Integrys Energy Group

Background, Philosophy, and First Impression of WPSR - August 20, 2001

by Joseph P. O'Leary - Senior Vice President and Chief Financial Officer

Good afternoon. As Larry indicated, I'm Joe O'Leary-the new face in our management team. As such I wanted to share with you a little of my background, philosophy, and first impressions of WPS Resources.

Starting with background-I was born and raised in Chicago. I have 5 older sisters and 2 younger brothers. My father was a policeman and my mother, raising 8 of us, was a saint. My wife, Peggy, and I have three boys who range in age from 15 to 20.

My father was a Chicago police officer, and he was my hero. While growing up, he convinced me that life as a police officer was not for me, so I worked hard to earn a Bachelor's degree in Business Administration from the University of Notre Dame.

After graduation, I became a certified public accountant. I later went on to obtain an MBA in Finance and Marketing from the University of Chicago Graduate School of Business. I also earned a certificate in E-business strategy from the University of Chicago Graham School of General Studies last year.

My professional affiliations include the American Institute of Certified Public Accountants, the Institute of Management Accountants, and the Financial Executives Institute.

My work experience covers a broad range of industries and includes 5 years in public accounting, 5 years in transportation, a year in manufacturing, a year in distribution, and 13 years in telecommunications. My career moves have allowed me to experience both the regulated and nonregulated business environments.

I've been through deregulation in 2 industries-transportation and telecommunications. I know what this can do to a company and its employees and I know what it takes to be successful in a deregulated environment.

I've held auditor, analyst, and managerial positions, in addition to filling the roles of Assistant Vice President - Business Development, Vice President - Controller, Vice President - Tower Leasing, and Vice President - Finance.

I've been a consultant to management on finance, accounting, internal controls, activity-based costing, credit, cash management, investor relations, and preparation of SEC reports. I've created and analyzed business plans, budgets, and forecasts. I've created and implemented marketing, sales, operating, and financial strategies and processes. I have expertise in business mergers, acquisitions, divestitures, due diligence, master leasing agreements, and starting up new businesses.

I am proud of my record of improving profitability and business operations in each of my career moves.

I believe in and employ a team-oriented management style that empowers employees to solve problems, improve performance, and enhance professional development.

I had always enjoyed the time I spent on family vacations in northeastern Wisconsin and Upper Michigan. Not only is it a great place to play, but it's also a great place to work. The culture and work ethic of the area are unique. The business climate is favorable, and northeastern Wisconsin keeps churning profits at paper mills that often operate 24 hours, 7 days a week. My mother and a younger brother moved to Lake Geneva in southern Wisconsin about 10 years ago, so when I decided that the timing was right for a job change, looking to Wisconsin for a move was a natural.

I took on the role of CFO at WPS Resources on June 4 and moved my family into our new home in Green Bay on August 4. The only family member having difficulty with our move is our 8-month old puppy who has never experienced life with the wild animals in our backyard.

I chose to make a career move to WPS Resources because I believe in what this company stands for. Quality is reflected throughout-operationally as well as financially. I believe that satisfying customers is what gives a company business, but also allows a company to stay in business. I also believe that you need to balance the needs and wants of customers and employees with those of shareholders who provide the capital for us to expand our business.

What I've discovered at WPS Resources is a team of friendly, helpful, cooperative people who are truly interested in doing the best they can for both customers and shareholders. I've discovered a very low employee turnover rate because employees are dedicated to the company, they enjoy being here, and they are happy to be focusing on customer service and shareholder value.

The company is well managed. Employees are knowledgeable about their own and other parts of the business as a result of low turnover rates. Their years of service have afforded them time to work in numerous positions if desired or to become experts in particular areas.

WPS Resources generates strong internal cash flow. It has a superior credit rating that gives it the ability to access capital when needed and at reasonable rates when debt is involved.

WPS Resources' strategy has poised it to take advantage of opportunities that arise in both the regulated and nonregulated business units as it maneuvers through deregulation in the next decade. The markets the company has chosen to operate in are good for its business. Wisconsin is a pro-business state with low unemployment. Its legislative and regulatory bodies are willing to work with its businesses to ensure a fair environment for doing business. The markets of its nonregulated companies are already deregulated and should generate a larger share of our future earnings-in the range of 10 to 15 percent per year.

I expect the company to earn between $2.55 and $2.65 this year, yet I know achieving this will bring both opportunities and challenges. The weather, control of our expenses, business growth at all of our subsidiaries, and finalizing the partnership for our synthetic fuel operations all can impact the earnings per share result. Regulatory activity in Wisconsin should also help our bottom line this year and next year. We're expecting our nonregulated companies to contribute more than 15 percent to our earnings in 2001.

I believe the company can achieve average annual growth in earnings in the range of 8 to 10 percent going forward with admitted uneven spots in that growth.

In regard to our financing plans, Wisconsin Public Service, our utility, will issue 150 million dollars of senior notes with a pledge of first mortgage bonds in this quarter and plans to call its 53 million dollar issue of 8.8 percent first mortgage bonds on September 1.

In the fourth quarter, we anticipate issuing between 50 million and 100 million dollars of common stock of WPS Resources to provide the equity commitment for the capital expenditure projects at all of our subsidiaries.

We are considering a debt offering during 2002 at WPS Resources in order to provide funding for our subsidiaries' other capital projects.

I hope this gives you a picture of what to expect from me in my role of CFO and my interactions with the financial community. You can expect to see a dedicated leader who believes in teamwork and who has a firm belief in conservative accounting and the importance of maintaining high quality credit ratings. I'm here to supply new perspectives to the business while ensuring the continued quality of the company and its strong financial health remain.

In Green Bay and at WPS Resources, I expect to experience and be a part of the dedication, drive, and loyal support that brought success to a company, the region, and a championship team-both on and off the field.