SCHEDULE I - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2013

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

CONDENSED PARENT COMPANY FINANCIAL STATEMENTS

SCHEDULE I - CONDENSED

PARENT COMPANY FINANCIAL STATEMENTS

INTEGRYS ENERGY GROUP, INC. (PARENT COMPANY ONLY)

A. STATEMENTS OF INCOME
Year Ended December 31
(Millions, except per share data)	2013			2012			2011
Operating expense	$	8.2		$	6.0		$	5.9
Operating loss	(8.2		)	(6.0		)	(5.9		)
Equity earnings from subsidiaries	397.1			332.4			275.5
Miscellaneous income	18.5			21.2			24.2
Interest expense	52.1			50.0			52.2
Other income	363.5			303.6			247.5
Income before taxes	355.3			297.6			241.6
Provision for income taxes	8.3			6.5			14.7
Net income from continuing operations	347.0			291.1			226.9
Discontinued operations from Parent Company, net of tax	0.6			1.4			(0.2		)
Discontinued operations from subsidiaries, net of tax	4.2			(11.1		)	0.7
Net income attributed to common shareholders	$	351.8		$	281.4		$	227.4
Average shares of common stock
Basic	79.5			78.6			78.6
Diluted	80.1			79.3			79.1
Earnings (loss) per common share (basic)
Net income from continuing operations	$	4.37		$	3.70		$	2.89
Discontinued operations, net of tax	0.06			(0.12		)	—
Earnings per common share (basic)	$	4.43		$	3.58		$	2.89
Earnings (loss) per common share (diluted)
Net income from continuing operations	$	4.33		$	3.67		$	2.87
Discontinued operations, net of tax	0.06			(0.12		)	—
Earnings per common share (diluted)	$	4.39		$	3.55		$	2.87

The accompanying notes to Integrys Energy Group's parent company financial statements are an integral part of these statements.

B. STATEMENTS OF COMPREHENSIVE INCOME
Year Ended December 31
(Millions)	2013		2012		2011
Net income attributed to common shareholders	351.8		281.4		227.4
Other comprehensive income, net of tax:
Cash flow hedges
Unrealized net gains (losses) arising during period, net of tax of $ - million, $0.1 million, and	0.6		(0.1	)	0.3
$(0.3) million, respectively
Reclassification of net (gains) losses to net income, net of tax of $2.0 million, $(1.0) million, and	(0.9	)	2.1		1.1
$0.2 million, respectively
Cash flow hedges, net	(0.3	)	2.0		1.4
Defined benefit plans
Pension and other postretirement benefit adjustments arising during period, net of tax of $ - million,	1.1		0.9		—
$(0.9) million, and $(0.7) million, respectively
Amortization of pension and other postretirement benefit costs included in net periodic benefit cost,	(0.5	)	(0.1	)	0.2
net of tax of $0.9 million, $0.4 million, and $0.1 million, respectively
Defined benefit pension plans, net	0.6		0.8		0.2
Other comprehensive income (loss) from subsidiaries, net of tax	17.4		(1.2	)	0.6
Other comprehensive income, net of tax	17.7		1.6		2.2
Comprehensive income attributed to common shareholders	369.5		283.0		229.6

The accompanying notes to Integrys Energy Group's parent company financial statements are an integral part of these statements.

C. BALANCE SHEETS
At December 31
(Millions)	2013		2012
Assets
Cash and cash equivalents	$	0.3	$	2.6
Accounts receivable from related parties	32.2		32.2
Interest receivable from related parties	4.1		4.7
Deferred income taxes	0.6		1.0
Notes receivable from related parties	84.9		34.5
Current portion of long-term notes receivable from related parties	10.0		72.0
Other current assets	47.8		39.4
Current assets	179.9		186.4
Total investments in subsidiaries, at equity	4,268.5		3,839.3
Notes receivable from related parties	224.3		171.2
Property and equipment, net of accumulated depreciation of $1.4 and $1.2, respectively	4.5		4.7
Receivables from related parties	18.3		17.3
Deferred income taxes	22.3		28.1
Other long-term assets	43.9		31.7
Total assets	$	4,761.7	$	4,278.7
Liabilities and Equity
Short-term notes payable to related parties	$	165.7	$	258.0
Short-term debt	123.2		208.4
Current portion of long-term debt	100.0		—
Accounts payable to related parties	0.9		1.0
Interest payable to related parties	—		0.1
Accounts payable	1.2		0.6
Deferred income taxes	6.4		6.0
Other current liabilities	2.8		6.8
Current liabilities	400.2		480.9
Long-term debt	974.7		674.7
Deferred income taxes	110.1		81.3
Other long-term liabilities	15.4		16.0
Long-term liabilities	1,100.2		772.0
Total common shareholders' equity	3,261.3		3,025.8
Total liabilities and equity	$	4,761.7	$	4,278.7

The accompanying notes to Integrys Energy Group's parent company financial statements are an integral part of these statements.

D. STATEMENTS OF CASH FLOWS
Year Ended December 31
(Millions)	2013			2012			2011
Operating Activities
Net income attributed to common shareholders	$	351.8		$	281.4		$	227.4
Adjustments to reconcile net income to net cash provided by operating activities
Discontinued operations, net of tax	(4.8		)	9.7			(0.5		)
Equity earnings from subsidiaries	(397.1		)	(332.4		)	(275.5		)
Dividends from subsidiaries	169.6			163.9			461.3
Deferred income taxes	26.2			8.6			29.2
Other	4.0			4.2			3.5
Changes in working capital
Accounts receivable	(0.7		)	0.4			(0.6		)
Accounts receivable from related parties	0.6			1.0			0.9
Receivable from related parties	—			—			13.8
Other current assets	(7.9		)	29.0			12.8
Accounts payable	0.6			(0.5		)	—
Accounts payable to related parties	(0.2		)	(0.4		)	(5.0		)
Other current liabilities	(2.9		)	(3.2		)	15.9
Net cash provided by operating activities	139.2			161.7			483.2
Investing Activities
Short-term notes receivable from related parties	(50.4		)	(12.1		)	33.3
Issuance of long-term notes receivable from related parties	(35.0		)	—			(10.0		)
Repayment of long-term notes receivables from related parties	44.5			1.3			1.3
Equity contributions to subsidiaries	(234.6		)	(89.9		)	(63.2		)
Return of capital from subsidiaries	75.0			110.5			229.8
Net cash provided by (used for) investing activities	(200.5		)	9.8			191.2
Financing Activities
Commercial paper, net	(85.2		)	115.8			92.6
Short-term notes payable to related parties	(92.3		)	76.2			(305.2		)
Repayment of long-term notes payable to related parties	—			(21.0		)	(325.0		)
Issuance of long-term debt	400.0			—			—
Repayment of long-term debt	—			(100.0		)	(30.2		)
Proceeds from stock option exercises	38.7			55.8			10.3
Shares purchased for stock-based compensation	—			(75.3		)	(9.1		)
Issuance of common stock	19.2			—			7.3
Dividends paid on common stock	(202.6		)	(211.9		)	(206.4		)
Other	(18.8		)	(10.4		)	(7.4		)
Net cash provided by (used for) financing activities	59.0			(170.8		)	(773.1		)
Change in cash and cash equivalents	(2.3		)	0.7			(98.7		)
Cash and cash equivalents at beginning of year	2.6			1.9			100.6
Cash and cash equivalents at end of year	$	0.3		$	2.6		$	1.9
Cash paid for interest	$	44.4		$	44.4		$	44.6
Cash paid for interest - related parties	0.7			1.4			6.8
Cash received for income taxes	(3.0		)	(24.1		)	(46.3		)

The accompanying notes to Integrys Energy Group's parent company financial statements are an integral part of these statements.

SCHEDULE I - CONDENSED

PARENT COMPANY FINANCIAL STATEMENTS

INTEGRYS ENERGY GROUP, INC. (PARENT COMPANY ONLY)

E. NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

SUPPLEMENTAL NOTES

Note 1—Summary of Significant Accounting Policies

(a) Basis of Presentation—For Parent Company only presentation, investments in subsidiaries are accounted for using the equity method. The condensed Parent Company financial statements and notes should be read in conjunction with the consolidated financial statements and notes of Integrys Energy Group appearing in this Form 10-K. The consolidated financial statements of Integrys Energy Group reflect certain businesses as discontinued operations. The condensed Parent Company statements of income and statements of cash flows report the earnings and cash flows of these businesses as discontinued operations.

(b) Cash and Cash Equivalents—Short-term investments with an original maturity of three months or less are reported as cash equivalents.

Significant noncash transactions were:

(Millions)	2013		2012		2011
Equity issued for reinvested dividends	$	12.0	$	—	$	5.4
Equity issued for stock-based compensation plans	16.3		—		10.6

The issuance of common stock line item on the Parent Company Statements of Cash Flows does not equal the issuance of common stock line item on the Integrys Energy Group Consolidated Statements of Cash Flows. The Parent Company received cash from its subsidiaries and issued common stock to its subsidiaries' employees to facilitate the employee stock ownership plan. These intercompany amounts were eliminated on the Integrys Energy Group Consolidated Statements of Cash Flows.

Note 2—Fair Value of Financial Instruments – Related Parties

The following table shows the financial instruments included on the Balance Sheets of Integrys Energy Group Parent Company that are not recorded at fair value.

	2013				2012
(Millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term notes receivable from related parties	$	224.3	$	238.5	$	171.2	$	202.1
Current portion of long-term notes receivable from related parties	10.0		10.2		72.0		73.4

Note 3—Short-term Notes Receivable – Related Parties

(Millions)	2013		2012
TEGE	23.5		—
MGU	21.8		—
MERC	20.5		15.2
IBS	10.2		—
UPPCO	8.9		11.9
ITF	—		7.4
Total	$	84.9	$	34.5

Note 4—Long-term Notes Receivable – Related Parties

(Millions)	Series	Year Due	2013		2012
WPS Leasing	8.76%	2015	$	2.4	$	2.8
	7.35%	2016	3.9		4.4
UPPCO	5.25%	2013	—		15.0
	6.059%	2017	15.0		15.0
	3.35%	2018	10.0		10.0
	5.041%	2020	15.0		15.0
	3.99%	2023	20.0		—
MERC	6.03%	2013	—		29.0
	6.16%	2016	29.0		29.0
	6.40%	2021	29.0		29.0
	3.99%	2023	29.0		—
MGU	5.72%	2013	—		28.0
	5.76%	2016	28.0		28.0
	5.98%	2021	28.0		28.0
	3.00%	2023	15.0		—
IBS	6.865%	2014	10.0		10.0
Total notes receivable - related parties			$	234.3	$	243.2
Less current portion			$	10.0	$	72.0
Total long-term notes receivable - related parties			$	224.3	$	171.2

Note 5—Short-term Notes Payable – Related Parties

(Millions)	2013		2012
PELLC	165.7		201.6
TEGE	—		49.4
IBS	—		7.0
Total	$	165.7	$	258.0