Integrys Energy Group

Earnings Conference Call - Third Quarter 2003

Larry L. Weyers
Chairman, President, and Chief Executive Officer

and

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

Good afternoon. Welcome to the quarterly earnings conference call for WPS Resources Corporation. I'm Larry Weyers, Chairman, President, and Chief Executive Officer for WPS Resources Corporation. With me today is Joe O'Leary, our Senior Vice President and Chief Financial Officer, and Phil Mikulsky, our Senior Vice President - Development.

We are here today to discuss our earnings for the third quarter and first nine months of 2003 and what you can expect to see from us in the future.

WPS Resources' common stock is traded on the New York Stock Exchange under the ticker symbol WPS. Earlier today we issued a press release containing our earnings information. If you haven't seen the release, you might want to get it. It is available on our Internet site. Once you are at the site, select Investor Information, select Financial News, select Earnings, and finally select the release from today, October 24.

Before we begin, I need to point out that this presentation contains forward-looking statements within the definition of the Securities and Exchange Commission's safe harbor rules including the realization of projected results for 2003 for WPS Resources and its subsidiaries. Forward-looking statements are beyond the ability of WPS Resources to control and, in many cases, WPS Resources cannot predict what factors would cause actual results to differ materially from those indicated by forward-looking statements. I refer you to the forward-looking statement section of today's press release and to our filed Securities and Exchange Commission disclosure documents for further information.

Now, back to the business at hand. Let me begin with a few highlights and we will provide details later.

WPS Resources' consolidated net income increased by about 12 percent during the third quarter of 2003 when compared with 2002. This resulted in basic earnings per share of $1.05 for the quarter compared with 96 cents during the same period in 2002. In the third quarter of 2003 we recognized a four-cent gain related to a sale of a partial interest in our synthetic fuel operation in 2002. During the same quarter in 2002, we recognized a 19-cent gain relating to a sale of a partial interest in our synthetic fuel operation in 2001.

WPS Energy Services continues to perform well and increased its net income by 4.3 million dollars during the third quarter compared with the same period in 2002. Our electric utility segment increased its net income by 4.3 million dollars in the third quarter, but our gas utility segment experienced a 3.1 million dollar reduction in net income. As a result, utility net income increased 1.2 million dollars during the third quarter when compared with the same period in 2002.

Yesterday the Public Service Commission of Wisconsin approved our application for a declaratory ruling on recovery of pre-certification costs for the proposed new coal unit at Weston. Today we announced the sale of our Sunbury generating assets and a refocus of our activities in the merchant power markets.

These are the highlights and now Joe O'Leary will describe the details behind our financial results.

The Senior Vice President and Chief Financial Officer speaks.

Thanks, Larry.

WPS Energy Services reported a 617 million dollar increase in revenues this quarter when compared with the same period in 2002. A major factor in the increase is that WPS Energy Services, as required by new accounting standards, adopted Emerging Issues Task Force Issue No. 02-03 on January 1, 2003. More detailed information about the adoption of EITF 02-03 can be found in our news release, which is available on our web site.

Also contributing to WPS Energy Services' increased revenues in the third quarter of 2003 were higher natural gas prices and sales volume growth. The growth in sales volume resulted from our participation in the New Jersey Basic Generation Service program, expansion of retail electric business in Michigan, and the November 2002 acquisition of a retail natural gas business in Canada.

Utility segment revenues increased by 22.7 million dollars, or almost 9 percent, in the third quarter when compared with the same period in 2002. Our electric utility segment's revenues increased by 13 million dollars due to retail and wholesale electric rate increases in our Michigan and Wisconsin jurisdictions. New rate orders allowed Upper Peninsula Power to increase its retail electric rates by 8.95 percent for its Michigan customers on December 20, 2002 and Wisconsin Public Service to increase its retail electric rates by 3.5 percent for its Wisconsin customers on March 21, 2003. Wisconsin Public Service also benefited from a 1.3 million dollar increase in its Michigan retail electric rates that became effective on July 23, 2003. Additionally, the Federal Energy Regulatory Commission issued an interim order on May 11, 2003 that allowed Wisconsin Public Service to increase its wholesale electric rates by 21 percent, subject to refund, when a final order is issued. We expect to receive that final order in the second quarter of 2004.

Revenues for our gas utility segment increased by 9.5 million dollars as a result of higher natural gas prices in the third quarter 2003 when compared with 2002. The increase was partially offset by lower natural gas sales volumes and a 0.3 percent decrease in retail natural gas rates that was ordered by the Public Service Commission of Wisconsin and was effective on March 21, 2003.

Our margins generally improved this quarter. Our electric utility margin increased by 10.1 million dollars largely as the result of retail and wholesale electric rate increases, while our gas utility margin decreased slightly. WPS Energy Services' electric margin increased by 9.1 million dollars due to growth in retail electric customers, enhanced operational performance, participation in a new short-term power supply contract, and better management of power supplies. WPS Energy Services' gas margin increased by 2.2 million dollars primarily as a result of improved wholesale margins and acquisition of a Canadian retail natural gas business in November 2002. WPS Power Development's margin decreased by 2.3 million dollars primarily due to the higher price of natural gas, which resulted in less generation from our New York, Combined Locks, and Stoneman assets this quarter.

Our operating expenses increased by 6.4 million dollars in the third quarter when compared with 2002. Utility operating expenses increased by 4.1 million dollars and were driven by higher medical and pension costs, additional nuclear operating expenses, and increased legal and consulting fees. WPS Energy Services' operating expenses increased by 3.1 million dollars, primarily due to business expansion in Michigan and Canada that occurred near the end of 2002. Meanwhile, WPS Power Development's operating expenses decreased by 1.8 million dollars primarily as the result of fewer acquisition activities.

Miscellaneous income decreased by 2.2 million dollars primarily as a result of recognizing smaller gains in 2003 than in 2002 from WPS Power Development's sales of portions of its interest in a synthetic fuel facility.

We also recognized about 2 million dollars of additional tax credits related to WPS Power Development's synthetic fuel project when compared to the same quarter in 2002 as a result of previously unrecorded tax credits being recognized in 2003 due to a change in projected 2003 taxable income.

Now, let's take a look at how we performed during the first nine months of 2003.

Consolidated net income was 69.8 million dollars for the nine months ended September 30, 2003 compared with 80.2 million dollars for the same period in 2002. Basic earnings per share on WPS Resources' common stock were $2.15 for the nine months compared with $2.53 for the same period in 2002. Earnings for the first nine months of 2003 included 10 cents in basic earnings per share that is attributable to the cumulative effect of a required accounting change. The gain on the 2002 sale of a portion of our ownership interest in a synthetic fuel facility increased earnings per share for the first nine months of 2003 by about ten cents. Earnings per share for the nine months ended September 30, 2002 included 53 cents for the gain on the 2001 sale of a portion of our ownership interest in the synthetic fuel facility.

Consolidated revenue rose by 2.2 billion dollars, or 196 percent, for the first nine months of 2003 when compared with 2002. Utility revenues rose by 143.3 million dollars with electric utility segment revenues increasing by 53.6 million dollars, or 9.4 percent, as a result of retail and wholesale rate increases while gas utility segment revenues increased by 89.7 million dollars, or 43.7 percent, due to higher natural gas prices and sales volume growth. WPS Energy Services' revenues increased by more than 2 billion dollars primarily as a result of the required change in accounting mentioned in our press release. Higher natural gas prices, business expansion in Canada and Michigan, sales volume growth to existing customers, and a new short-term power supply contract also contributed to the revenue increase.

Margins increased for the first nine months of 2003 when compared with the same period in 2002. Our electric utility margin increased by 23.7 million dollars primarily due to retail electric rate increases at both of our utilities. However, electric margin increases were negatively affected by increased purchased power and fuel costs. Our internal generation of energy was limited during the first nine months because of outages at three of our facilities. When we were unable to replace the reduced generation with less expensive purchased power because of regional transmission constraints, we were forced to run our more expensive peaking units resulting in increased costs for generation.

Our gas utility margin increased by 2.9 million dollars primarily as the result of higher natural gas sales volumes due to weather that was 13 percent colder in the first nine months of 2003 compared with the same period in 2002.

WPS Energy Services' electric margin increased by 23.4 million dollars largely due to expansion of its retail electric business including the addition of a Michigan retail electric business, more favorable market price conditions in several markets, participation in a new short-term power supply contract, and improved operational management of power supplies. Energy Services' natural gas margin increased by 6.2 million dollars due to improved wholesale margins, settlement of pending liabilities with several counterparties, and the acquisition of a Canadian retail natural gas business. The increased natural gas margin was partially offset by the change in accounting, which precludes mark-to-market accounting for non-derivative trading contracts.

WPS Power Development's margin decreased by 8.8 million dollars largely due to the Sunbury plant's decreased availability as a result of issues related to fuel quality and associated mechanical difficulties involving fuel delivery systems early in the year, operational issues related to newly installed environmental control equipment in various boilers, and turbine outages in the second and third quarters of 2003. These difficulties have been identified and either resolved or a plan put in place to resolve. Sunbury's decreased margin was partially offset by increased margins for our New York plants that were acquired in June 2002.

Consolidated operating expenses increased by 39.4 million dollars. Reflected in that increase was 27.9 million dollars related to our utilities for higher pension and medical costs and increased nuclear operating and maintenance costs. WPS Energy Services' operating expenses increased by 10.7 million dollars primarily due to business expansion in Michigan and Canada that occurred near the end of 2002 and higher incentive compensation costs.

Depreciation and decommissioning expense increased by 9.9 million dollars largely due to higher earnings on our nuclear decommissioning trusts and additional regulated and nonregulated plant assets.

Miscellaneous income decreased by 16.5 million dollars due to recognition of a 5.7 million dollar before tax gain in the first nine months of 2003 compared with a 28 million dollar before tax gain in 2002 associated with selldowns of WPS Power Development's ownership interest in a synthetic fuel facility during 2001 and 2002. Gains from the 2002 sale are expected to be recognized over the next several years and are dependent upon production at the synthetic fuel facility. The gain reported in 2002 resulted from a 2001 selldown of WPS Power Development's interest in its synthetic fuel operations. The lower gain was somewhat offset by increased income from our nuclear decommissioning trusts, a 2 million dollar before tax gain on land sales, and increased income from our equity in American Transmission Company and Guardian Pipeline, LLC. According to regulatory practices, an increase in earnings on decommissioning trust assets is largely offset by increased depreciation and decommissioning expense.

We also recognized fewer tax credits related to WPS Power Development's synthetic fuel project as a result of lower estimated taxable income for the period.

Finally, the weighted average number of common stock shares outstanding increased by about 800,000 shares in the first nine months of 2003 compared with the same period in 2002 primarily as a result of issuing additional shares under the Stock Investment Plan and certain stock-based compensation plans.

One more item that may be of interest is that we reclassified our trust preferred securities from the equity section to long-term debt on the balance sheet this quarter as a result of a new accounting pronouncement, Statement No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity."

Now I'll turn the conference call over to Larry Weyers.

The Chairman, President, and Chief Executive Officer speaks.

Thanks, Joe. Now I'll discuss how our operating segments fared and what you can expect in the future. I'll begin with our regulated utilities.

On March 11, 2003, Wisconsin Public Service filed with the Federal Energy Regulatory Commission to increase its wholesale electric rates by 4.2 million dollars. We received a draft order on April 30 approving a 4.1 million dollar increase in wholesale electric rates effective May 11, subject to refund. Settlement negotiations with interveners and Federal Energy Regulatory Commission staff are continuing. We hope to reach a settlement no later than the second quarter of 2004.

On April 1, Wisconsin Public Service filed in its Wisconsin jurisdiction for authorization to increase its retail electric rates by 88.9 million dollars, or 14.1 percent, and its retail natural gas rates by 15.4 million dollars, or 4.1 percent. We've filed for a 12 percent return on equity and 55 percent equity in our capital structure. Public hearings were held on October 7 and 8. We hope to receive the final order in this case during the fourth quarter, which would allow the rates to be effective January 1, 2004. The Public Service Commission staff is recommending an 11.5 percent return on equity.

For the seventh time in the past eight years, Wisconsin Public Service customers increased their electric demands, which resulted in our reaching another all-time high on August 21 at 2,185 megawatts compared to our previous record of 2,173 megawatts on July 31, 2001.

With our electric demand growing by about two to three percent per year, we are continuing to work on our plans to build a 500-megawatt coal-fired electric generator at our Weston Power Plant site near Wausau, Wisconsin. Yesterday, the Public Service Commission of Wisconsin approved our request for a declaratory ruling for our Weston 4 plant. The ruling stated that it is prudent for Wisconsin Public Service to incur up to 69.6 million dollars on Weston 4 in 2003 and 2004 prior to the approval of our application for a certificate of public convenience and necessity, which would grant approval to construct the project. The ruling and the early response bodes well for the ultimate approval of the Weston 4 project. We submitted our application for a certificate of public convenience and necessity to the Public Service Commission in September seeking project approval. Current projections indicate that the plant will cost about 750 million dollars. We expect the plant to be operational in 2008. We anticipate a requirement from the American Transmission Company that we fund approximately 100 million dollars related to transmission upgrades required to support this new plant. When the new plant becomes operational, the American Transmission Company will refund these expenditures.

You may have seen news reports in early October about Wisconsin's Attorney General filing an environmental lawsuit against Wisconsin Public Service for air pollution violations at its Weston plant in 2001 and 2002. The charges revolve around two events, the installation of eight temporary diesel generators at the Weston plant that were installed to provide summer peaking capacity with planned removal in the summer of 2003 and the installation of a furnace boiler at Weston. Neither event involves any of our coal-fired generation units at Weston. We dispute the basis for the Attorney General's filing and plan to file our response by November 15.

Our jointly-owned Kewaunee Nuclear Power Plant conducted a pathway ingestion exercise on September 23 and 24 which was graded by the Nuclear Regulatory Commission. The NRC reported "no findings" which is unusual for this type of exercise and speaks to the quality of our employees and processes. We were pleased with this outcome.

On May 14, 2003, a fuse plug at the Silver Lake reservoir owned by Upper Peninsula Power Company, our wholly owned subsidiary, was breeched resulting in flooding downstream on the Dead River. On October 9, an independent engineering study of the root causes of last spring's release of Silver Lake to the Dead River basin was submitted to the Federal Energy Regulatory Commission. The Washington Group International out of Boise, Idaho, conducted the study and concluded that a design error led to the premature activation of the fuse plug. In addition, the design did not take into account the highly erosive nature of the fuse plug's foundation materials and spillway channel, which caused the release of Silver Lake beyond what was expected upon activation of the fuse plug. The fuse plug was designed for the Silver Lake reservoir by an independent engineering firm in March 2002.

The extent of damage to Upper Peninsula Power's facilities and third-party property continues to be assessed. We are also working with state agencies in assessing environmental recovery needs associated with the Dead River Hydroelectric Project from this event.

WPS Resources maintains a comprehensive insurance program that includes Upper Peninsula Power. We believe we are insured in amounts that are sufficient to cover our responsibilities in connection with this event.

To seek recovery of costs not covered by insurance, including deductible amounts and power supply costs, Upper Peninsula Power filed deferral requests with the Michigan Public Service Commission and the Federal Energy Regulatory Commission to allow it to defer these costs and seek rate recovery in the future. We hope to receive orders on our deferral requests before year-end.

Now let me bring you up-to-date on the operations of our two nonregulated subsidiaries. I'll begin with WPS Power Development.

Our facilities in Maine and Canada continue to operate well. Generation from the hydro facilities for the year is below normal, although we are benefiting from a few weeks of good production in the third quarter. All of the generation from our facilities in Maine and Canada remains under contract to WPS Energy Services and another non-affiliated group.

Two of our three power plants in upstate New York were running on August 14 and were tripped off line as a result of the blackout in the Northeast. All three of our plants in New York came on line shortly after the blackout occurred to assist the New York System Operator in restoring power to the grid.

For the quarter, our New York assets have had mixed results. Our coal-fired Niagara Falls plant operated nearly all the time. Our natural gas-fired Syracuse and Beaver Falls plants operated more sparingly in response to the spark spreads and needs of the market. We are expecting our Niagara Falls facility to continue operating throughout the winter. We don't plan to operate our Syracuse plant until market conditions warrant. In addition, our Beaver Falls plant recently suffered a failure of the generator stator and is expected to be out of service for a few months, which will negatively impact the performance of our New York assets. The generation from our three New York plants is not under contract. It is instead sold in the open market. Energy prices in upstate New York have been near our expectations, but we have not seen significant price spikes or sustained periods of high prices.

WPS Power Development owns a 50-megawatt combustion turbine cogeneration facility in Combined Locks, Wisconsin, and has all of its capacity under contract. This facility ran well during the third quarter with about 90 percent availability, down from 95 percent in the second quarter. We are expecting good performance from the unit through the winter.

At our Sunbury plant in Pennsylvania, we are working on improvements in operation. Sunbury's performance improved during the third quarter, with good availability from five of the six steam boilers in the plant. One of the six steam boilers was down for most of the quarter. We expect to complete the repairs in November. We are staying on top of the normal maintenance expected with any power plant.

Additionally, we just signed a definitive agreement to sell Sunbury to Duquesne Power, L.P., a subsidiary of Duquesne Light Holdings. Based upon the terms of the asset sales agreement, the sale price is anticipated to be approximately $120 million for the plant, inventory, and related equipment. When we originally purchased the Sunbury Generating Station, it was financed with equity from WPS Resources and nonrecourse debt from a group of banks, which included nonrecourse debt and a related interest rate swap. Upon the closing of the sale and settlement of financing arrangements, we anticipate an estimated after tax loss of about 3.7 million dollars if there is no change from current interest rates relevant to the interest rate swap.

Duquesne intends to utilize the facility as part of Duquesne Light Company's post-2004 Provider of Last Resort (POLR) plan, which it expects to file with the Pennsylvania Public Utility Commission in November. As POLR provider, Duquesne Light supplies electricity to customers who have not selected an alternative generation source. This acquisition is expected to close in the summer of 2004, after approval by the Pennsylvania Public Utility Commission of Duquesne Light Company's POLR plan and other typical regulatory approvals.

The sale of Sunbury fits well into our balanced portfolio and asset management strategy. Included in the strategy is the desire to reduce uncontracted merchant exposure. We believe that synergies are best realized in markets where one can secure load and physical assets to reduce exposure, the situation that will exist for Sunbury when operated by Duquesne.

This transaction will enable us to redeploy capital into markets that are more in line with our strategic focus, that is to say markets in which we have a retail or wholesale presence and physical assets. The agreement with Duquesne allows us to better manage risk and will result in benefits to stakeholders of both companies.

Our investment in a synthetic fuel project has been performing well and the facility is producing synfuel in accordance with our expectations. Of course, important issues relate to the Internal Revenue Service's announcement regarding its concern over "chemical change" of synthetic fuels. The IRS's concern came about through its audits of other taxpayers, but the specific details of the IRS's concern remains unknown. We are working with the IRS on their audit of 2001. However, we cannot predict the outcome of the IRS review, when the review will be completed, or the ultimate impact, if any, on our facility. We believe that we are justified in relying on the two private letter rulings we received from the IRS relating to the facility, that the test results presented to the IRS in connection with the private letter rulings are scientifically valid, and that the facility has been operated in accordance with the private letter rulings and Section 29 of the IRS Code.

News reports this week indicated that the IRS has notified Progress Energy that they are dropping its questions about significant chemical change at Progress's synthetic fuel plant in Kentucky. We believe this IRS action has favorable implications for the synthetic fuel industry. The IRS has not yet indicated if this decision is applicable to our facility, which is also under review.

Market conditions continue to have a detrimental impact on our financial results for WPS Power Development as it operates in open markets in PJM (Pennsylvania-New Jersey, and Maryland) and NYISO (New York Independent System Operator). Market pricing for energy is near historical averages for PJM. However, large or frequent spikes in energy prices did not occur this past summer as they had in prior years. Capacity prices have remained extremely low, which negatively impacts our facilities in New York, Pennsylvania, and Maine.

As you know, the current merchant energy market environment is very difficult and has not evolved in the manner that most of us expected. We have been carefully assessing market conditions over the last few years and have adjusted WPS Power Development's growth strategy from time to time based on these conditions. We have recently made another adjustment in light of the existing market conditions.

We have refocused WPS Power Development's efforts on the operation of our existing assets to obtain the maximum value from the assets. And, we have realigned our development process by moving it to WPS Energy Services to emphasize opportunities that derive greater value from the synergies that exist between our two nonregulated subsidiaries. Given current market conditions, we don't expect to see significant growth in the form of acquired generation assets, but we are continuing to look for growth opportunities for both companies that will enhance shareholder value.

Now, let's take a closer look at WPS Energy Services' operations.

We have enjoyed significant growth and margin improvement at Energy Services over the last six years, and we expect to continue expanding in the northeast quadrant of the United States and adjacent portions of Canada. We are continuing to maintain a balance of retail and wholesale, natural gas and electric business, utilizing WPS Power Development's assets where applicable in a geographically diverse area. Our nonregulated electric and natural gas sales commitments are generally back-to-back transactions that allow us to effectively manage risk.

Our Canadian natural gas retail business operating in Ontario and Quebec has been part of Energy Services' activities for more than nine months now and has been fully integrated into our processes. As a result, we are seeing incremental growth and improvements and the business is functioning better than expected. We had not expected this operation to contribute to earnings until 2004, but with both margins and volumes exceeding projections, we foresee a small positive impact in 2003 and expect this entity will continue to perform well.

WPS Energy Services is continuing to expand its customer base in northern and southern Maine through bilateral contracts with customers. Energy Services already has a significant load in northern Maine that is not part of the standard offer. Although the standard offer contracts for 40 megawatts expire in February 2004 and we have bid to extend these contracts, our bilateral contracts for 80 megawatts have end dates from 2004 through 2008.

Energy Services has successfully extended its aggregation offering to Cleveland and Euclid, Ohio for two more years, but has decided to discontinue serving the Northeast Ohio Aggregation Coalition effective January 1, 2004. We are, however, continuing to pursue other aggregation programs in Ohio.

Energy Services has also hired personnel with experience in market management of electric generation assets in New York, New England, and PJM markets and will have its Washington D.C. area office operational in November. The primary focus of this group will be to provide similar services for our internally held assets and energy assets owned by third parties.

To date in 2003, we have seen significant sales volume growth at Energy Services, but we do not expect this to continue at the same pace into 2004. We expect to continue growing our Energy Services' business at about 15 to 25 percent a year with a balance between electric and natural gas in 2004 and beyond.

Finally, I'll turn to WPS Resources.

Our asset management strategy calls for the disposition of assets, including entire business units, which are no longer required for operations. Excess land, buildings, and other facilities are a part of this strategy. Going forward, we are expecting an average annualized impact of 15 to 25 cents per share through 2007 from our asset management strategy. We expect to be within that range for 2003.

Our financial strength and quality credit ratings are among the best in the industry. We will continue to work hard to maintain quality credit ratings.

In April 2003, Wisconsin Public Service filed with the Public Service Commission of Wisconsin seeking approval to issue up to 172 million dollars in debt. We expect to issue debt before the end of the year under Wisconsin Public Service's existing shelf registration, with the size and timing dependent upon business needs and refinancing opportunities. Wisconsin Public Service is also reviewing the potential for refinancing existing debt in 2004.

WPS Resources' shelf registration statement for 350 million dollars was declared effective by the Securities and Exchange Commission in September 2003, which will allow us to issue a combination of debt or equity. We expect to issue common stock under this shelf registration before year-end. The size of the common stock issue is contingent on business needs, but it is anticipated to be in the range of 125 million dollars to 175 million dollars.

WPS Resources Corporation also has 50 million dollars of seven percent trust preferred securities outstanding that we currently anticipate redeeming in late 2003 or early 2004.

In July, we announced a dividend increase on our common stock. We are proud to say that this is the 45th consecutive year we have increased our dividends. The 54 1/2 cent dividend was paid on September 20 to shareholders of record on August 29.

In August, we completed a credit line syndication that established 225 million dollars in revolving credit lines for WPS Resources and 115 million dollars in revolving credit lines for Wisconsin Public Service. The 364-day senior unsecured revolving credit line facilities give us greater financial flexibility as we grow our regulated utilities and nonregulated business.

In 2003, we are continuing to seek balanced utility and nonregulated growth but we are placing more emphasis on regulated growth, which reduces our exposure to the risks of nonregulated markets. Our long-term earnings per share growth rate target is 6 to 8 percent on an average annualized basis, with fluctuations in any given year that may be above or below that targeted range. We believe this strategy will reduce the overall risk to investors and, combined with our growing dividend, provide very good returns to our shareholders. Our target for 2003 earnings per share is unchanged from our first and second quarter reports of between $2.75 and $2.95, although we may be at the lower end of the range given our delayed rate case order in Wisconsin. Achieving our targeted range for 2003 earnings per share is dependent upon, among other things, weather, availability of our generating units, our hydro land sale in the fourth quarter, and successful execution of cost control initiatives.

WPS Resources' conservative nature has served it well through the years. Our core competencies are in energy and energy related businesses. We intend to stay in those businesses within the United States and Canada. We understand the energy business and have developed a business plan that capitalizes on that knowledge. Our utility base is solid and our nonregulated energy businesses are focused. We've rewarded our shareholders with increased dividends for 45 consecutive years. We effectively mitigate and minimize risk in the operation of our business. We strive to maintain quality credit ratings. Finally, we deliver value to our customers and our shareholders.

We plan to continue delivering shareholder value through our strong utility foundation, focused nonregulated energy and energy-related businesses, achieving our projected average annualized earnings per share growth of 6 to 8 percent, and maintaining our outstanding dividend record. We plan to continue delivering value to our investors for many years to come!

Now, Joe, Phil, and I would like to answer your questions about our financial picture and plans for the future.

Thank you for being a part of our third quarter earnings conference call. A replay of this conference call will be available through November 7 by dialing 800-925-1214.

The text for today's presentation is available on our Web site. Just select Investor Information and then Presentations.

If you have additional questions, you may contact Joe O'Leary at 920-433-1463 or Donna Sheedy at 920-433-1857.