as a reduction of the return earned on each fund.

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At December 31, 2009 and 2008, the Plan held 3,022,281.214 and 2,512,278.330 shares, respectively, of common stock of Integrys, the sponsoring employer, with a cost basis of $112,625,518 and $96,838,149, respectively. During the years ended December 31, 2009 and 2008, the Plan recorded dividend income of $7,558,314 and $6,428,797, respectively, from investments in common stock of Integrys.

7.	FEDERAL INCOME TAX STATUS

The Internal Revenue Service has determined and informed the Sponsor by a letter dated March 5, 2003, that the Plan and related trust were designed in accordance with applicable regulations of the Code. The Plan has been amended since receiving the determination letter. However, the Sponsor and the Plan administrator believe that the Plan is currently designed and operated in compliance with applicable requirements of the Code and the Plan and related trust continue to be tax-exempt. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

8.	RECONCILIATION TO FORM 5500

As of December 31, 2009 and 2008, the Plan reported ($2,041) and $36,784, respectively, of adjustments from fair value to contract value for fully benefit-responsive investment contracts. Fully benefit-responsive investment contracts must be shown at fair value on Form 5500.

A reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31, 2009 and 2008, and for the year ended December 31, 2009 is as follows:

	2009		2008
Statements of net assets available for benefits:
Net assets available for benefits per financial statements	$	131,638,263	$	110,762,236
Adjustment from contract value to fair value for fully
benefit-responsive guaranteed investment contracts		2,041		(36,784	)

Net assets available for benefits per Form 5500 —
at fair value	$	131,640,304	$	110,725,452

Statement of changes in net assets available for benefits:
Increase in net assets per the financial statements	$	20,876,027
Adjustment from contract value to fair value for fully
benefit-responsive guaranteed investment contracts		38,825

Net income per Form 5500	$	20,914,852

* * * * * *

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SUPPLEMENTAL SCHEDULES

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FORM 5500, SCHEDULE H, PART IV, LINE 4i —
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2009


	Description of Investment,
	Including Maturity Date, Rate
Identity of Issue, Borrower,	of Interest, Collateral, Par,			Current
Lessor, or Similar Party	or Maturity Value	Cost		Value

Nonparticipant directed:
Integrys Energy Group, Inc.*	3,022,281.214 shares of
	common stock	$	112,625,518	$	126,905,588

Wells Fargo Short-Term Investment
Money Market Fund*	1,838 shares		1,838		1,838

	Total nonparticipant directed	$	112,627,356	$	126,907,426

Participant directed:
AIM International Growth Fund	Mutual fund			$	223,822
AllianceBernstein International Value Fund	Mutual fund				182,755
American Funds Growth Fund of America	Mutual fund				206,877
Dodge & Cox Stock Fund	Mutual fund				244,746
Fidelity Balanced Fund	Mutual fund				187,577
Hartford Small Company HLS IA Fund	Mutual fund				45,726
Loomis Sayles Small Cap Value Fund	Mutual fund				181,411
Neuberger Berman Partners Fund	Mutual fund				200,128
Northern Trust Company Foreign Equity Fund	Mutual fund				16,927
Vanguard Total Stock Market Index Fund	Mutual fund				133,765
Vanguard Total Bond Market Index Fund	Mutual fund				311,081
Vanguard Target Retirement Fund	Mutual fund				23,714
Vanguard Target Retirement 2005 Fund	Mutual fund				58,157
Vanguard Target Retirement 2015 Fund	Mutual fund				116,603
Vanguard Target Retirement 2025 Fund	Mutual fund				37,114
Vanguard Target Retirement 2035 Fund	Mutual fund				93,009
Vanguard Target Retirement 2045 Fund	Mutual fund				22,697

Total mutual funds					2,286,109

Northern Trust Company Balanced Fund	Common collective trust				4,962
Northern Trust Company Bond Fund	Common collective trust				18,774
Northern Trust Company Mid Cap Equity Fund	Common collective trust				59,456
Northern Trust Company S&P 500 Equity Fund	Common collective trust				15,475
Northern Trust Company S&P 500 Growth Fund	Common collective trust				48,751
Northern Trust Company S&P 500 Value Fund	Common collective trust				19,388
Northern Trust Company Small Cap Equity Fund	Common collective trust				9,170
Wells Fargo Stable Return Fund*	Common collective trust				1,022,453

Total common collective trusts					1,198,429

	Total participant directed				3,484,538

TOTAL INVESTMENTS				$	130,391,964

* Indicates a party-in-interest

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WISCONSIN PUBLIC SERVICE CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN & TRUST

FORM 5500, SCHEDULE H, PART IV, LINE 4j — SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2009


					(f) Expense		(h) Current Value
	(b) Description of Asset				Incurred		of Asset
(a) Identity of Party	(Include Interest Rate and	(c) Purchase	(d) Selling	# of	With	(g) Cost of	on Transaction	(I) Net Gain
involved	Maturity In Case of a Loan)	Price	Price	Transactions	Transaction	Asset	Date	or Loss

SERIES IN SAME SECURITY

Integrys Energy Group, Inc.	Common stock	$ 7,184,150		7			$ 7,184,150
Integrys Energy Group, Inc.	Common stock		$ 1,935,066	12	$ 1,232	$ 2,101,461	$ 1,935,066	$ (166,395)

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SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator of the Wisconsin Public Service Corporation Employee Stock Ownership Plan has duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized, in the City of Green Bay and the State of Wisconsin this 16th day of June 2010.

WISCONSIN PUBLIC SERVICE CORPORATION

EMPLOYEE STOCK OWNERSHIP PLAN

PLAN ADMINISTRATOR

/s/ Diane L. Ford

Diane L. Ford